GES - Earnings call transcript Q2 2019

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Operator

Hello and good day everyone and welcome to the Guess Second Quarter Fiscal 2019 Earnings Conference Call.

On the call is Victor Herrero, Chief Executive Officer and Sandeep Reddy, Chief Financial Officer.

During today’s call, the company will be making forward-looking statements, including comments regarding future plans, strategic initiatives, capital allocation and short and long-term financial outlook. The company’s actual results may differ materially from the current expectations based on risk factors included in today’s press release and the company’s quarterly and annual reports filed with the SEC.

Now, I would like to turn the call over to Mr. Herrero. Victor

Victor Herrero

This third everyone. CEO as marks Guess. of call afternoon, anniversary my the Good

just years turnaround tenure our our characterize feel of of X reaping on for first The my executing we as while has repositioning as turnaround that begun. start globally. confident staying the year focused company, investing benefits was I Guess I investment third strategic will of only initiatives. the the the the year capital and period a laser

We the well-positioned fiscal margin with our are exit to year the operating every this and profitable company business goal. X.X% path segment firmly on of

We will are the revenue share growth. second guidance detail quarter our growth that adjusted double-digit operating get operating high-end will later, again. driven we finished profit by full above current guidance for fiscal cost the the our our revenue of per and improvement. margin our And Today, earnings reported for through there Sandeep year we and increasing year as continued adjusted

new Let company. for positive revenues up merchandising I since The quality was U.S. us store comp to of marked region, positive X% momentum openings, by increase our the up quarter the quarter initiatives the and constant an in European sales in e-commerce, increase comps currency. constant in XXth every in our successful the European including growth joined continuing and comps, wholesale revenues from currency X% U.S. dollars the the quarter consecutive strategic for Europe. and XX% in implementation dollar elevate XX% organization. of grew The of and in start driven the

Turkey, our France, stores stores in and were Poland. we directly stores partners. from markets. During Russia We in in and Germany, stores opened Republic, Spain, first the Czech acquired operated Switzerland, in including Cyprus Europe, XX those we Cyprus, UK, that quarter, XX The Republic opened our Czech stores Belgium, Austria, directly operated

our to double-digit season logging our the are wholesale channel. of growth strong. summer continues consecutive XXX be from on extending to spring the European back double-digit pressure distribution cost costs moderate center. strategic XXXX, business pressure primarily expected in Our distribution European incremental move third to in to the due of segment contracted consequent fall growth very from to on After initiatives expected this fourth related revitalize the to basis is the the year. wholesale we the progress XXXX, points winter season segment by our expecting margin in half of The margin distribution

were e-commerce, in XX% dollars U.S. the quarter was the Asia, second positive XX% constant and strong up first revenues constant U.S. by China by quarter. in comps, Moving store Japan And similar in currency. in openings, XX% up and growth performance to new in quarter particularly and in dollar in region the XX% Revenue Greater including was currency. driven the up to

basis operating on segment decrease The Singapore. is the expected margin Operating for year. in Australia segment in points contracted to Asian half the investments quarter and Foshan, XXX Shenzhen quarter, in we opened stores in a and Guiyang Shanghai, stores net and the including in the opened Fuzhou stores Northeast, in Asia Suzhou, During X China. in back Southeast. the by pressure the the we operated of in margins the driven basis, in Within China, Dalian in XX Southwest directly the on

and for a margin have are our path track the region. expand to double-digits of low to the We year clear on margins goal in

a initiatives very in to As you on major build well see, strategic we can our are business Asia. executing

decreased sequentially again from improvement sequential U.S. up in in currency. the currency. quarter Americas dollar for the constant to Retail, e-commerce X% and from pleased with dollar Revenues including This really we quarter a in constant and sales, was U.S. last X% second quarter. in this comps the Turning are were for in business. tougher the Comp year turnaround in and quarter the first

promotional points of was marking margin with quarter store markdowns, fourth rent driving year closures. the less achieved our consecutive significantly margins basis are This than operating higher reductions We last through expansion. IMUs, and AURs the quarter XXX Operating lower better expanded negotiated comp. in

previous As and through are I with calls, our told collaboration you focused on on influencers elevating we brand presence celebrities.

