GES - Earnings call transcript Q4 2020

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Operator

Good day everyone and welcome to the Guess? Fourth Quarter Fiscal 2020 Earnings Conference Call.

On the call are Carlos Alberini, Chief Executive Officer and Katie Anderson, 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 outlook, including potential impact from the coronavirus outbreak. The company's actual results may differ materially from 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 Carlos.

Carlos Alberini

operator. you, Thank thank and for us joining Good you today. afternoon all we a It and that that to about have few well we great and only team's the closing, accomplishments our were year yet performance ago positioned our weeks was very excited about very great year. another were excited in of an we're time in today Unfortunately, unprecedented the middle our history.

out all events the those unfolding. by Our impacted to hearts go

a with solid year-end and we Today, by we increased our and were year performance. very fourth adjusted With grew operating strong reported a results, pleased We revenues, QX, we closed quarter EPS Guess? earnings XX%. our for almost increased and

navigate $XXX with free in positions cash. flow was ended to crisis. we liquidity $XXX the million. through Our current million year the This cash well And us

back our my past a just for and have with I what very thank proud this great accomplished during year to have team Guess? want celebrated first we of job. doing year. I I'm

great plan, made managed our performance, to you We and our redeveloped In we well we team. to strategic shared long-term significant upgrade reorganize last with leadership capital addition financial which and our December. changes

opportunities believe plan our the in that initiatives remain you. identified I that with for good for continue that long-term. the in this place to we strategic key still company And make the on we progress we share

challenged extremely situation difficult the the outbreak. we with everyone, several weeks were ago, As presented by virus

and to preserve with partners customers as in of diligently company signs regions the of and serious can. as and initial have world actively then, mitigate strongly been proportion, in our quickly people, the the teams to have Our to working consider situation and around affected. managing all And responded situation China. we been team our enormous effectively we health We risk our entire extremely and protect since the

get be believe crisis more near-term. things will resolved we in developments, to we But continue course, they get that on better. based will recent hope the challenging the before Of unfortunately,

encouraged, that We the renewed in China. are activity by however, we're seeing

Most still our have conditions, open. some return a affected that to normalcy. long are starting we to stores We offices way And similar while is recovery. or reopened. markets of business hope a show Our to our of follow even better other signs to go normal to have trajectory

you acceleration all we As affected business areas that extensive most are most most and China, and Japan by Italy. a markets experienced days affected rapid the the markets South the an know, have last were where Korea, of has and few the outbreak outbreak our significant week, the have reach, global has Greater during we impacted Canada. Until of U.S. But a the ago, Europe businesses. and of

a these result, we closed the stores in As majority regions. our have of temporarily

effective with are the that dealing believe strongly in a we I way. very crisis

been management before have commitment, and of crisis jumped our sense experienced my this extremely never We urgency with a team determination I proactive, have has that manage in career. to in and

by geography team, We react situations country. and and teams and well local regional global crisis to manage monitor, management activated a to as specific as

among in-person health. our We to people discipline, the on business their adapt inventories expense unprecedented large our and and ensure limited these and are safety well to meetings first our communicated We banned leading teams. adjusting protect to focus controlling provided circumstances. with strong their flexibility, travel, structure We constantly

it process, management. our monitoring vendor teams our supply clearly deceleration. our demand planning strategically inventory and and focus active will the with chain commitments dynamic We're inventory and and This a on communication daily require first Regarding our we business, is reducing partners. considering

expenses. our on focus we Next,

business but reduce into are deceleration the responsibly mitigate to to rapidly, we was future. goal and that Our experiencing the our costs now

adjust to spending or canceled decrease. reduced and to aggressively lowered expenses have variable the discretionary We revenue

or canceled capital have postponed don't Regarding that capital mission-critical we projects we today. consider expenditures,

where we in our of up, the where and proud fall very entire of culture culture people of our and one. Guess? year, never We're brand. a XX we And our the XX present This culture. circumstances team the our XXth giving and crisis, very respond get resilience most, our matter what of and will swiftly to strong up a and proud we are We're if company the but Next founders proud years. one is we times. very our of like unprecedented have times, of anniversary capacity celebrate strong times built over

business our global closing, In and our we that of our the the diversified model of benefits reach, brand. the results strength highlight reported today

to extraordinary the and a of proactive during dedication challenging and management reflect approach Our time. disciplined commitment manage our this team crisis

me details it financial let you Katie With results. pass to more Katie? give the on to that,

Katie Anderson

Thank company earnings Good Carlos. afternoon. is my December. the since you, call joined This first in I

