Guess Inc (GES) has reported a 26.85 percent fall in profit for the quarter ended Oct. 29, 2016. The company has earned $9.10 million, or $0.11 a share in the quarter, compared with $12.44 million, or $0.15 a share for the same period last year.
Revenue during the quarter went up marginally by 2.95 percent to $536.32 million from $520.96 million in the previous year period. Gross margin for the quarter contracted 165 basis points over the previous year period to 33.61 percent. Total expenses were 97.18 percent of quarterly revenues, up from 96 percent for the same period last year. That has resulted in a contraction of 118 basis points in operating margin to 2.82 percent.
Operating income for the quarter was $15.12 million, compared with $20.84 million in the previous year period.
Victor Herrero, chief executive officer, commented, “While I recognize the challenges we are facing in the Americas, I am thrilled that, due to our various revenue enhancement initiatives, our third quarter revenues increased by 3%. We enjoyed strong double digit growth in Europe and in Asia, and we remain focused on improving our profitability in North America. As we reach the end of our transition year, I look forward to fiscal year 2018 with tremendous anticipation and excitement.”
For the fourth-quarter, Guess expects revenue to grow in the range of 3.50 percent to 7.50 percent. Guess expects revenue to grow in the range of 0.50 percent to 1.50 percent for the financial year 2017. The company expects operating income to grow in the range of 7.50 percent to 9.50 percent for the fourth-quarter. For fiscal year 2017, the company expects operating income to grow in the range of 2.50 percent to 3 percent. For fiscal year 2017, the company expects adjusted operating income to grow in the range of 3 percent to 3.50 percent. The company projects diluted earnings per share to be in the range of $0.40 to $0.50 for the fourth-quarter. For financial year 2017, the company projects diluted earnings per share to be in the range of $0.59 to $0.69. For financial year 2017, the company projects diluted earnings per share to be in the range of $0.42 to $0.52 on adjusted basis.
Operating cash flow turns negative
Guess Inc has spent $30.78 million cash to meet operating activities during the nine month period as against cash inflow of $64.73 million in the last year period.
The company has spent $25.38 million cash to meet investing activities during the nine month period as against cash outgo of $30.53 million in the last year period.
The company has spent $44.98 million cash to carry out financing activities during the nine month period as against cash outgo of $107.99 million in the last year period.
Cash and cash equivalents stood at $349.10 million as on Oct. 29, 2016, down 13.24 percent or $53.28 million from $402.39 million on Oct. 31, 2015.
Working capital decreases marginally
Guess Inc has witnessed a decline in the working capital over the last year. It stood at $690.95 million as at Oct. 29, 2016, down 4.45 percent or $32.14 million from $723.10 million on Oct. 31, 2015. Current ratio was at 2.90 as on Oct. 29, 2016, down from 3.21 on Oct. 31, 2015.
Days sales outstanding were almost stable at 35 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 55 days for the quarter compared with 96 days for the previous year period.
Debt increases substantially
Guess Inc has witnessed an increase in total debt over the last one year. It stood at $24.10 million as on Oct. 29, 2016, up 263.01 percent or $17.46 million from $6.64 million on Oct. 31, 2015. Total debt was 1.53 percent of total assets as on Oct. 29, 2016, compared with 0.44 percent on Oct. 31, 2015. Debt to equity ratio was at 0.02 as on Oct. 29, 2016, up from 0.01 as on Oct. 31, 2015. Interest coverage ratio deteriorated to 30.25 for the quarter from 71.36 for the same period last year.
Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
