Guess swings to loss in Q1

Guess Inc. swung from profit to net loss in the first quarter of fiscal 2017, missing analyst estimates for both net earnings and revenues.



The apparel retailer reported a net loss of $25.2 million, compared to net earnings of $3.3 million the same quarter a year earlier. Restructuring charges, a negative tax impact, and currency fluctuations helped push the retailer into the red.



Total net revenue for the first quarter of fiscal 2017 decreased 6% to $448.8 million, from $478.8 million in the prior-year quarter. Currency fluctuations had a negative impact on revenue.



Victor Herrerro, CEO of Guess, said despite current challenges, the retailer is still working to achieve three previously stated corporate initiatives of elevating the quality of the sales and merchandising organization, building its Asia business, and reinforcing a culture of purpose and accountability.



“I had highlighted on our last earnings call that the first six months of the year would be a transition period,” said Herrerro. “The start to the year has been a bit more challenging than we anticipated especially in the Americas and to a lesser extent in Greater China. These developments are reflected in our guidance for the second quarter as well as our updated guidance for the full year. We are still confident that we will be able to achieve the three-year plan goals we provided in March this year, but with a different cadence than initially planned."



For the second quarter, Guess expects Americas retail net revenues and same-store sales to decline in the low-to-mid single digits. For the full fiscal year, the retailer expects Americas retail net revenues to be flat to up low single digits and same-store sales to be down to up low single digits.