I the about with was As great year too excited you we call. were closing sharing on this our results

you, of about is I tell for and those people team to really Responding and to unprecedented of evolving with this situation, collaboration, a years years inherent of spirit have But here team. culture crisis. takes like urgency unique drive midst to and with organization have get Guess? This culture an deep in normally we an a I What here know extreme fully to integrate experienced understand in the and this be company. win. leadership Now, global the the I'm It here. at circumstances true I to to grateful become is character a weeks to that feel are have It’s pride. the learn me you of with

strength and beat strong cash continued We flow finished a our grow rightsizing earnings Asia Retail quarter. the The levels, we business and with generated our in quarter. a enabled to softness As resulting in in balance and of healthy Carlos Europe offset sheet. inventory expectation, more substantial EPS great fourth Americas than year in fiscal said, us

end of did January. the during towards our as business Coronavirus not impact began fourth the quarter significantly the outbreak

impact significant rapidly cannot and We situation of portion no all closed QX large have results. and will financial have has on the on this then, is are a quarter year will and reasonably full the for supply However, escalated currently we estimate over the have that world our future. XXXX. financial stores since the our doubt our our negative chain and not reason to results in a in for issue fiscal year impact demand, guidance this and It first a the position consumer of

quarter you XXXX. That insight want fiscal said, performed give how into year additional I to fourth the the during still we and some

adjusted today's in earnings Before these of that call found conference reconciliations GAAP please during non-GAAP can we be release. begin, in descriptions our keep are referenced this or measures. and mind comments measures

$XXX revenues X% U.S. of in and dollars in constant quarter million were currency. Fourth X%

revenue business was delivered European driven than the below Our continued Americas our Asia. performance in or more offsetting double-digit our by exceeded top-line in in expectations, met Every guidance. our softness slightly Asia. other declines either growth, and segment Total

up expanded efficiencies year, we $X.X to in XXX and as our billion, Europe. in versus in higher grew initiatives basis chain year and points dollars supply the revenue X% mainly of a Gross benefiting For from logistics prior the currency. IMUs X% constant U.S. for quarter margin result

fourth versus XXX improvement year. last were our quarter operating and Adjusted the above slightly the $XX quarter an end fourth million guidance. prior $XXX earnings from of for year in was high basis XX.X%, million, over up points XX% of operating the Adjusted margin and

XX performance of SG&A basis points, Adjusted percentage sales compensation. based by by primarily increased a driven higher as

adjusted $XX were XX% year prior full and the million increase $XXX For earnings year. operating million, to a

driven was per was quarter earnings. share a a This fourth by XX.X%, last Adjusted Our XX.X% of tax earnings expected mainly statutory represents rate mix of of driven than to diluted the prior EPS from end above tax XX% year, $X.XX, increase adjusted down high by year guidance, lower a our $X.XX. rate. $X.XX

adjusted an and the year. was The of the debt almost XX% -- XX in $X.XX, repurchases share from the full $X.XX EPS increase EPS quarter prior $X.XX increase includes of almost year. convertible accretion transactions the the For and for year adjusted for impacts to

the negative Now, e-commerce quarter constant both let's X% down including in constant Revenue move dollars X% dollars U.S. down to by traffic Comp currency trends. finished sales for starting Retail. our U.S. quarter, with on in with the performance were for line and driven and expectations. currency, segment in Americas

points quarter, by end as of promotional negative basis X.X% retail offset the more increased the IMU improvements deleveraged holiday season were costs. this the than prior Operating XXX for margin at segment year, activity for our was down from and

resulting points revenue. were margin Americas XX% due operating to currency Wholesale. and dollars lower declined year of In and margin on QX, XX% year versus the and to last is higher earnings expansion gross offset to driven full X% in for revenue a the constant Moving higher prior with strong had year, year. dollars in primarily operating This flat in U.S. growth our and earnings U.S. currency, Operating by XXX revenues in expectations. shipments. the X% constant line of growth with by basis timing in segment expenses of This in X%

Turning expectations. and X% our e-commerce, new in had U.S. sales dollars increase currency. in Fourth This was exceptionally to wholesale grew store XX% year. above dollars, and openings and Europe, XX% growth strong including by quarter finishing in U.S. we revenues X% constant driven quarter in in an comps up currency, an positive and revenues, constant

showing Europe momentum the was coming Year. New Our business great in into

as been We margin well up year. improving basis rightsizing in points expansion costs. with over very margin segment operating XXX We've this in saw IMU, prior logistics as significant successful

sales from lower and leverage retail benefited markdowns. We also

the earnings XXX%. year by grew operating For this segment

constant major Moving constant region that points down XX% lower the China, only markets and year. deleverage to Asia negative U.S. same-store for This our in including the including XX% fourth Asia, softness and result U.S. contracted We of and This markdowns Korea higher dollars fell segment e-commerce margin XX% sales IMUs. dollars sales, below XXX quarter quarter by currency. in across partially XX% the offset in down Comps were expectations. was Japan. is our of saw basis in all were and Asia, with the from revenues currency. prior Operating for versus in

our were versus and line with or down improvement US$XX balance from XX% me let an of talk $XXX about We XX% in with prior This year. currency our Inventories in on made million line decrease expectation. position X% flow and Now was cash inventory in million in and and progress year a this year. expectations. our was our sheet. constant ownership We significant a the in clean QX ended

