GES - Earnings call transcript Q3 2021

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Operator

Good day, everyone, and welcome to the Guess? Third Quarter Fiscal 2021 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 impacts from the coronavirus pandemic. 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. Comments will also reference certain non-GAAP or adjusted measures. of can descriptions today's found and release. earnings reconciliations the be measures in GAAP

like the to Carlos. would I Now, turn call to over

Carlos Alberini

Thank and us afternoon you, all operator, joining for thank today. you good

communities safe priority. of First, I current At customers our make can teams, we Guess?, the healthy we the light to what and of our challenges. control and we continue control, hope highest the in health serve, all our you're to and and well-being

we execution, report win have of able with clear continues good our the are every careful and Fortunately, This Marathon. adapt, decision and a every I'm turn. now At exhibited to has and our multiple ability protect sprint these pleased is by to that environment. in fast continues effectively. waves at resilience, making places, to that to been us one crisis people team it with we like this planning proving to team test these and times to all running are trades excel critical strong very in not the our execution second

sheet margins We controlling managing our every member optimizing customers continue our team. on well; and stay structure behalf tightly; inventories want to our cost of On to thank focused servicing and balance Paul I liquidity. and myself, of our

elongated we revenues. versus strategy highlight noting comment profit revenues the for pleased strategic X% window our period. environment, on an line, the year. line. was for that delivered us development planning driven top when we period. an I adjusted touch represented report Total basis winter our revenues In enable will than the represents good on operating the $X.XX fall margin adjusted will proud. for X.X%, are decrease of results where most achieved shipping Europe very year. approaching a increased reporting adjusted that be I'm you last we very business quarter the XXX margin now season in deliver versus I very and points profit and million a wholesale which of significant to operating very most increased accomplishments and earnings a Europe, XX% line expansion doing earnings in increased exceeded to Europe few the for We business season. pre-spring-summer very proved are holiday bottom basis and $XX in businesses. worth In the strong make job third operating period. our more a minutes great a doubled quarter, our quarter had and After our share operating per we process You $X.XX on and delivered a and I margin last XXX we of a key how spend expectations selling and increase will exceeded third points for we which then a performance great that $XX the QX healthy our strong period on revenue the achieved of benefited of of the solid in revenues delivering about a gross expansion canceled for million. This the margin expansion It's The and challenging by improvement from we

for categories As represent of women's on men's. that the product key we foundation to business continue and focus our

product optimize and channel with assortments in our We and presentation online. by to progress are our pleased stores

levels. below our well period overall quarter essentials, and balance inventories last During We and outperform shoes $XXX million and the managed ended accessories business. with the cash and denim, sheet equivalents wear, XX% active year's the of

globe. are we believe preparedness marketing our plans product; teams into holiday well we the positioned the and our our season, look that across As we with

our in those higher has you stores continues then now financial by coming consistently customers intention we mandated into high our especially businesses. stores retail, That periods and give me into like and experiencing Canada, during Temporary impact higher traffic of and traffic this a to shutdowns also traditionally purchase pandemic, have business impacting the to Black we resulted are rates. significant challenged Europe with factor. Katie of conversion customer are in each Let some have Starting several quantify Friday. be markets, color the will the what said government in where especially

offsetting business e-commerce our negative that see to pleased partially trends. store the is are We accelerating,

the pre-spring-summer as our versus the business a we will one of mentioned, Regarding to percentage that This smaller development fourth to collection occurring to past. spring-summer quarter, of made consolidate the development products compared wholesale Europe, into main shipments in the change decision result year. that in line the I in main of the of collection in the cancel last two

which great of majority QX with in a those getting the that many shipments customers their their base. price concentrating wholesale the Europe. delivered slightly below highly we were wholesale With that momentum spring-summer we brands the are and year. combined fewer, share the reliable within enjoying across clearly the This one bigger our preferred the recently closed our in be is of and our two next results campaign, expectations previous customers of are of with completed brand the brands; this, are to orders collections stronger, sales of connection demonstrate year. that only I we In so exceeded believe

our our business to inventories demand expenses expected and on plan and accordingly. based size, continue We

marketplace our in in have been remains product promotional confident are and moderate. We pleased ownership the that and our see activity to of assortments the level

