Guess?, Inc. GESis slated to release first-quarter fiscal 2019 results on May 30. Notably, the company’s bottom line outpaced the Zacks Consensus Estimate in the trailing four quarters, the average being 34.7%. With this in mind, let’s delve into how things are shaping up for the upcoming announcement and see if this leading designer and distributor of lifestyle products can maintain its positive earnings surprise streak.
Europe & Asia Segments: Key Growth Catalysts
Guess?’ Europe and Asia businesses have been projecting sturdy growth for a while, courtesy of constant store openings and e-commerce initiatives. During the fourth quarter of fiscal 2018, the company introduced 15 directly operated stores in Europe and opened 25 new stores in Asia. Well, such factors have aided revenue growth of 40% across Europe and Asia in the fourth quarter of fiscal 2018.
Driven by robust opportunities, Guess? continues to make capital investments in the European and the Asia businesses. It plans to make 60 store openings in Europe in fiscal 2018. In fact, e-commerce growth in the company’s Europe and Asia segments played a major role in augmenting comps and the top line in the past. Management stated that e-commerce business in Europe is gradually approaching the size of American e-commerce operations. As for Asia, digital sales in China have been a major driver, owing to the company’s alliance with Tmall.
Going ahead, the company expects sales in Europe and Asia to continue rising in double-digits, while margins are expected to expand in fiscal 2019. Such positive sentiments raise our hope regarding splendid performance from these regions in the upcoming quarterly release. Incidentally, the Zacks Consensus Estimate for sales for the first-quarter from the European and Asian segments are currently pegged at $195 million and $81 million, respectively, depicting growth of almost 17.9% and 27.8% from the prior-year quarter’s tally.
Strong European and Asian operations are likely to fuel the company’s top-line performance in the impending quarter. Notably, management expects consolidated net revenues to improve in the range of 11-12.5% for the first quarter. On a constant-currency basis, consolidated net revenues are projected to grow 5.5-7%.
Further, analysts polled by Zacks expect net revenues of $510.5 million for the first quarter, reflecting an improvement of 11.3% from the year-ago figure.