flow million. performance, expenditures prior $XX were free over million inventories a was improvement decrease was by and the in management by capital Total impact cash $XXX better $XXX versus an expenditures, in of European driven for capital million year million in $XX paid of XXXX, the year If last the $XXX we exclude negative the million, Free year. of $XXX million Commission increase fine quarter was versus our This first the of improved and better capital. $XX the cash operating fiscal working year. million

compared cash year During million to purchased fiscal million to ended at We returned repurchases, $XXX We that and year year. the value facilities. we total amounted to the equivalents shareholders, the XX.X to the dividend shares reducing at addition the comfort of capital we through representing undrawn XX%. $XXX strong last access In million of our share in aggregate, by significant while position, outstanding fact the year's cash cash beginning in incremental had shares redeployed to and over our year of $XXX with credit our XX% gained year-end, our over also our million. during

continue course we position navigate We cash our situation. through will of this as to monitor

just been XXX this In over role in I've days. closing,

three in Investor where for December, people As I in, and work a I place things I at I win, I to in main brand can was believe this that you shared Day add a who looking with smart with to want job. the value. wanted during

power demonstrated that a me admire. a more the I've of working team weeks, with I've add them. I certainly work has During this globally. team had few of that the to And I Guess? can value become with of people last brand aware the chance truly to

for be I'm I want to part together. the facing, let this to you very you challenges so and of thank me know welcoming current we're all journey excited despite warmly that

the up company's With and open conclude the I questions. we to your that, call remarks will

Operator

Instructions]. [Operator

question first B. FBR. from Our Anderson Riley comes Susan from

open. is now line Your

Susan Anderson

on the of don't it's know if a there's quarter. Nice you on pattern was during that And the But job kind or opening of that I very more consistent has to that store now I in fluid across closures are saw any and -- know guess kind in the areas? color things situation. you the I curious how give the China up. I'm the impact country impacted can worse evolved

Carlos Alberini

history to very And Yes, today. how tell of a just of this thank This of position course, absolutely situation. little you, bit Susan. you're the right. is in we Yes, a fluid are

that as one is are Just advantage we very that truly company global. we have a

we global started big a very in as saw this soon as have China, it reach. clearly. And We

to Of very we of that a course, of any China. we to out how be this own. rapid about that of globally, but number idea significant That events series is We going very stores. didn't close was XXX have impacted we about had a saw XXX significant

we and didn't not the fraction more is. only The country. very, disciplined. forceful business general and even those very -- only But stop the all stores we fraction down the that in to significant of government of going area a The of we in usually if leading deceleration for resulted a and that shop. because had in be few, in when it some also the And saw in open, saw general to were remained when was course of became communities stores, people region, business, which cities the then, a I areas, decline even than pretty close affected some revenues Wuhan in very what And of in others. the most mean whole was a a significant across being to the traffic. Overall, provinces revenues really people we -- the was much really business were in

We saw not in Macau, severe also trends Hong Kong, in as Taiwan. similar

nothing some of what of versus do. last compared we in weeks are the We that the the business in to certain compared improvement those to of have seen kind that signs terms the trends bottom. improvement only of to But used course, few

lot completely that feel hear a We the hear restaurants -- now but of that the about normal this operating that capacity. great is We thing We full not we too to museums they fear a traffic. that severe. are and subways are that back impacted life. are all more that's have me opening people now much negatively It’s normal how thing is more course that factor was parks, less to way of is opening important begin. to hear I that here the they And are the think business the that, at hit

are comfort People confident they this their as a that control. result, are the acting has And more a conducting under more lives. much in with government lot

saw In with the a somewhat not significant like other governments Korea, saw in a Japan, revenues, but just We markets, way. decline extreme. in Asia, as of in we different pattern. The dealt different definitely situations

in need There think reading been is has very response everybody is I'm a Korea government and this was under we sure saw very they with I report, great swift very example. control. the the China, what was quick situation have very a but from mass. testing being organized. same the well-prepared believe that like effective. and available and much I that were in There lockdown no for a They

experience We see kind today. saw going China to comps we the in way we to started through some I'm and after of deceleration take this all you like what in

in businesses in impact tourism lack of even in thing especially different pretty people think through concerning in closed and when year, comps went in was and that and that the We those just very a into we the deceleration a to Chinese experienced notable. Chinese started that to Year New happened trends business this that the had in Year world. where of Europe impact, had that relative healthy, was very travel other Europe our all February, the saw January. a The the probably we as we we parts the of going in then and sudden, we all decelerated closed the consumer Americas, probably New -- the same So significant in and and parts Americas

news that, the we of on think the that have And for growing this initial also, may fear around factor some well. outbreak local created as keeps consumers