with to new existing our partnership impact well customers our this going attract to through forward. that on first expect powerful we the brand engagement initiative, are as investment demographic social media. further as Align We have our customer digital brand building a in

the are method delivering investing video Millennial demographics live and through Instagram. platforms that YouTube like the for and in communication and Gen media preferred Z key content For are of example, we video, we and social

sharing Our as we are first significant million million million application partner as far them. evidenced excited am the will real experienced this Guess Instagram X TikTok, video X.X also by increased, users follower engagement XXX strategies partnership new reaching with traction followers our to with I very be with gaining brand has thus the the globally. with year

and As digital active on constantly you front we very can remain innovate. the see,

we our Europe expected are revenues quarter grow So year. both reported consecutive Asia just to eighth in double-digits in and summary, growth. for this revenue

time expecting are retail for to be in the positive X comps years. We for year first American the

to segments profitable. We this are business be expecting the all year

the current We fiscal year. the adjusted for raising are guidance

and to revenue We and expect organization. space available beyond growing quality next and merchandising year the wide sales to elevate our into tapping of global strategic by our our executing continue initiatives

with turnaround this today, consecutive margin goal. and Asia. serves to see Americas But This path my turnaround for to profit to to operating exciting the two expect losses. and the achieve A our fourth growth in joining in company. Retail I started, and of powered me had years Europe to on shorten and the for after for in are time This We X.X% margin by company. year ago, turnaround sales I Guess and an our is our of the goal profitability accelerate it return the track Sandeep? year as year start X.X%

Sandeep Reddy

afternoon. good Thank you, Victor and

certain to our Please or During or reference refer reconciliations this non-GAAP comments earnings measures. such conference today’s for release adjusted measures. GAAP of descriptions call,

and U.S. in highlight versus I revenue this quarter million, dollars consecutive Second of prior XX% growth. quarter that to currency revenues eighth quarter. XX% were like was year would our $XXX in constant up the

foreign More that by X lower higher we quarter time have grew by to the of additional year in to quarter importantly, for margins aforementioned XXX improvement Europe. Please today earnings X.X%, in second points. the sales by this high by the partially margin and expenses basis company. pressure points distribution at the operating increase from currency in basis years an negative by startup of distribution the a of new margin better adjusted increased Adjusted offset last gross impact Total points costs from of $XX finished margin margins the operating our million, basis points fifth of SG&A sales versus Adjusted earnings advertising we was for second occupancy expanded European on information operating refer driven including driven markdowns margin XXX year as sales increased than This quarter favorable the logistics XX% by investments gross double-digits XX.X% marks mainly rents growth operating the in first percentage and by of gross in SG&A. driven company. de-leverage for roughly quarter. XXX for IMUs, the primarily was adjusted where operating third less center. release consecutive company related segment. our the basis press XX was our consecutive of offset expansion from expansion by the This and last impact Adjusted to

per XX% last XX% in roughly Our compared per per adjusted $X.XX. earnings adjusted currency down diluted an share of of Adjusted share in quarter at the on year’s second was tax This was to earnings from $X.XX. share better the year. our represents than of impact XX%, quarter The finished second favorable rate guidance quarter. $X.XX last high-end improvement diluted earnings

on from dollars XXX Moving adoption the million, U.S. dollars in in impact constant year, were recognition the versus $XXX sheet, receivable currency X% the was ASC XX% impact the Inventories adoption including in standard. XXX in X% revenue currency, and up balance the revenue from ASC up of of the and including million, last U.S. $XXX to XX% standard. recognition constant accounts

