Guess? reported financial results for its third quarter ended October 31, 2015. Net earnings were $12.4 million, a 40.1% decrease compared to $20.8 million for the third quarter of fiscal 2015.
Article continues below
Diluted earnings per share decreased 37.5% to $0.15, compared to $0.24 for the prior-year quarter. The negative impact of currency on earnings per share in the third quarter of fiscal 2016 was approximately 13 cents.
Operating earnings for the third quarter of fiscal 2016 decreased 16.2% to $20.8 million (including a $2.5 million unfavorable currency translation impact), from $24.9 million in the prior-year period.
Operating margin in the third quarter decreased 20 basis points to 4.0%, compared to 4.2% in the prior-year quarter, due primarily to the negative impact from currency exchange rate fluctuations, partially offset by lower store impairment charges. The negative impact of currency on operating margin for the quarter was roughly 170 basis points.
Operating margin for the Company's Americas Retail segment increased 340 basis points to negative 0.9% in the third quarter of fiscal 2016, compared to negative 4.3% in the prior-year period. The increase in operating margin was driven primarily by a lower SG&A rate due to lower store impairment charges.
Operating margin for the Company's Europe segment decreased 20 basis points to 3.8% in the third quarter of fiscal 2016, compared to 4.0% in the prior-year period, due to lower gross margins, partially offset by a lower SG&A rate.
The lower gross margins were driven primarily by the unfavorable impact from currency exchange rate fluctuations on product costs, partially offset by higher initial mark-ups.
The lower SG&A rate was due primarily to the favorable impact on the fixed cost structure resulting from positive same store sales and lower store impairment charges, partially offset by the unfavorable impact from lower wholesale shipments.
Operating margin for the Company's Asia segment increased 170 basis points to 4.7% in the third quarter of fiscal 2016, compared to 3.0% in the prior-year period. The increase in operating margin was due to higher gross margins and a lower SG&A rate driven by overall leveraging of expenses as we phase out of our G by GUESS concept in South Korea.
Operating margin for the Company's Americas Wholesale segment decreased 560 basis points to 20.5% in the third quarter of fiscal 2016, compared to 26.1% in the prior-year period.
The decrease in operating margin was due to lower product margins driven primarily by lower initial mark-ups and the unfavorable impact from currency exchange rate fluctuations on product costs.
Operating margin for the Company's Licensing segment increased 140 basis points to 89.5% in the third quarter of fiscal 2016, compared to 88.1% in the prior-year period.
Other net income, which primarily includes net realized and unrealized gains on non-operating assets, partially offset by net unrealized mark-to-market revaluation losses on foreign currency balances, was $0.2 million for the third quarter of fiscal 2016, compared to $7.5 million in the prior-year quarter. ■
Over half of staff at the Financial Conduct Authority (FCA) are considering leaving their jobs as a result of recent decisions on pay, said Unite found in an employee survey carried out this month.