Guess Inc.’s online sales in the Americas grew slightly in fiscal 2017 while overall revenue slid for the apparel and accessories manufacturer and retailer. The company says it will shrink its U.S. business and close 60 North American stores in the next year.
The retailer, No. 278 in the Internet Retailer 2016 Top 500 Guide, reported annual e-commerce sales of $92.40 million in the Americas region for fiscal 2017, up 3.2% from $89.53 million the previous year. Meanwhile, annual sales in Guess retail stores located in the region totaled $843.08 million, down 5.5% from $892.41 million in fiscal 2016. Online accounted for 9.9% of overall revenue in the Americas for fiscal 2017, which ended Jan. 28.
For the fiscal fourth quarter, Guess’s online revenue in the Americas dropped 1.0% year over year to $32.61 million from $32.95 million. The store sales decline was more pronounced in Q4, with a 7.0% year-over-year drop to $256.29 million from $275.69 million.
E-commerce is driving solid results in Europe and Asia, while online sales in the U.S. are “a little bit softer,” CEO Victor Herrero said during the earnings call, according to a transcript from Seeking Alpha. He told analysts Guess remains focused on “delivering best-in-class digital and in-store experiences.” Herrero pointed to online and mobile initiatives that Guess is implementing and said the retailer is working to integrate its online and in-store channels, though he did not give details.
Previously, in fiscal Q3, the company said its to-do list included creating interaction between retail, wholesale and e-commerce; improving customer relationship management; focusing on unified loyalty programs; emphasizing use of email and social media; creating more innovative user experience; and enhancing mobile technology to drive customers to the store through the e-commerce platform or online to offline capabilities. In its year-end call last week, Guess didn’t specify how much it would spend on the initiatives and provided no additional details.
Last week, Herrero said Guess has identified 60 stores it will close in North America during the next year, and the retailer will consider closing 100-120 stores in 2018. The retailer has closed 62 stores in the past two years, including 10 locations in Q4. Guess currently has 452 stores in the United States and Canada, and 95 locations in Central and South America. The Americas region accounts for nearly a third of the company’s 1,680 bricks-and-mortar locations.
Chief financial officer Sandeep Reddy said Guess will make more social media-based marketing pushes and use celebrities and bloggers to endorse the brand.
For fiscal Q4 ended Jan. 28, the company also reported:
- Total revenue of $679.27 million, up 3.2% from $658.26 million in the year-ago period.
- Retail store and web sales in the Americas region of $288.91 million, down 6.4% from $308.64 million.
- Wholesale sales in the Americas region of $33.66 million, up 1.0% from $33.34 million.
- A year-over-year comparable-store sales decline, excluding e-commerce, of 7.8%. When including the impact of e-commerce sales, the decline was 7.0%.
- Net income of $8.66 million, down 82.4% from $49.29 million.
For fiscal 2017, Guess also reported:
- Total revenue of $2.209 billion, up 0.2% from $2.204 billion in fiscal 2016.
- Retail store and web sales in the Americas region of $935.48 million, down 4.7% from $981.94 million.
- Wholesale sales in the Americas region of $141.02 million, down 5.9% from $149.80 million.
- A year-over-year comparable-store sales decline, excluding e-commerce, of 5.7%. When including the impact of e-commerce sales, the decline was 4.9%.
- Net income of $25.40 million, down 70.1% from $84.82 million.