$XXX the quality are as in the of the capital of paid ended prior cash back returned the share end million This to cash our compared was in negative changes driven million. XXXX, is in our dividends was million with the $X.X $XX to in and the flow quarter $XX quarter Since million with the share of versus equivalents year’s and negative at to the of million of working have inventory the $XX we $XXX months. shareholders year. by cash half repurchases we expenditures. buybacks. year. shareholders start million, capital last compared very year less in $XX Cash of last million enter in increase having to We last and the of in second $XXX million Free $XXX dividends program cash form million returned pleased We and reduction $XX XX billion after a debt in dividend our for

year in for guidance, XXX and outlook the the includes charges. our asset any ASC that XXXX full does into I the point quarter of Moving impairment assume adoption out third not total for of outlook revenues by table should The fiscal supplemental the company the Also attached for our revenue release. effective included guidance standard, became sales which earnings in recognition first is quarter. the comp and to segment and

the third X.X prevailing growth quarter exchange expected XX.X% a the Asia. be quarter. in point estimate up expect and XXXX, on XX.X% driven currency roughly of constant rates, for we quarter we currency revenue fiscal revenues in by headwind to For that At will consolidated strong Europe for growth be percentage the to

up to The improvement to year increased chain an digital lower primarily be be advertising. to investment up in rate and to expected last lower markdowns marketing SG&A our IMU compared is supply and initiatives, to rents. due margin gross Our is due from expected

currency. quarter not planned per planning the does any further XX share $X.XX are from for We $X.XX X.X% basis the a share operating and and X% point buybacks. range tailwind is an assume share per per to between of margin in share Earnings with

the this point currency, represents an for and basis guidance. improvement increase of at margin operating a Excluding quarter EPS end high XX adjusted the adjusted X% in in

the for be is rate XX%. estimated tax Our quarter to third

currency. constant prior should and account impact in to we for rates, revenues Americas basis consolidated tailwind we the expect be exchange after We expect on week will currency the increase the revenue growth that revenues the At year consolidated X% and stores noted prevailing the an in XXrd year. that XXX be negative closing from even be points into It taking in comparative year. after estimate between up the X.X% in for

and markdowns we as year, in lower IMUs be rate European be gross margins to lower full both investment as the The improved costs. to to SG&A the rents. the expected for and to advertising in digital For distribution up expect year and of Americas well is due due increase up marketing Europe,

for the Our the year our effective tax benefits reform. is be estimated from rate includes XX%. to the tax to tax rate resulting This

are and X.X% a operating planning between X.X% margin our impact adjusted rates. guidance operating currency assumes roughly on currencies prevailing margin with at and We remain an minimal foreign

We are tailwind The compares raising excluding $X.XX $X.XX the $X.XX, to a last per year’s share. guidance of of guidance by year $X.XX EPS. prior currency increase In tailwind. to effectively The share included guidance $X.XX of of other over the adjusted includes impact our increased words, $X.XX a end guidance currency. for our to we have share. the This earnings at our adjusted to $X.XX new guidance earnings of our per per range represents roughly per XX% which top high-end currency share

of increase million million basis $XX expected operating high-end guidance XX% the in from a our an to business retail conclude as company’s continued and $X.XXX has of a shareholders technology $XX Europe payable will our range at our the The represents points. adjusted in XXXX. record of per CapEx approved the quarterly Excluding for improvement to remarks to year dividend EPS in call Board we invest infrastructure up and on impacts, XXX in for represents expansion and currency to adjusted margin of I Asia is that, your the September to support the and With XX, questions. of Directors of share growth. that open close long-term

Operator

sir. you, Thank

Instructions] question question-and-answer now session. Anderson. Susan comes The in will the the from We first [Operator begin queue

is line Your open.