So we business. of a deceleration saw

then very comps In couple Spain, notable. deceleration the in the and Austria, has the saw up to stores Germany, last the countries regions. lockdown and goes of significant the mean country came of France of we we majority issue course, And of of and it on. under Americas And Poland, these the degree Europe first and and and we the weeks, not China, closing of I extending pretty increased part that in further, Northern but in the Then entire Italy that ended then to the in all saw country. list

as it being was the and employees, our citizens operate. then our good And we this important of in to customers, happening, close how continued our We want see we was our to to in -- U.S. aware that being we U.S. the and Canada And minimize on March in becoming more and made stores where traffic Canada. protect until the deceleration exposure, based on and corporate temporarily XXth. to communities, decision based

think a we But we environment, can where doing very And So very we feel we most efforts. situation. can control. difficult volatile that what focusing we are of in today we that our are we operate that's control what to

Susan Anderson

through in operating maybe in improvement I much if was repeatable can fourth [indiscernible], much now. as Obviously, And off to would for guess that of of I the guess saw kind table fourth some that guess about improvement we we in quarter, the this hadn't incident, follow-up be you kind quarter? very quarters? there. I how guess on the that is Europe Thanks. How maybe But much how leveraged had next of you IMU? few I went margin nice talk everything

Katie Anderson

great basis prior year. it it's success in Yes. operating XXX over we was Hi, had margin. Katie. Susan, points Europe, Yeah, so over

was and IMU rightsizing So logistics. that of then most improvement

a fixed those. and continue we know, fix of lot in to the lot we a logistics we of and past issues had in with you As Europe those

in as momentum top-line had sales our some prior markdowns as there lower in year. from the well We also leverage

Carlos Alberini

remember, a markdowns, you with ended big thing had we was a as desirable because, that inventory position. less than the year And

just And also, plan effectively. the to very had our that the at had. some that this avoid took extra extra margin inventory we inventory year level So we did, able time, we And think to really going I impacted we ownership to reduce before. markdowns charges were we position, the we which were any that

we improvement. nice in change a picked margin up So pretty

Operator

from next Janine & Company. Jefferies question comes Our from Stichter

Your is open. line now

Janine Stichter

few the expense Just structure. questions a around

of expense pulling of the your mentioned environment a we're back that you on of we're spending how and And variable on then obviously could Maybe in on is You while? you status an much give a back pull what quite in. magnitude CapEx. Can just same percent potential the question SG&A on -- discretionary sense in reduction? quo of for kind if

some sense projects. we You your year, of us CapEx mentioned then like? on maintenance Thank just How CapEx you. non-critical pulling maybe about be level for give thinking the back should and what

Carlos Alberini

think here. you, just on But look I'm do on Thank then can us to business so learn incredible. lot to escalate China have things the Yes. an quickly. -- going we we're our sure, to I nature, on can all focus we as pretty early about just Janine. what It's and will impacting great fast I'm can of trying slowdown add in The how to and things those into gave of a crisis control. opportunity start Katie, a I mentioned, a that are that this things

to we great have the and quickly, innovative the really slowdown of very in creative came signs lot early very react really a in unfortunately, this when us leadership proactive we the believe That with to and crisis. on with of team China. really So, And other saw very knowledge ways deal enabled regions. I up was that

the a into we the are learning so And way are in we the applying other of regions. managing that and crisis lot

we expenses, to as I I for we people, sure where sure make want asking that we know that priority about has communities most that sure we I'm first The operate. priority just been companies protect to want the our everybody protect we understands, that consider us but them you're top and and make

We have facilitated from working home.

prepared during have my mentioned that banned We I travel, remarks.

just have dealing human closed this is feel primarily that that with. We we And are we crisis stores. a

and The been to priority at. in have protect has this we're reviewing second sheet what of on that to all is and we our And about question been position, costs. our your big financial looking types balance diligent goes

to expenses cases that Of there to traffic a our the variable, lot of that and and looking or course, part the the store somewhat in of coming are to expenses the have anticipating. at are P&L -- structure. And all many trying total seeing cost we expenses we are is that of or been business adjust major those a of rightsize really

in that We And at remodels capital stores also projects expenses. that P&L can plan many or represent are are cancel or postpone, office or areas new and reschedule we we at cost that on number structure. looking our either then that just sizable eliminate That's back capital, relatively we even projects are that looking completely. either think inside or

our we where inventory buys. area are trying time big Another is and into spending to looking

As -- fashion business. a we're you know, inventories in

having is of control inventory good very So, important.

can So, and is are channels, thing future. that the where what way do with have to we the we we good several have very we synergistic in inventories plan here in a that's inventory we use trying because

may flexibility we're We many and buying we the works. course in also And have in have, out. already cancel anticipated things that of be six to to months nine cases, cuts

time of lot on a spent So, that.

is about of And we those stores of -- operate there have a big then, just X,XXX worldwide, we X,XXX directly. course

And critical. portfolio super so, store at looking is the

We fortunate are here. somewhat

of the of think XX% is during and leases stores that we've during U.S. renewal have have roughly leases In that Day Europe become XX% I are reviewed and in like next number pretty lot three years China two-thirds that we time. But on within and that Canada different within we the that the the the about regions. three in the years, about two a with or numbers you renewal next depending become Investor big.

