For Q2 Guess’ revenues increased five per cent, operating margin expanded 120 basis points and operating profit grew 49 per cent compared to last year’s second quarter. There were positive results in Europe and Asia, where revenues saw double-digit increase, as a result of new store openings, wholesale growth and positive comp sales. Trends in operating margins for these two regions expanded this quarter compared to last year.
Net earnings rose 30.4 per cent. Adjusted diluted earnings per share grew 26.7 per cent compared to last year. But retail revenue in America dropped 11.2 per cent. E-commerce sales and retail comp sales fell 10 per cent. However, America’s wholesale revenue grew 6.6 per cent.
European revenue grew 20.1 per cent. Retail comp sales, including e-commerce, grew five per cent. Meanwhile, Asia revenues grew 17.5 per cent. Retail comp sales including e-commerce grew seven per cent.
Guess has achieved meaningful cost reductions, especially in its supply chain. It’s accelerating reduction of its footprint in the US, which currently makes up less than 36 per cent of its global sales. It has significantly increased adjusted guidance for fiscal 2018 and is now expecting to grow top-line, adjusted operating margin and adjusted earnings per share compared to last year.