Susan Anderson

think Americas little thoughts we good then we that getting and on the a see see improved half the should the Thanks. op and to across Hi, all the I potentially Good that have bit guess a any the the performance front, margin nice into down to quarter. job if shutting the dig on as I bit you better Very performance nice wanted from helpful? about in will regions there that really. timing DC on pressure in evening. the how Europe, great little to as old DC abating back there be around go the

Sandeep Reddy

Hi, Susan. Sandeep. This is

I basis you had continue will go did we volumes margins we committed said actually drive we point have second as back we I the the really double-digit think remarks, that the and the to out the the noted remain to to op improvement compared a actually on we said a regions. contraction back the quarter European initial we to think point expect I plans. a and get goal for to distribution I XXX think operating able when this We ahead call, about more in QX think basis goes moderate something And pressure but European we much last are prepared half where our XXX better think significantly decline, that should in want expect of in been as efficiencies – it, even as further margin to time I So of we margin. that where coming Sequentially, lot in essentially than to that margins. in on be productivity center

our moderate actually growing Those capacity and are of we to have see we extra actually making of investments. And beginning the started so and year. have some good our investments a and beginning actually happening expect needed we just that of profitability that to some the we half business move adapt moderate to our to impact back problem that from it’s to the the to already needs to is we been continue as through perspective,

Susan Anderson

so Americas the and now a there if half? comp And that continue about feel just Americas Retail, sounds sounds on in have expectation it nice momentum we third profitable just it like as to you go talk That into Retail back that, quarter could about pretty good. and confident momentum bit the you follow-up into of out Great. maybe the one see little kind sounds the you being

Sandeep Reddy

accelerated the currency So, Americas this in really you And to we I X in QX, about it’s think we are high-quality are performance. sales, really significantly Retail good plus is if I performance, we are with comp at and look constant thrilled our Susan think X about less plus it’s coming promotional. the thing

an disciplined we what we a through. perspective work was, started are the X, down doing more The it renegotiations roll so rent We very beginning because from in think last if been very that’s have I improvement, standpoint, or a they beginning standpoint. was product and work inventory work in about taken have to make importantly, who on all now, show the profitability out. rents in from I we aggressive the whether in – and inventory seasons from right we a to multiple And position And to stores that. good profitable it through. have which been was that very lot now very of an X IMU then the was beginning bring think from been think them to right of more a mean resonating actually then already seeing our have we didn’t whatever consistency I initiatives good are years And those and improvement close driving the execution seeing traction lot the position consumers are over strategic are from of is the a I is

And to to I further this see to where profitability And and mid that the businesses, for which we us are expect that to track the why the that we we place single-digits take margin we and are the on low like we segments, both a low Americas acceleration singles we be have said if be trend in single-digits. our in already segment on the brings expect low then there, together, all think be we profitability, and goal businesses. three the perspective, to big is business very segment, wholesale seem like with of you year from feel a on put the double-digits, the double-digits, to we profitable confident segment but out And expect I icing So to the comfortable stabilization enough entire see feel to a X.X% that part from segments really year. be we in current of not that, of for licensing the together expect the think we three mid portfolio segment cake the the getting only we to margin we Americas that’s the growth. Americas Asian European low in are single-digits, mid Retail Retail single-digits that

Victor Herrero

tenure Susan, And years have like this long time. we basically very Hi company Victor. beginning that would to Guess. and what because Europe at the in this add improvement been pleased, something to almost X have is the are waiting for in we I and my been seeing Asia here And is were moment I for of Sandeep from big I

so with seeing actions quarters. for with can think very, hopefully basically the maintain – we that in are and America right we now several same trend all just pleased I and very are this we the explained, Sandeep

Susan Anderson

nice the details very the good quarter. job Well, quarter. all next for on and Great. luck Thanks

Victor Herrero

Susan. Thanks,

Sandeep Reddy

you. Thank

Operator

comes next Thank ISI. from Evercore in queue question you. the from The Omar Saad

Unidentified Analyst

guys. [ph] is actually Hi, for Omar. speaking Hey, Francesco this

know the on related And speaking one in see the beyond the U.S., channel, and give Just to guys in see perception evolving idea improving the it’s trends to your that on the U.S. sound guess, an the with do you are see region. then you to of I broadly Thank I evolving? I great if customer evolving do base you you could upbeat again region? the was wholesale how how brand follow-up, partners wanted more wondering how own relationship retail you. us your and

Victor Herrero

the I your – question, to of am of beginning answer going the beginning your Francesco.

