) fourth-quarter fiscal 2014 earnings of 83 cents exceeded the
Zacks Consensus Estimate of 80 cents by 3.8% and were on the
higher end of management's expected range of 74 cents to 84 cents
per share. Earnings, however, declined 12.6% year over year due
to a weak top line during the quarter.
Lower taxes and advertising expenses made up for weaker
revenues and margins to result in better than expected earnings
performance in the quarter.
Revenues and Margins
Revenues slipped 6.0% to $768.4 million due to lower traffic
in most of the stores of the company. Bad weather conditions and
cold waves also resulted in shutdowns of shops in the last two
months of the quarter. Revenues also missed the Zacks Consensus
Estimate of $773 million and were near the lower end of
management's expectation of $750 million to $777 million. On a
constant currency basis, revenues fell 6.5%.
Operating earnings fell 12.8% to $104.6 million from $120.0
million in the year-ago quarter. The operating margin shrank 110
basis points (bps) year over year to 13.6%. The contraction in
margin was the result of markdowns and lower comps in North
American retail and European wholesale business.
stores generated revenues of $329.0 million in the fourth
quarter, down 6.0% from the prior-year quarter. Comparable store
sales fell 4.4% due to lower mall traffic in the U.S. and Canada.
Excluding the currency impact, segment revenues slipped 3.0%.
segment's revenues slipped 4.4% to $287.1 million, due to lower
wholesale business of Spring/Summer'14 order.
segment's revenues fell 1.4% to $83.0 million, due to weak
results in Greater China following lower consumer spending. In
constant currency, the segment's revenues slipped 2.7%.
Net revenue in the
North American Wholesale
segment fell 20.0% to $41.0 million. In constant currency, the
segment's revenues slipped 18.5%.
Net revenue in the
segment slipped 4.6% to $28.4 million from the prior-year
For fiscal 2014, Guess?'s earnings of $1.91 exceeded the Zacks
Consensus Estimate of $1.89 by 1.05% and management's expected
range of $1.73 to $1.83 per share. Earnings, however, declined
1.0% year over year.
Revenues slipped 3.0% to $2.6 million due to lower traffic in
most of the stores of the company. Revenues also missed the Zacks
Consensus Estimate of $2.6 billion and were near the lower end of
management's expectation of of $2.55 billion to $2.57 billion. In
constant currency, revenues fell 4.0%.
Balance Sheet and Cash Flow
Guess? ended the fourth quarter with cash and cash equivalents
of $502.9 million compared with $350.1 million at the end of the
previous quarter. Long-term liabilities were $211.0 million
compared with $200.8 million in the prior quarter.
Guidance for First-Quarter Fiscal 2015
For the first quarter of fiscal 2015, the company expects
revenues in the range of $520 million to $535 million, operating
margin in the range of -1.5% to -0.5% and adjusted loss in the
range of 9 cents to 5 cents per share. The company's expectations
fall short of the Zacks Consensus Estimate of 15 cents.
Guidance for Fiscal 2015
For fiscal 2015, net revenue is now expected in the range of
$2.53 billion to $2.58 billion. Operating margin is expected at
7.0% to 8.0%. Adjusted earnings are expected in the range of
$1.40 to $1.60.
The guided earnings fell short of the Zacks Consensus Estimate
Guess? Inc. currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks to consider in the retail sector include
Columbia Sports Inc.
Micheal Kors Inc.
). While Hanesbrands and Micheal Kors carry a Zacks Rank #1
(Strong Buy), Columbia Sports has a Zacks Rank #2 (Buy).
COLUMBIA SPORTS (COLM): Free Stock Analysis
GUESS INC (GES): Free Stock Analysis Report
HANESBRANDS INC (HBI): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis
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