previous our will in our later we event an said plan at a updating and we date. schedule plan of business to call, our process strategic share the in we are As

we basis today points operating just confirm still believe me Let XXX expand to that still that the opportunities we margins are by intact. had identified

now the accelerate about centricity of initiative the brand, our I I making key on elevation are that to strategy. change. our to product a brand XXX initiatives be are speak continues of starts we will global have with organizational always countries. and on the jewelry. men's customer crisis Elevating products across you Having lingerie, I thrilled kids product for all some line by chain. at of a specifically report nearly offering footwear, am a supply all all presence been significantly apparel, you one per of including and that of perception each customers' global and past is very markets in Guess? leisure, the accessories throughout product; For men's reaches global line to that now, product reduce in how line our king; our of our when has progress including our now our have one update all we we development and women's us time one represented the first women's our and our goal across across ambitious were development enable will categories; all business and leveraging line handbags, costs the consistent for markets to and region for represent consistently Hundreds starts common MARCIANO in markets. which ever, brand developed and will season,

pre-fall/winter of choices colors a apparel a represented after with that for new the Just is Guess? product and per of line as reduction multiple XX% an example, development for offering expanding season this X% increase style resulted for in online. the stall, the e-commerce next

In have fabrics courage teamwork and solidly reviewed happen. challenge with DNA, deliver our Paul with did perceived products. and starts achieve regions think stalling the we materials; a great It of of make markets to Today, brand to make that every line view fit; vision, this price. this, tremendous speaks the strong our value of I all do. offering Guess? To the an this, a a and [ph] accomplish marketplace. the of alignment, commitment that order point incredible a Guess? larger on we to of we This DNA the grounded quality differentiation to strong that raise full the in genders and effectively. serve quality and sustainability in product and took and quality of a product, product global strong between job in to consistent audience line can everything the elevate all teams styling, commitment takes the

tremendous that the believe gains. We have share profitable I will to contribute value item. quality market each customers products strategy of offering beautiful product strongly our and our for price

make We our progress to great with goals. sustainability continue

recently be recognized News to the were winner iconic brands PR alongside named fact Guess? best In for PepsiCo honored We XXXX. and sustainability like Report Johnson. global CSR & Johnson

quality year stores, our months. stores Our of of customer the has a now Italy we weeks stores digital last when commitment The other ago. walk to merchandising stark stores and The was elevate contrast in with visited to the marketing feeling you just media overall I the our focus in been the we in visual assortments a experience very impacting what had experience. experience also completely you campaigns. boutique represent a impressed including I and is transformed few eight business; areas presentation ago, in websites, everything the do that into

reduced have to the product, emphasis easy a or in the the is shop the to on provide stores environment not sophisticated price on shines discounts. with product the and the shelves density product more we for presentation, placed very As the in, on

engage in expansion to summer the for in our brand. with customer with focus, to As about and omnichannel of planned SKU XX% shop we stores of the customer SKU X%. of run example Europe, an and We an planned chooses business next an reduction online regardless where then

goal online, Americas assortment store today from year. available inventory in and is from such and our buying Europe ship assortment implemented larger These and be entire warehouse. e-commerce fully store will buy online Our next with ownership capabilities; to our the leverage in the capabilities or as omnichannel are from ship

centricity, is which Next customer about last our introduced we year. initiative

accelerate have pandemic since our been you hard of As to began, implementation know the working plan. we the

We have except Canada Russia, Europe February. which the completed next over implementation report platform scheduled we that salesforce to of and the the US in are for for all is pleased and

conversion it the are the overall platform business. and improved are growth of will and it performance pleased confident contribute speed engagement to We significant enables better customer with very of significantly a experience, faster and digital and our and

suite progress XXX salesforce This project. We developed is data optimize and with also journey made capture, personalized customer integrated and analysis. significant been an Customer by results to also marketing has tool engagement, our

plan on of to the We part and by the are solutions, the which We next solution we social end service customer studio XXX cloud have full marketing implemented and of working the of complete already implementation are the Customer year. obligation. currently the suite

to accountabilities. across organizational our plan and every to development operation. third do lot with strategy. organization, leveraging global to technology a optimize more performance our of redundancies The We area management We'll eliminating global be initiative relates less in our

to effectively this complete XX since this has closing, challenges the is company by In the goal the adapted well. and history, as its year customer business has the project to very company preferences. environment Guess? evolved next new implementation of ago, again. today entire and I I of come. forward successfully to Throughout the by time our Our started end business years we presented to opportunity that market, With the always team with the Katie. time accomplish earnings of company let that believe another I pass it this our me presents yet and believe growth and to to the power. transform years have increase strongly our look to that, also its