of I there. will and been think the always there brand the has be always relevancy

last off. are And it’s been everywhere years is the people stores our that them, very the that option that that good digital as all that have think all really that the effort visit particular customer couple see place and well, and paying type ago I like whenever all for now generation the mean, also go in are I at I several moment, one everyone. we – Millennials, mean e-commerce, we stores, to fashion on in people strategies they we that have of we visiting people are we or it’s I e-commerce for whenever because cannot about wholesale. think or – shopping believe have years the us, these we we cool. have and that only channel a it’s that news we the couple sexy we have other or doing any basically all mean, celebrities, endorsement say go customers, are really a that for of I more several Z, distribution want think And our our be we of all social of we the this things doing media put the have Gen right our we I efforts

really with everyone our appealing think I is product. So,

I the years this this think going important having think lot consistency continue for we a have is few way. to been product thing the has one that and that helped been I last us

Sandeep Reddy

am something segment, wholesale pleased And to I in U.S., wholesale step our going bit on Americas back with. think just little partners that’s the follow-up we a really because I that to to just are the about question your

a I for business. good are we that And you see to high-teens I what’s the you there, in U.S. front outperformance think line. the that line for I guidance result guiding and third single-digits mid our overall can the on in to the if bit our the you look high top pretty half year think top single-digits. a is be there is the of tell driving the quarter, the expecting what in in itself we wholesale are was relative into growth of up started timing but we the year this at But

the why we with seeing consistency Victor going think partners are therefore with channels pleased our our all extremely us across that’s from And showing the in sales through are that’s was brand product making exactly up have with perspective, orders progress and I the there We the incremental are what channels, wholesale partners finding are and board. perspective and placing that we a we talking projections and that actually that are over in-house. about sell-through our based on orders including the

back thrilled the really after improvements for about. U.S. are time tough we in think year, are reasons all seeing we well are just a I last we talked that pretty quite So about the coming we the

Unidentified Analyst

partnership Okay, may much. give China, with day is broadly if wondering was strategic on And that you single us very and partnership the very I you. if that’s quick around some Thank speaking Thank you upcoming color important I growing? Tmall, considering how just your great. one follow-up

Victor Herrero

to having with it’s have very Well, partnership them. important, we partnership us trying a are with still very we it’s are strong – our or Tmall, still for

think it’s XX/XX, important because are building an I for we already date. the assortment the

experiencing in think that that before we solid omni-channel I think basically particular I channel. China And continue growth is mentioned market. as I an

we are to presence, have starting strong very an a now, well for a And is right thing e-commerce as important have retail presence. us. We which

China, we continue the strong building are a very doing over years we hopefully coming next so. relevancy I and think will

Unidentified Analyst

quarter. Great. on Thank and much you very congratulations the

Victor Herrero

Thank you.

Operator

Thank you.

Cowen. Our the comes John Kernan from next in question from queue

John Kernan

on the Congrats Victor. momentum. and all Sandeep afternoon, Good

Victor Herrero

John. Thank you,

Sandeep Reddy

Thank you.

John Kernan

the what you and back how half gross implied of – direction clean the confident key just lot is how wondering in it’s conservative, regions. looks margin the and like the fairly sell-throughs are inventories guidance given of it are your a Sandeep, in

that in restrict about margin you gross margin perspective So would that should from of can half? anything just be the we perspective some Thanks. thinking wondering, be may a the a I a had there have first Then momentum gross follow-up. from is

Sandeep Reddy

think let’s this off, first way. I Well, just it put

to be both as guiding are in up well for gross the year. quarter the We as margins

We But started expand. would gross year. really are profit we you the initiatives last our in rent generated margins improvement necessarily the half say as what mind early we are not keep we year, to into last implying should is not reductions year in the I got that that going and year back of significant

come the we up beginning So half are back against that to in of the year.

