) first-quarter fiscal 2014 earnings of 14 cents per share
slumped 53.3% from the year-ago earnings of 30 cents due to lower
consumer demand and macroeconomic headwinds, especially in
Southern Europe. Earnings, however, beat the Zacks Consensus
Estimate of 8 cents by 75% and exceeded the company's own
guidance of 5 cents to 10 cents.
Revenues and Margins
Revenues in the quarter slipped 5.2% to $548.9 million due to
lower sales at North American retail and European segments.
Revenues exceeded the Zacks Consensus Estimate of $543.0 million,
but it was within the management's expectation of $545.0 million
to $560.0 million. However, excluding the currency impact,
revenues increased 5.2%.
Operating earnings declined 65.1% to $13.7 million compared to
$39.1 million in the year-ago quarter. The operating margin
shrank 430 basis points (bps) year over year to 2.5% in the first
quarter. The drop was the result of lower sales in European
wholesale business, negative same-store sales and increased
promotional expenses in the North American retail business.
stores generated revenues of $238.3 million in the first quarter,
down 5.4% from the prior-year quarter. Comparable store sales
shrank 9.8% from the year-ago quarter, due to unfavorable weather
in the initial months of the quarter. However, after March, the
weather improved and Easter boosted sales, which partially offset
the softer results in the initial months.
segment's revenues slipped 12.9% to $165.4 million in the fourth
quarter, due to macroeconomic headwinds in Southern Europe and
extremely cold weather in the region which affected the sales of
Spring. Excluding the currency impact, segment revenues slipped
segment's revenues increased 9.7% to $71.1 million, driven by a
double-digit growth in the South Korean and the Greater China
businesses. Excluding the currency impact, segment's revenues
Net revenues in the
North American Wholesale
segment were slightly down at $43.8 million versus $43.9 million
in the prior-year period.
Net revenues in the
climbed 4.7% to $30.3 million from $28.9 million in the
Balance Sheet and Cash Flow
Guess? ended the fourth quarter of 2013 with cash and cash
equivalents of $306.4 million compared with $329.0 million in the
previous quarter. Long-term liabilities stood at $212.2 million
compared with $216.2 million in the prior quarter.
On May 30, 2013 Guess? approved a quarterly cash dividend of
20 cents per share payable on Jun 28, 2013 to shareholders of
record at the close of business on Jun 12, 2013.
For the second quarter of fiscal 2014, the company expects
revenues in the range of $620 million to $635 million, operating
margin in the range of 7.0% to 8.0% and earnings in the range of
34 cents to 38 cents per share.
For 2014, the company expects earnings in the range of $1.70
to $1.90 per share, which is narrower than the band of $1.70 to
$1.94 per share as announced previously.
Net revenues are expected in the range of $2.57 billion to
$2.61 billion instead compared with the earlier range of $2.60
billion to $2.64 billion. Operating margin is now expected in the
range of 8.5% to 9.5%.
The Zacks Consensus Estimate is pegged at 37 cents and $1.96
per share for the second quarter and fiscal 2014, respectively.
Therefore, the fiscal 2014 guidance was clearly
Guess? posted a decent first quarter with the bottom line
surpassing the Zacks Consensus Estimate. However, low comparable
store sales due to macroeconomic uncertainty restricted revenue
Guess? currently carries a Zacks Rank #4 (Sell). Other stocks
in the retail and wholesale sector worth considering include
Fortune Brands Home & Security Inc.
Haverty Furniture Companies Inc.
) carrying a Zacks Rank #1 (Strong Buy) and
The Buckle Inc.
) carrying a Zacks Rank #2 (Buy).
BUCKLE INC (BKE): Free Stock Analysis Report
FORTUNE BRD H&S (FBHS): Free Stock Analysis
GUESS INC (GES): Free Stock Analysis Report
HAVERTY FURNIT (HVT): Free Stock Analysis
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