Katie Anderson

you, everyone. Thank Good Carlos. afternoon,

So demonstrate Guess?, very margins for my challenging capital. significantly the follow. results of working going I year I our delivered to our to planning have and we Today, which operating did of that the year anniversary that and in sequential I one-year we today am our presenting inventory substantial is managed were solid very plan believe report ago and improvement we expectations, were expanded a know proud would the power exceeding you, strategic then third environment, the exactly a midst tightly to little In business quarter, execution. sales, agile at

and the we extremely our year. evidence able that adjust liquidity which faced this when far spending to in throughout while have that to given our position, partially especially the are so demand We strong as that the maintaining and as to to company, offset our fuel capital experienced But been we've the importantly has with cut This what is cost is the knowing structure is where happy circumstances extraordinary pandemic. in knowing and invest profitability. growth future industry liquidity deceleration

And support cost support our We in efforts shareholders. and to return savings. omnichannel to to to as continue well investments digital continue our long-term value as we initiatives,

has Board the cash of the dividend Our this quarter. again approved payment

strategy allocation we said, I long-term changed. time As last spoke, capital our has not

Now, the take through on me details you for our performance let quarter. some the of

Let's start with sales.

Europe, in improvement currency year. million, was in Third our versus US revenues X% dollars versus quarter was currency. wholesale biggest driver in The $XXX were in and down constant which in quarter last last XX% XX% constant up

the XX% line, comps season were by down a higher the significantly In the experiencing and a result with development currency, with sales were in we momentum Store Europe constant which currency, the showed US in and strong last strengthening As and shutdowns, the in recovery. constant currency in continue of quarter. of as store Carlos second in momentum revenues by globe, in traffic higher have quarter traffic Canada retail down to pre-spring/summer tourist-centric Asia line canceled pandemic. in XX% quarter this XX% fall/winter both tempered US as softening the resulted declines our by an Europe improvement week QX shipping partially Korea. versus due Store year. this to the elongated Asia, and comps stores Canada, last comps window we in tougher in were China due in mentioned, we was by of the Across in see offset down store to was wave in constant declines, driven pandemic. of the conversion offset the in the

Our for quarter, XX% up up the business in Europe. in driven Europe X% by momentum America from QX, improvement in was e-commerce and North an

still Americas improved quarter. QX, than each XX% under business quarter down Our revenues currency, basis points XXX improving XX% year. Licensing was QX. wholesale was the also demand, in from higher deceleration prior versus constant Gross the in but for margin XX.X%, in pressure down

this as by promotions. higher result points mix as Occupancy business quarter, as a decreased Our XXX lower a of rate well product margin and as basis points IMU, of result XXX rent increased basis relief. primarily

booked rent million credits we quarter Europe. fully $X relief roughly for This in rent mostly negotiated deals, in

and landlords negotiations prior $XXX realize credits $XX our the with SG&A million. to quarter compared $XXX of finalized was the and decrease signed. as we'll the additional in discussions year, continue for any million We a million, Adjusted are

corporate from reductions at fees. labor-staffing travel the We our store continue to headcount benefit changes expense structure professional and lower streamline level, to hourly particularly more and

period million, In addition, but the was subsidies Adjusted and by a versus of variable profit last there $XX decreased were for costs quarter government some million. wholesale with $XX the operating third in last than associated XXX% the operating from year shipments. one-time profit benefits year, were offset in advertising QX higher these more