locations. see just based business have terminate for a So, those of leases on flexibility renegotiating to terms of the we either looking or here we at that lot each those potential just

and intend terms. delivered with believe renegotiate. if is our underperforming conditions gives We If be deliver to we of as that a business way we that impaired, the opportunity. better being a it see are positive course responsibility consumers to close and in as and able conduct environments an this to to spaces not course stores have that to customers, landlords us of us use and for opportunity that So, to negotiate and flexibility situation

have used landlords. approach have and We been this in type successful relatively the China with of with negotiations we

So just proportions. I be in look to conclude, that me have to this successful be of and to are using here are you is people fighting threat are term big But winning at think But is And that strongly when to This and the fighting, and between that passionate. war believe one good is way I enemy”. there I you you back, “invisible a crisis to I and think that to the what major will this is and have that's is society that exactly care losing takeaway that and that it think are is. people have the have that war. the we're about we really difference approaching that everybody is this. people order we

and I in their with and we They is but Paul we winning this is has well. are away is same why with plans those the and we been I executing planning, call believe and so believe vision incredible governments. that a the during is this And Korea. leadership plan effectively. of We leadership And crisis strongly he prepared strategy South were been with a he this very ideas, strong They this He good within right not very they team. have I in and with strategy developed the think us. exactly China have and set Marciano, clear had testing extraordinary execution. incredible time and and preparedness war, adjusting leadership, have executing starting

addition, mentioned, other over been this And tone star, followed did countries which our the have and there in has Korea. the world China, we the same model, for phenomenal. all We leader in teams and I the our is set in South regions. a In

to team in also in Los really We our in been has European us great are helping tirelessly but in And in our and very team these tremendous strong and also. Europe working countries, key very well. been leaders this. Fabrice are all has Angeles headquarters, executing

just of in course middle are plans of plans, are minute. We those changing the the developing and by

And to give I been this Katie, fight, comment about weeks in a welcomed want very being she big her because too, being credit, has instrumental made she a a here. here. in and only few

-- last, say that want to just I communication. about is So this also and to me

have communicating, each have I videos. We learning and Both and non-stop. other's Paul each other ideas, doing supporting been from been

we writing We members inspired with e-mails which have control on think that been control. connecting priorities, focused the to connected, and really our is entire and everything personally organization can the team to can I do keep right to continue we what

team. this something, to I'm with war, going you going tell if me let I'm So

think time, hopefully to see I'm in And but that history. a will that happen this hopeful we're soon. very it's difficult I going very

Katie Anderson

provide looking at this, fixed, corporate to consulting with not meetings. us what business like situation can’t do much and marketing. in we're would We're can costs that It's looking expenses, maybe costs. to as environment situation. landlords the rent. at that. have fixed said, looking at your an and will to SG&A the And about We're given Carlos Carlos SG&A I as at are going we we in hard back how supply talk looking mentioned distribution chain estimate to back a everything. even go Janine If And -- normally we're you And to well. go adjust can We're consider exactly

the seriously but CapEx and we everything to table CapEx is And same, So on of this protect we're considering at everything small, this point. long-term pretty and want is to is taking try G&A we're to the our company. reduce our maintenance the very

Operator

Kernan Our John & from question Cowen next comes from Company.

Your is now line open.

John Kernan

competitors about a think How the think clear just channel of summer ability the be stores in this? buying less the modeling how obviously any your lot detail do back I the retail and also of people and think spring you. the margin on within gross getting to of situation, when Just your going of the into going own be and channel? on to across a concerned also to what's things throughout do among inventory towards the There's even partners? So wholesale that's normalize. to inventory go to are structure we markdown And to lot ecosystem. going and lower levels Thank inventory about

Carlos Alberini

Thank you, John, yes.

me the third the with know, we about you inventory down to to ended did in And very really we I inventories because X%. the to as great we were that hard start we quarter inventories that were in with let business the a worked had frankly, able hoping time, did represented job. year-end, at a last million, inventories. double-digits. just reduction with closed We So down And grown. the tear going so with we year be with And -- the $XX team XX%, down think close slight year up inventories

And year you're inventory we asking. is So, to a with I this fortunate to about with very clean that. but could the to felt a this because come, is known respect good was critical think event, position this going have super question start

careful on that that like we are at be are should mentioned I we that not be think is would or not if before, delivered doing very time see just taking orders what today, ownership taken. we very, being So, things don't our looking the we with

months. next have demand. inventory development be the the releases into the then then really opportunities of -- pressure help it should during supposed But to the all light in situation inventory coming that is cycle now alleviate to weeks the future, so to move and us from we the So that decelerating

that And that of things big are doing. one is the we

month put develop going of open of weeks on every really moving And under addition to that, that like our be the the this, what because mean, a are reducing programs. a is are that think we day. to And we impact the looking though a assortments in based of developed that this later, the very something carrying and in could creates the we this few dollars fluid something circumstances. best quantities way June inventory to process. normal month think may we So -- limit buy be were and we the like are we that, now I to less within is single also risk at

is think that as strong are because we of all could way at a -- all clients just potential trying especially approaching going without is their excess And and the -- anticipate inventory have obviously we not those service end. a you backlog. growing. business business. Europe get okay, in very wholesale have it. trying a And we're we business how So impacted has just creating looking that on so we very we also our this, kind The anticipate, end to that we to a know, to by business retail again, or also only we're just on It's wholesale like have now significant, that's been

