Guess Slides on Wider-Than-Expected Loss, Weak Guidance

Guess expects second-quarter revenue to 'have a decrease similar to that of the first quarter.'
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Guess  (GES) - Get Report posted a wider-than-expected first-quarter loss Wednesday as the designer and retailer of apparel and accessories struggles to recover from the coronavirus pandemic shutdown.

Shares of the Los Angeles-based company were tumbling 12.3% to $11.10.

Guess reported a net loss of $157.7 million, or $2.40 a share, compared with a loss of $21.4 million, or 27 cents, a year ago. Adjusted loss came to $1.81 share, wider than FactSet's consensus for a loss of 91 cents.

Sales totaled $260.3 million, down 51.5% from $536.7 million a year ago, and missed FactSet's call for $303 million. Americas retail revenue tumbled 57.7%, while European revenue dropped 49.3%, and Asia revenue decreased 52.6%.

Second-quarter revenue is expected to "have a decrease similar to that of the first quarter."

Many of the company’s wholesale and licensing partners have also substantially reduced their operations, Guess said, and the company will continue to bring back store associates and support staff as stores reopen.

Guess, which was forced to shutter its stores and furloughs employees in response to the coronavirus outbreak, began reopening its European locations in mid-April, while some U.S. and Canadian stores began reopening in mid-May. All stores in Asia are open.

Sales productivity for brick-and-mortar stores that have reopened since May 2 is roughly 75% in the U.S. and Canada and 70% in Europe compared with a year ago, Guess said.

The company said it will continue to reopen stores in phases as state and local guidelines and conditions permit. E-commerce sites have seen lower traffic, Guess said, but this has been partially offset by a strengthening in conversion.