Guess Rebounds to $25.6M Profit in Third Quarter Ahead of Market Departure

Guess leaves the stock market in the black. The U.S. company, which is about to be delisted through an acquisition agreement between the company’s co-founders and the brand management group Authentic Brands, has closed its last quarter on the stock market reversing the losses of a year ago. The deal, which values Guess at $1.4 billion, will officially close in the fourth quarter of the year.

Specifically, the company ended the third quarter of the fiscal year (period ending November 1st) with a positive net result of $25.6 million, compared to a loss of $23.4 million in the same period of the previous year. For the nine-month period, Guess did post a loss, but only a loss of just one million, compared to the $20.9 millionit lost last year.

In addition to reversing the red numbers, the last quarter on the American company’s trading floor has also been marked by a growth in sales, which have increased by 7.1% at the end of the third quarter. In total, Guess has sold products worth $791.4 million.

Guess reversed its losses during the last quarter, despite a reduction in operating income

By markets and business lines, however, the evolution of the business has been uneven. Specifically, Guess increased its sales in Europe by 9.6%, to $404 million, and the wholesale business in the Americas, where the company has increased its sales by 28%, to $126.1 million.

On the other hand, turnover contracted by 2% in American retail, to $170 million, and by another 8% in Asia, resulting in sales of $60 million. Through licensing, on the other hand, Guess earned $31.1 million, 6% less than in the third quarter of the previous year.

Guess operating profit, however, was down 45%. In Europe, the figure was up 4% to $33.7 million, while wholesale business in the Americas was up 13% to 28.7 million. In both American retail and Asia, however, the operating result was negative, with losses of

 $8.9 million and $2.7 million, respectively.

The acquisition by Authentic Brands valued Guess at $1.4 billion 

In the first nine months of the year, the U.S. company also increased its turnover by 7% to $2.21 billion. Sales rose by 11% in Europe, to $1.147 billion, and in the Americas. On the continent, retail sales rose 2% to $506 million, while the wholesale business jumped more than 23% to $302.7 million.

Both business in Asia and licensing revenues fell by 10%. In the first case, turnover stood at $173.9 million, while licensing generated $82.3 million for Guess.

The turnaround in Guess’ business comes on the eve of its delisting from the stock exchange. In late summer, U.S. brand management giant Authentic Brands reached an agreement with Guess founders Maurice and Paul Marciano and CEO Carlos Alberini to acquire 51% of the company. The remaining equity will remain in the hands of Maurice, Marciano and Alberini.