John Kernan

the some liquidity the own business your months almost that? to liquidity confidence e-commerce liquidity no see regions? What valuations partners. in is there’s of where Like get of your partners How you concerns, we with and is with your it in much long the and and wholesale the no back still done Just your can what markets are? all withstand wholesale North situation three in questions you to and industry revenue of the withstand can that say can but some obviously in the America to there's that in stores Europe? revenue position? gives Obviously Could

well. So, just helpful as the liquidity what everyone going on investors forward, be the call level I confidence think and on to would and

Katie Anderson

John. Yes, thanks,

tell what Here's can I you.

the year measure, precautionary then with of access the $XXX since just circumstances. cash drawn given a as $XXX that million down And and in over borrowings. over actually have million of ended we we to available So million $XXX

we bank. lot a the a in bank, or money of have have the in money decent we So

On the cost. expenses, side, expense managing much we as mentioned aggressively we're as really controlling can, capital, we cutting

in companies we're by saw postponed the declare you impacted are and even release, As is decision table, a to considering helping funding this dividend. -- crisis. government everything advantage the of programs the we on And that press taking

it's us we So reacting temporary, This fluid our we it looking serious. we're hope liquidity. everything you situation, we're and assure at but is swiftly appropriately I help very consider to manage a and

Carlos Alberini

I insurance in that, them. receivables that have I many wholesale cases, add our you about to And would behind those mean asked accounts.

to level value a with certain we of security of terms watching we We is accounts. feel each tremendously. are in going what one and So, also, But do owed, are there be that of what there. we every we those just them

to that kind same programs will have access as that the governmental Just of they we may have, well.

And so, by the these way. are becoming very prominent

take going obviously those we and look that would But and feel I this we each taking at very are please how manage. that. are not every say be relationships So mean with lightly to one of careful we -- we don't I and

I'd everybody I and that normalcy, is going to opportunity of the life crisis a more length the China is normal. to then just which And thing to that is I back we China to control put about is if people for like shorter, normal front going life to many of to like the that to example, okay, an going customer go the -- the we routine, able have countries back normal start because if think believe into so what significantly a for really feeling back same. will people most there was us. just that think in And just need start to are that the to country key thinking, this here be do with back happens,

back go life. can I live used Now, to way to I my the

realistic on weeks. hopeful what think have based is few our So, we expectation it the in that's hope. a this that in that next is we China, experiencing thinking Obviously,

at can flexibility and any financial everything here we And standpoint look have we've when definitely just are our we exposure a you to from -- doing ample just position, or really Katie reduce risk. like said,

Operator

Telsey Dana Telsey from from comes question Advisory next Group. Our

now is line Your open.

Dana Telsay

Hi, Katie. Hi, Carlos.

occupancy would think these through about managing it? reduce even bigger how also even times, this year do you're more mind? in the And be Is fleet where's a more see going -- your ago, so we're you tight more opportunity payroll, being imaginable them, opportunity reduce and is to there to opportunity? an occupancy As that how to opportunity important, payroll and store not reduce with SG&A you occupancy, to further the optimize

Carlos Alberini

Yes.

not with discriminating are all. have here start to I'll at we I say, Dana, So, that.

two at and you single structure, payroll mentioned piece those both looking occupancy. buckets that us, are every huge are expense the We for of and

can. and everything as we So, we trying are at minimize as to looking much

figure think also this an just to to We be how out that efficiently too. may opportunity do things more

challenge we So, we really I at the more that do decision that have, we store everything mentioned, and ourselves here. deterioration as on with and even stores great to there were portfolio, a see no have, With marginal but really we this every think on traffic looking maybe now marginal. is than respect this to that unturned we are are that leaving opportunity leases before consumer I in are stone

definitely sure we -- those as don't then locations everyone to that this will retail. in well. is obviously, decision take So close then the and that this is hesitate And I'm impacting

So open going I'm if to are. terms, different are we like provide want healthy sure a to landlords tenant be that to more really they keep

others we two at many in of huge But but are be done every that and we are is are working a us. think there opportunities, and here front those of to work too. diligently looking So opportunity there lot

and we every organization single and over and have stop this So looking all headquarters every the have and -- groups the by locations We're and way. in at business different world. we And are complex have line many and a U.S. the doesn't single every we so at we in forth. item single operation looking

