Guess CEO says 'retail environment remains challenging' in Americas
Victor Herrero, CEO, 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." Herrero continued, "Third quarter earnings finished at the low-end of our guidance. Overall we are pleased with the performance of our international businesses. In Europe, our revenues were up 16% driven by new store openings and another strong quarter of positive comp store sales. Our European wholesale order book for Spring Summer finished up 1%, marking the second consecutive season of growth in the European wholesale business. Turning to Asia, revenues finished up 10% driven by new store openings and positive comp store sales in China." Herrero continued, "In the Americas, where the retail environment remains challenging, we are more than ever focused on improving the profitability of our retail business. In order to do so, we have identified a four point plan that we believe will drive value for our business: (1) continue to negotiate rent reductions whenever possible, (2) close unprofitable stores upon lease kick-out or expiration unless new rent terms make them profitable, (3) continue to implement supply chain initiatives including vendor consolidation, fabric platforming and source country diversification and (4) enhance our digital capabilities to help set ourselves apart from other retailers." Herrero concluded, "As for the outlook for the current fiscal year, our previous full year guidance assumed better comps and gross margins in the Americas Retail segment for the fourth quarter than we are now expecting based on our third quarter results and trends so far in the fourth quarter. This is the main driver of the change in company guidance."