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Coming off double-digit growth in earnings and sales for the third quarter, company executives on Tuesday raised their earnings per share guidance for the year and predicted Guess' European operations alone could one day be a billion-dollar business. The growth comes as a result of Guess' increased focus on its own retail operations, as well as the development of additional brands and collections.
"Guess is not a wholesale company, but a retail company. It is a global company. This is a new beginning for the company once you [bring] the different concepts to [all] the regions of the world. There is plenty to execute. It is a question of discipline, a clear strategy and brand protection around the world," said Paul Marciano, chief executive officer, in a telephone interview.
"We continue to see the world as our field, not just the U.S. or Canada. That's why the company is so different today than 10 years ago or five years ago. More than 50 percent of our earnings are outside of the U.S.," Marciano explained, emphasizing that the company relies less on the U.S. market when the dollar is declining and benefits from the overseas markets when those currencies are on the rise.
For the three months ended Nov. 3, net income soared 32.5 percent to $58.3 million, or 62 cents a diluted share, from $44 million, or 48 cents, in the same year-ago quarter. The consensus from analysts called for 58 cents a diluted share.
Total revenues spiked 42.7 percent during the quarter to $469.1 million from $328.8 million. Total revenues include a 43.2 percent gain in sales to $446.7 million from $311.9 million, and a 32.6 percent increase in royalty income. For the quarter, the wholesale segment increased 75 percent to $76.9 million, while the European segment rose 78.8 percent to $159.4 million.
For the nine months, income jumped 53.9 percent to $131.3 million, or $1.40 a diluted share, from $85.3 million, or 93 cents, a year ago. Total revenues rose 44.2 percent to $1.24 billion from $856.4 million. Included in total revenues was a 44.4 percent increase in sales to $1.17 billion from $810.9 million and a 41.2 percent gain in licensing income to $64.3 million from $45.5 million.