Operator

question Research next from JJK Associates. comes from Our Janet Kloppenburg

now line open. Your is

Janet Kloppenburg

some quarter which popularity if there, just nice I a channel, difficult was it's Asia to outlook that capacity licensing your any fourth know ask far wondered experiencing goes, was but you've a and disappointing? you could because China. you how talk given revenues, is as your for Maybe disappointing disruptions address to about getting Carlos quarter, wanted Obviously, that business is And much maybe digital quarter, if now? to are encouraging? we and in hearing a I'm the given brand And a you of better. And which you companies in just talk the wondering I as was thought little side, Europe numbers indicated in there question, back are I that year why transferring could China. boon, as if the it could right you digital Thank was the you. to what I and also a foresee see I your just the you not fourth China normal wondering, there, on business bit fulfillment about that. the had

Carlos Alberini

the so, you our Well, fourth were right. China, disappointed are starting Janet. with in you, performance absolutely Thank quarter. We with

we the back of when guided didn't make fact tough at had where that in we for guidance end and the was -- numbers the our a And -- fourth Just that quarter business we we the the fourth only third as quarter. quarter. in

driven I think a by of lot was our own of issues. some it

we with we that that thought like even just an had the we with when product discussed more third and kind opportunity have quarter when think this with direction that I we products. the numbers before lot design we surgical being of fit especially we a worked together and released and

in the So fourth us quarter. impacted thing the same

to part I continue think because to that with I think the of use demand was we frankly, that had then our excess started excess buying am we inventory, And them the year some in year those tried to issue feed in last some customer that too -- designs and probably seen in year of The and of the somewhat about cases, throughout that already year the I were a interested better place. lot was not talking them. that dated.

to Double the And disappointing, the of initial XX business were a our much business which Double was but quarter fourth Tmall XX that driver of as better, result XX So had relative tough online also we our Then us. year some did impacted things with Double before, things both we somewhat more. disappointing and a and a in expectations. had XX some Double been still we all big learned

in correct. a continue of think But you mean, -- terms very let very to that are going want things are to even normal. from couldn't Hopefully, now. we very, begin things maybe I I to to again difficult seeing to the about alone going situation now. months I In to outlook right others back next it’s it’s say. And to say month, tell three what completely strange are

are very far us from they normal. yet than I ago, five that make far being I to from just think that sure but I weeks just very everybody want understands being normal. for mean, better

So back think business a we don't healthy are to now all. that there at

And because have total the With a very, year respect I One just, overall -- fragrance, -- mean, new this lot it couple impacted And a because of have a licenses business, performed licensing, about done we up to really quarter. we licensing. in fourth really our very was was new well. X% happy, that well we lately. of were were it think business I is

we respect And to then digital, about with to be continue super this. excited

others which lot the did products especially continue implementation not salesforce have we the big very to a we business, but a grow underdeveloped Just industry. because cut really is compared the of see our opportunity, ones to e-commerce happening that is -- to we with did what's in

a impacting e-commerce there So, the we Obviously, eventually business. think customer help things that big the opportunity. is that are should behavior all

business was channels, dramatic as nearly not yet. with we severe in but digital stores a mean, and increase. definitely the what that seen are as our significant not haven't We I seeing saw we in deceleration

promising this and hope that full we But take expect advantage continues that we a more lot of opportunity. business over be time, to to

see to continue that. we So

with think you. shared we I some numbers

e-commerce can this the changes I we like we XX% very business total think business demand. in talk before represents only And that about consumer see of and is penetration our the doubling easily.

Janet Kloppenburg

try wholesale the their at inventory orders, there risk wondering reduce visibility on Europe could you. have clearly America in talk was degree flows? to you Thank forward of about and you what your if I and wholesalers your

Carlos Alberini

start. I'll is This kind Yes, early. so of

we see for indicator you, -- happens the But happens advantage and in a we what over what even are And follow to for closed obviously mean speculating because retail. honest have so, with have will I I be best we normally can for it's completely been retail early wholesale us. happen. a retail, leading is at literally obviously what closed think week. could to that that we business right? mean us I start

so our our definitely impact that -- customers is going So, clients, their to business.

we I up incredible. double-digits was backlog our before, mean mentioned I As were again.

been has incredible over after the season. is over game many season now an years But this this after business with Just season ways. three in

set back We paradigm. of different a to complete our are going

the to us So, that a very first guidance have didn't why be year. even attempt this we full think you for we And I we quarter will it provide to -- today both give impossible think will to for think give a differently. partly and be on to number position for in the

Katie Anderson

And Carlos good in going we -- insurance coverage of mentioned, have have AR, good forward. we terms

So, we gain comfort in that as well.

Janet Kloppenburg

following little looks And about assistance the that there that about stimulus assistance. closely. firm talked been a I've Katie, like there government you you what though? talking bit just pretty some or from are into, be you programs it Are to out would able tap

Katie Anderson

some programs we're already out advantage are kind world. there real coming of -- But we’re these following taking of. Europe are We're taking for the already example in across time. Well, that

we're over and we when making we sure can take it can. So all advantage that

Carlos Alberini

absorbed It this be some And forth. social the could China forms taxes. have deferral we flavors. And could well. had opportunities elimination It the may could government some of could be different and in different that in in come by of cause be so may as have a a cases, It be benefit and taxes.