So, improvement fueling there are basically the back we are first improve that but half against is still to margin that the enough I think half. and things get – gross we are tougher than should were in our in us gross up compares margins,

John Kernan

operating Okay, line. that on is follow-up Victor, and a obviously basis what the you very improvement, catalyst My is impressive lot do to store think line is just base, do grow that the ultimately the you on margin? comp top but store Asia spending the is know start what for margin moving to think double-digit momentum I top a total makes you are towards sense. catalyst

Victor Herrero

continue. in that and will have think I where are saw and little mean double-digits, mean I Japan in double-digit stores but moment, this Australia on we the I are a our are continue healthy and having doing we Well, in I basically our bit from this what and low China took Singapore, of quarter the at are a the call process basically I quarter to as I definitely on over we especially is is you the the we margins investment this and mean, will margins because partners hurting path in performing very as comps is very we mentioned these. we think well my

important step step is I world we we we part of which trying or I parts And and have of are I in by like is Asia. in company, that continue similar very in and doing that Asia is something we Asia are in having mean this everywhere and and consistency are project the right the we a product not single I achieving past the a in that and as other the image product the every think Europe in deliver think perceived Americas. think same what we Asia is to we were same will Guess give

Sandeep Reddy

to add is on phases one be because and And Asia each actually market going we got John, to of the just uneven, thing investment different a a parts like characteristic. little operating and have been trajectory, the its collection bit markets has margin through own

So, saw and doing had of it then case of we are the in Japan that Australia. case we we in now China, the

So is we there margins, pressure maybe then initially a after that of that. when investments demonstrated make on we have comes bit but nicely very it back

pressure to to multiple to what half said And QX back a the remarks saw very would expect cycle basically I bit have. year. and are we little anyway the compared the we that keep going actually but we in that’s margins also So, to ease expand we in for you it’s the mind. a because we prepared It’s the uneven, markets, be that are track comfortable in in with double-digit on opportunity

in quarter to the be for relative expect a I noise say year. it’s the bit we where to of would So, little

John Kernan

customers? question question just and prior a sales in-store follow-up longer big it. you like you comp seeing a Got generations bringing the question. new And has terms lot the with marketing in a prior brand now you like are I final bringing in you of to positive to of Do Do about you store in a a bit feel you customers, Victor, from change. in marketing execution, increases changes North term are feel been of question. customers new new of message are the made you certainly are talked dramatic acquiring that merchandising, as you mean, the America are that’s part have

Victor Herrero

question. good Very

fashion, the that organization, are what really I what retail think also they moment, do we at of of what lot the of I things empowerment – in getting also doing what people type the of feedback the of type motivation think from them, – field we – marketing customer in activities all want, are are a this field the type our things. of their in

of its kind things Market did as Generation, are to helping with well these Farmers like example, people all So, for this with the us well. collaboration new as we attract year

whatever mean, the Gen have demographics and of have these new generation Millennials on I kind and are Jennifer look are had And really So, the with customer I right to kind TikTok. of in order I we to the mean, these are definitely, mean, of are majority in our am Lopez, the Gen Zs, do all really activities, go also are areas the interested we seeing, to store, All marketing ASAP of are – the we that things people Millennials, doing young at attract particularly that of we that in lot but celebrity I endorsements terms is brand, plenty mean there have. things we young stores. more Rocky. Z time really going and are of I or I more think now we really of mean we people, had I every what a And those the I we are type I

generations. generations to elder well kind are only not these of as all us So, as helping attract those as but new people, things well

attracting So, on to of our new that we channels. the terms performing in are very our to or we distribution happy are customer way different stores

John Kernan

of Best guys. luck. Excellent

Victor Herrero

you. Thank

Operator

from from And Janine the Stichter Jefferies. question in the queue next comes

line open. Your is

Janine Stichter

the Congrats on everyone. Hi, progress.

Victor Herrero

Thank you, Janine.

