Guess? hit by weak sales, strong dollar

The CEO of Guess? is pointing to initiatives to boost merchandise quality, build its business in Asia, and improve accountability within the company in the face of another lackluster quarter of financial results.

Guess? reported a same store sales decline of 7%. However, on a constant currency basis, sales decreased 3%; retail comp sales including e-commerce decreased 6% in U.S. dollars and 2% in constant currency.

The company recorded net earnings of $12.4 million, a 40.1% decrease compared to $20.8 million for the third quarter of fiscal 2015. Diluted earnings per share decreased 37.5% to 15 cents, compared to 24 cents for the prior-year quarter.

"I am very pleased with the progress we have made on the first three initiatives I identified on our last earnings call," CEOVictor Herrero said. "On our first initiative, elevating the quality of our sales and merchandising organization, we have started building product knowledge, improving our digital marketing and social media capabilities, enhancing visual merchandising to emphasize best sellers and breadth of product and ensuring that pricing of our line delivers a consistent message. On our second initiative, to build our Asia business, we have made some critical hires and are deploying incremental capital to fuel the growth of the markets in this region. Most critically, on the third initiative, to reinforce a culture of purpose and accountability, I am laser focused on driving the organization to raise the level of execution as this will be a critical enabler of successful achievement of our strategies."

Total net revenue for the third quarter decreased 11.7% to $521 million, from $589.8 million in the prior-year quarter.

The company now expectsnet revenues to decline 1.5% or increase 1.5% in constant currency.Diluted earnings per share are expected to be in the range of 53 cents to 64 cents.

As of Oct. 31, the company operated 826 retail stores in the Americas, Europe and Asia.