Operator

from Saad Evercore next our from And Instructions]. Omar [Operator question comes ISI.

open. Your line is now

Omar Saad

might back the be And China, saw in about a talk maybe, getting decline -- some obviously that to sounds curve contrast a you rationale been be seen of but normal. anywhere to best and about Kind there's try if the guess markets and kind Can parts to in to in other then And we're you’ve return or aren't now or X or contrast uptick do you towards a then -- other whether any last. and it seen weeks compare of there, kind be there more little can we've to and kind you that they may of triangulating in, things near this talk normal like stabilization? compare we what seem similar long as occur Italy, following formulating how our Japan X Korea I of to of for it's America, China job North helpful. Thanks. Europe, do curve?

Carlos Alberini

of until an and kind knew extreme just Yes. able tell a how quickly this stopped, moving case we Thank what Well, me the in. you, a nobody of thing. we government was the the somewhat knew been China, I jumped all terms see. but have in And also Omar. country of of anything In it’s is here, target you sudden to think of let

process, homes. then in closing in So things saw very, we of the we -- stores very revenues, that our young a just most during the first drop of and just people few their extreme were were weeks

the all street, end. So there I'm all no we right? sure on saw on our those the pictures I what saw Shanghai exactly we So of that videos activity. was with is commercial mean nobody activities on and

Then point, cases, became -- are at some okay, cases. now people kind China slow more the of like, down, new

of more Just and for crisis they remember that an Year, going their to Year. the there consider this New the government felt to that they opportunity Chinese cities, people New was back were Chinese the in extended then was control really

been we did the get has until that in it of couldn't seeing could and people to revitalization they those but slow. they So when think started markets, that to just even of happening, work way. And a those then orderly travel cities that I very back But started cities. a lot

an I examples maybe that. but so, somewhat extreme like that is case, And some think are that, other there

country I not nearly our think engine. Italy that. not customer look where Japan. definitely as and the the they an a stopped. still stopped Definitely, that severe. severe. say would of the maybe like country I But was both then it’s the I whole traffic -- as I Korea saw cases into deceleration and and and example situation -- Just numbers mentioned of like impact very have Italy in we went similar could close half did know before, don't you this In

we and -- in So to similar pattern. continue that see something

to going difficult we thing other just I very -- and is is it's the to to that is to the key that think situation, because the have apply Italy the model it's homes, exposure And contagion may And countries people and deal interacting. way So then France. difficult U.S. see. good The and people say, is from mean to model that is this in one stop one very to of this going that lot in this route. to Europe, minimized. be know keeping with taken their we a this pick for applied that, risk a now very the so example, of oh, to

I that I and -- it applying everybody to that that, aware So the is in America well. think now doing think as and and world is they're that of

Omar Saad

around? you the spending about a come consumers period? may off? or be Did a not in same the little bit role through big or that store probably it Maybe these before scenario about of played and fall of you declines, been this did the back? markets the of Can us using haven’t e-commerce e-commerce given -- level China came Has talk some but see back help may how think some seen

Carlos Alberini

Yes, no, also deceleration that the everywhere. noticeable I in e-commerce was think

So for home shopping it's go that people they jeans. start not and and handbags

the that So we I board. like that of have and -- kind across think seen

being and Alibaba connections like with other the mentioned we than for the basic You big items. we board, companies that China, like of some have of good and business share kind across essentials,

on some continue severe. of business, not see off type -- nearly we as to We and since then,

had what our than in You some business down. business a is take countries healthier where just like we locked much of of a region still to like be saw the Europe, things kind

you So, about just never And overall, e-com, since Janet’s significant. we realized less of an I impact answered disruption facility. in but question very the that mentioned

has fully. business our serviced far so So, been

making all our And in time. Italy that in We course, well. we has a facility business. we service can operational of been we worked has that the services e-commerce have the Europe and that that customers a And that are expect for within business that our it for guidelines priority

And the dealing but our of any the in business servicing to here business Now disruption able suffered to not more well. being in expect. Canada type and as still we U.S. with are as that skeleton would service has team business with respect we a of

Operator

And would at no this And to we have over the Carlos questions to call closing I for like comments. time. turn further back

Carlos Alberini

and our special for we to thank Yes, this call. you really thank our to want just join interest It's view. your time all in on you. points appreciate time I very again and story us taking of a

will this continue and to our We with lead commitment relentless determination. a through organization challenging time

that. this You on that have we'll our promise see confident We're through. very

think company, and are with to good position have are the we resources this a of win the a in We I experience passion a and as in team kind and necessary great challenging the that time.

hope will this we crisis Thank forward to history And So look our be we much. it you you before. said keeping about progress. so I informed soon,

Operator

Thank you, gentlemen. concludes conference for and you ladies call. This Thank participation. your today's

You may now disconnect.

Guess' (GES) 18 Mar 202020 Q4 Earnings call transcript