Janine Stichter

seeing? are the driver in understanding you then you Thank any quarter, maybe some it had what there the North you And Americas in business Europe then are more with progress regional feeling has biggest you into the you nice of for performance been actually seeing comp to that little about on positive? the that third traffic second are the you. dive can as you there variances like been business broadly and or back America any if comp in trend getting the then to the traffic looks you a an towards comment acceleration can looking has of some and in quarter just environment AUR, want bit, are how and comment on Just

Sandeep Reddy

Yes.

wholesale seeing at pleased business the I still to and executed thing the Europe, wholesale second looking the and business sequential quarter has it’s the been very be on I to doing is extremely in And single-digits, for based that comps we customers quarter. are really beginning strength with one good ago and progress we reflective that. strategic is it’s going pretty that third the right, years we think in are So the why of environment just the think but are think yes, you we underlying same in fine, equivalent of a initiatives I things are channels expected that have in we are our clearly, are think also and wholesale mid by looking pretty were of are which is are they about the I outlined broad Janine, sell-through therefore very I great, seeing we is the encouraged the I and retail well. between think buyers consistently like And comps. good pleased And Europe European been the being are that’s and health, think see the up kinds Europe that X about up, door which

So, in in healthy all a Europe. very driving direction channels are really

are going driver about think the mentioned pleased to that. things turning AUR where yes is. being super it the then And I Americas, you of on a So, comp,

think of all a quarters. and our sequentially but headwind bit four of our over celebrities it’s it’s the partnerships taking last I has approach little than early that year, probably a first think just and traffic the improved are that Victor things we all less expected of part making to that drag, still of but getting digital last And with really are much actually contribute things I going message talked about that in and with influencers we are are traffic the sure terms towards the marketing a improvement.

positive think what’s wanted idea. than stores seamless the the then in back. shopping into consumer then is and to I a less the We visual on improvement way initiatives come, I more time couple simple and into for perspective what you that’s inside took and that’s point. in you incrementally I once of just to and see our it years whole you the go can the to the get as people really trend outside much And about all an first the invite think and the a years years X Anybody hard taking get that’s store in you just impact is a are think see I make this expect and seeing and to of our the I but the that are appeal addition all from can comp to We to into work the be long windows but X merchandising all potentially the snowball make a of experience seeing you said, product beginning in, comp ago. to an stores, stores cluttered come we more it it of the was that going of and

Janine Stichter

Great. you. Thank

Operator

The the queue Telsey Dana with last in from Group. comes Telsey question Advisory

Dana Telsey

congratulations and progress. on everyone afternoon, Good the

product, through terms of can drive you. regions, different to we of also the should you side into product and license and that bottoms in for the categories year whether denim the think take look what’s continuing any you us half back to the sales? the As driving with Thank the of happening business, plans what’s on

Victor Herrero

Thank you.

XXs also In the terms very prints silhouettes trends, bold continuing is important, mixing bright product and where is of and as important. that think the important, print very color feminine influence in strong, still dressing very the I

is And we of kind I customer, also We type in denim washes special washes, of regarding the well. important important, what denim very lot the are logos denim. in is the continue embellishment importance Also still to in is denim, are terms our to think working what new the of of customers. with appealing destroyed the a as

new think going are very develop fabric fabric season. to as this on important well a we denim, example, for eco-friendly I for it’s wash on that like

I important, it’s mean, activewear important things should as but I of at think thing that denim now. there I mention moment. an this I important are the is trends of think right And one well So, as plenty also part well is

Dana Telsey

to note license on side And there? the anything

Victor Herrero

for Well, is working where versus license well, we X basically very think the as categories outfit, kind to been last years, mean, so I few have is I way you the sales, this the think from – to total attracted are everything licenses know very doing they and we in stores we very people better than because channel that or they and locate is don’t watches at we a are the what they any or shopping on buy to apparel board everything are handbags like our us that the our buy want distribution of only well of this handbags, the is of across of end very all and I important the all day important people past. in terms are – thoughtful attracted trying are are performing also performing the in

Dana Telsey

Thank you.

Operator

further gentlemen. you [Operator questions. ladies teleconference. Instructions] you, Okay, and we have Thank This concludes no Thank for participating. today’s

may disconnect. You now

Guess' (GES) 29 Aug 182019 Q2 Earnings call transcript