Apparel retailer Guess is tightly managing costs and inventory to mitigate the effects of COVID-19. During the second quarter of fiscal 2021, the company continued to experience lower net revenue compared to previous year, as it remained challenged by store closures and lower demand. The company partially offset revenue declines by reducing sales, general and administrative (SG&A) expenses for the quarter through expense savings, including one-time actions such as furloughs and temporary salary reductions, and permanent ones, including headcount reductions and lower discretionary spending.

The company also paid back a significant portion of previously drawn down credit facilities and reinstated salaries that had been temporarily reduced. During the quarter, Guess gradually reopened most of its global fleet of brick-and-mortar stores, resulting in stores being closed for approximately 30 per cent of quarter. As of August 1, approximately 95 per cent stores were open, with the majority of closed stores within interior malls of California.

The company’s net revenue for the second quarter ended August 1 declined by 41.7 percent to $398.5 million from $683.2 million in the prior-year period. It recorded a net loss of $20.4 million in the quarter compared to net earnings of $25.3 million for year-ago period. It saw an operating loss in the quarter of $14.3 million, including $12 million in non-cash impairment charges taken on certain long-lived store related assets. Its operating margin decreased by10.3 percent to negative 3.6 percent from positive 6.7 percent in the same year-ago quarter, driven primarily by overall deleveraging of expenses due to the negative impact from the COVID-19 pandemic on global operations.