Guess swings back to black on solid fourth quarter, CFO departs

By

Benjamin Fitzgerald

Published
Mar 17, 2022

Guess Inc. announced on Wednesday a return to profit for fiscal 2022, on the back of a solid fourth quarter which saw the U.S. fashion company deliver revenues in line with expectations and exceed profit targets. 

The Los Angeles-based Guess said fourth-quarter sales increased 23.4% to $799.9 million, from $648.5 million in the same prior-year quarter. ​Net earnings fell to $68.4 million, a 2.8% decrease from $70.4 million for the fourth quarter of fiscal 2021, while diluted EPS decreased 2.8% to $1.04, compared to $1.07 for the same prior-year quarter.

Despite the quarterly income dip, the company said it "delivered revenues in line with our expectations and exceeded our profit targets through strong gross margin performance and effective expense management."

"Our results this quarter cap an outstanding year for our company, where the execution of our strategic initiatives helped to deliver much higher profitability, well in advance of our original plan," said ​Carlos Alberini, chief executive officer, Guess Inc. 

"We closed the year with over $300 million in earnings from operations and reached an operating margin of 11.8%, more than double our pre-pandemic levels by both measures. We delivered a return on invested capital of 26% for the year, the highest it has been in ten years. Our balance sheet is strong, and we plan to use our capital opportunistically to return value to our shareholders through dividends and increased share repurchases.”

For the full year, Guess revenues increased 38.1% to $2.59 billion, from $1.88 billion in fiscal 2021, while net earnings surged to $171.4 million, compared to a net loss of $81.2 million.

Coinciding with its earnings update, Guess said ​Dennis Secor has been appointed interim chief financial officer, effective April 1.

Secor replaces ​Katie Anderson, who is stepping down to pursue another opportunity at a privately-held company as CFO. Guess said it plans to initiate a search for a permanent chief financial officer, with the assistance of an executive search firm.

“On behalf of everyone at Guess, I would like to thank Katie for her leadership and contributions to the company,” added Alberini.

“Katie has played an important role in our ongoing business transformation, including strengthening our balance sheet, implementing cost savings measures and delivering for our shareholders. We’re excited for Katie as she embarks on a new adventure and wish her the very best.”