Guess reported its Q2 earnings results, with revenue climbing 10% 12 months over 12 months to $733 million, fueled by the acquisition of fashion brand Rag & Bone and powerful wholesale growth within the U.S. and Europe.
“All our segments, apart from Asia, delivered top-line growth,” CEO Carlos Alberini said in the corporate’s earnings release. “Our bottom-line results reflect our decision to significantly increase our marketing investments in comparison with last 12 months’s spend to support the international expansion of our brands, including our core Guess brand in addition to the brand new additions to our portfolio, Guess Jeans and Rag & Bone.”
Dennis Secor, the interim chief financial officer at Guess, highlighted a 5% rise in online sales over the previous quarter through the earnings call. Nevertheless, year-over-year same-store sales, including Guess ecommerce sales, declined in each the Americas and Asia, which Secor attributed to more cautious consumer spending.
Guess currently ranks No. 176 in Digital Commerce 360’s Top 1000 Database of North American retailers by online sales. Rag & Bone is No. 640. Digital Commerce 360 projects that total online sales for Guess in 2024 will reach $537.07 million.
Guess web sales by 12 months
Guess Q2 earnings show growth and net loss
For the second quarter ended Aug. 3, Guess reported a GAAP (generally accepted accounting principles) net lack of $10.6 million, having achieved net earnings of $39 million in the identical quarter last 12 months. Adjusted net earnings got here in at $23 million, down 42% from $39.7 million a 12 months ago.
Despite the setbacks, total revenue for the quarter grew 10%, reaching $732.6 million. That’s up from $664.5 million within the previous 12 months. While Guess didn’t break out specific online sales, it did report mixed regional results, including ecommerce:
- In Europe, Guess revenue rose 5%, with retail comparable sales, including ecommerce, up 1%.
- Americas retail revenue increased 8%. Nevertheless, Guess retail comparable sales, including ecommerce, dropped 10%. That was softened by a 1% boost from online sales.
- Asia revenue fell 8%, with retail comparable sales, including ecommerce, down 14%.
Wholesale surge drives growth
A brilliant spot for the quarter was the Americas wholesale segment, which saw a 93% revenue increase. Alberini credited the expansion to strong performance in each the U.S. and Mexico. He also noted regular growth in Europe’s wholesale business, which has been consistent for several years.
Rag & Bone, the Recent York-based fashion brand Guess acquired in April through a partnership with WHP Global, also posted strong wholesale results. Guess took over the brand’s operating assets and liabilities while splitting the mental property 50/50 with WHP. Alberini noted that the transition has gone easily, with Rag & Bone’s customer demand exceeding expectations, though direct-to-consumer sales were barely below projections.
Looking ahead, Guess plans to expand Rag & Bone’s presence within the U.S. and Europe, with latest stores planned, including a location in Amsterdam. The corporate can also be exploring latest markets reminiscent of Mexico, Latin America, and Australia.
Recent brand launch and marketing investments
Alberini also spotlighted the launch of Guess Jeans, a Gen Z-focused denim brand led by Nicolai Marciano, son of Guess co-founder Paul Marciano. The brand has garnered significant attention, including a successful event at Coachella that brought in billions of impressions, he said. The primary sales campaign exceeded expectations, and Guess Jeans has already opened stores in Amsterdam and Berlin.
On the marketing front, Alberini said Guess doubled its investments within the second quarter and plans to proceed at higher spending levels for the remaining of the 12 months. The corporate partnered with an external firm to benchmark its marketing efforts, with plans to speculate more in social media and customer engagement to drive each in-store and online traffic.
Future outlook
Looking ahead, Guess now expects full-year revenue growth between 9.5% and 11%, barely down from its previous forecast of 10.7% to 12.7%. Secor noted that third-quarter revenue should profit from Rag & Bone’s performance, because the brand’s peak revenue period is available in the third quarter resulting from its wholesale focus.
Guess Q2 earnings results recap
For the second quarter ended Aug. 3, 2024, Guess reported:
- Total revenue rose 10% to $732.6 million, up from $664.5 million last 12 months.
- Europe revenue increased 5%, with retail comparable sales, including ecommerce, up 1%.
- Americas retail revenue grew 8%, but retail comparable sales, including ecommerce, dropped 10%.
- Asia revenue fell 8%, with retail comparable sales, including ecommerce, down 14%.
- GAAP net lack of $10.6 million, in comparison with a $39 million profit in the identical quarter last 12 months.
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