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TheStreet Open House

Guess? CEO Discusses F2Q 2013 Results - Earnings Call Transcript

Stocks in this article: GES

In our international businesses our performance was solid. Both Europe and Asia exceeded our top line expectation despite stronger currency headwind that we had planned, which also put additional pressure in our product margin. Our licensing business also outperformed expectation, giving us continued confidence in the strength of our brand worldwide. North America was our most challenging business where traffic was down specifically in tourist location.

In Europe we exceeded our revenue directive even as the microeconomic environment remained uncertain, especially in the south, where a fall off in consumer confidence has certainly affected store traffic. We continue to make strides in growing our business outside of our more developed markets of Italy and France.

Excluding these two markets revenue increased roughly 8% and both Germany and Russia posted double digit gain in the quarter. We were pleased with our retail store performance in Europe where overall comp improved from the first quarter and we experienced an increase from July. We continue to stir up with significant white space in the region and we plan to optimize our multi-channel distribution capability and pursue growths in many markets where our brand is under distributed.

In Asia, our brand continued to gain traction and we exceeded both our top and bottom line expectation for the quarter. In South Korea, both new doors expansion and positive comp helped to drive double-digit top line growth in the quarter, a big improvement from the first quarter.

So far this year we have opened 47 stores in concession in that region. Our team executed well in that period and we continue to be optimistic about the potential for G by GUESS in South Korea, where we have already opened 60 stores in concession.

In China, our business grew by 40% in the quarter, fueled by strong positive comp. We ended the quarter with 161 stores in concession in this very important market for us and our goal is to expand another 45 location by the end of this year.

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