US Apparel Retailer Guess Group Annual Net Profit Fell 13%

Recently, the fourth quarter and annual earnings report was released. By the end of the fourth quarter of December 31st, group net profit fell from $53 million 900 thousand last year to $47 million 800 thousand, and its earnings per diluted share fell from 65 cents to 57 cents, lower than that of financial institutions FactSet.

In the three months ending January 30th, group sales increased from US $100 million in the same period last year to US $101 million.

Year-on-year retail sales, including e-commerce, fell by 1%, which was again hit by currency exchange rates.

In terms of constant exchange rate, retail sales in North America were positive, while Europe recorded a high single digit growth.

Group net profit fell 5.5% to 658 million US dollars from last year's 696 million US dollars, which is higher than the 657 million FactSet expected by financial institutions.

By region, European revenues declined by 5%, Asia fell by 18%, and total retail sales in the United States dropped by 3%.

For the whole year, group net profit fell by 13.4% to $81 million 900 thousand from $94 million 600 thousand last year.

Net revenues in 2016 totaled $2 billion 200 million, a decrease of 8.7% compared to $2 billion 420 million recorded last year.

Group CEO Victor Herrero believes that there is still a lot of work to be done in the future, but it is confident that these measures will help the results.

The group plans to increase its total annual revenue from $2 billion 200 million to $3 billion over the next three years, with an annual growth rate of 11%.

He will pass.

And opening new stores to achieve these plans.

In the next three years, the group will open 60, 140 and 200 stores in the Americas, Europe and Asia, respectively.

This is about 50% growth rate, more than the brand currently operates 800 stores.

But some analysts questioned Guess's significant shift from closing stores to opening stores.

In addition, the group is expected to continue to face the negative impact of currency exchange rate and the weakness of shops in tourist areas.

Therefore, looking forward to the future, Guess expects net revenue in the first quarter to drop by 1.5%-0.5%.

The currency exchange rate problem is expected to have a negative impact on revenue growth by 2%, with a loss of 17-20 cents per diluted share.

Annual net revenue is expected to grow between 7%-9% and earnings per diluted share of 65-85 cents.

In the past year,

Close 38 stores and reduce cost plan to simplify business structure and reduce expenses.

The plan is expected to save $25 million annually in operating costs.

Chief executive Victor Herrero stressed that next year will be a year of pition. Even if the performance in the next two quarters will be disappointing, the group is confident that it will achieve a three year plan.