in US the We ended XX% versus expenditures down and third million, million, capital million from year $XXX for year. landlords nine mix quarter versus with we expenditures, our statutory negotiations. million year. vendors XX% third of were an finalize last the XX%, last nine $XX driven Our from with were year the of first in what $XXX increase dollars than was for quarter earnings. an had year unpaid we of cash million and adjusted in flow $XXX to currency last capacity. $XXX year, Capital year, tax same $XX million Inventories rate of in down the the $XX incremental spent in borrowing outflow months of $XXX prior significantly prior by while constant XX% payment of the extended rent million, the we period Free cash This lower the and an lower first an benefited year. the inflow million months versus we of terms was in

year's European outflow of last million payment fine. the addition, $XX included Commission non-recurring In the

not are formal going of continued environment, guidance. the to level in current we uncertainty the Given provide

thinking the me let how walk However, are through about you we quarter. fourth

fourth down We year. to the be to revenues quarter prior expect in mid-XXs low to

mentioned, main As driving there are decrease. factors three Carlos this

to continued worldwide, pressure our this persist we the customer momentum expect the partially store time, business in offset As At traffic impact same decline. will negatively the e-commerce sales. on the pandemic

represent trends the fourth two of in to decline the these approximately half of effect net revenue the expect quarter. We

mandated shipments in the are Europe as are spring/summer over coming the closures, temporary closed, Well, some quarter expected impacted we the represent businesses and reopened had days. these being quarter year. closures of of Canada revenue of Our by height permanent is in the decline. The of decrease for the of the currently Europe These government openings of a wholesale in store XXX into last further we next the than in half and closures. more collection a at shift have expect well to result stores November, closures as

in improvement expected terms down quarter margin fourth of IMU on be lower gross year, is offset expected to profit, is the be slightly In deleverage as than more sales. to last to by

continues sales we year. Given the delever this our the as as closing, with level mix, of of as a points expect well I crisis. how versus percent the of expected prior revenue, am company our the approximately seasonality by XXX In to very basis business, pleased to navigate SG&A

that relevant resilient. and is have We our proven brand

the to linear fluid growth while situation. showcase our continue be through to questions. realize uncertainty ever are And our let's the we in next that around team's long-term strategic With manage that, remarks given the your as for and business not few the to up We the ability we open call over months the conclude initiatives. global company's a may will path health I our crisis, confident very as

Operator

you. Thank

begin Instructions] We Our question-and-answer session. comes now Riley FBR. question [Operator from from first Susan the B. will Anderson

is now open. line Your

Susan Anderson

Hi, Nice managing evening. good [indiscernible] the quarter tough environment. job Hi, through Carlos.

Carlos Alberini

Susan. you. Thank Hi,

Susan Anderson

Friday stores? the shutdowns could there. you slowed, if over could saw Black you color week I November. kind from And you the wondering, October Sure. online in both sounds give just, of, maybe to then I that any color what in saw? saw maybe the because definitely mean, trend of also give on and like Americas, But some you Europe was you the

Carlos Alberini

Yes.

definitely. no, -- I significant the a of think in -- time we middle -- very are is us. this It's for very,

have Europe of and well. this front in in is us Americas both also biggest weeks important in as several have where we and we and true then know, volumes you the As curious

XX%. with are as In down the strong very, saw better the in still we into what comps, business for the was in than we to comps the than XX% we saw sometimes October down and in saw Europe was very pretty comps down had for QX. experienced Americas, pandemic. when QX. even that in that traffic increase was where that consistent result had what we better we of a that we were XX% correcting much were, decline But we challenge -- QX business seen decline was QX felt in that Asia, course from the had the an XX% in was going opportunity we And then, were So

Going worked, more Thanksgiving had to mean, a and very we customers in. to numbers? into I into challenging. And in with November then the first month do to we you a as may had start the things and holiday some had tried remember with lot Katie, be aggressive very more very and November lot that all end the invite in the of and closures, trying selling then challenging -- and season talk marketing was Thanksgiving of weeks strong front Thanksgiving you the in was we changed, extend plan the to Friday Thanksgiving visual good Black a hours or shorter of all, want well, about good leading and with

Susan Anderson

sure. Yes,

these is, period, were come little know, steady, a better -- doing Susan, in bit than we as except we we're about we tracking for it's pretty high-volume QX super days. what and were the into I'll Canada first, of US the were, this you XX%, and So, talk really, kind of, high-volume seeing we

then in down, So we're traffic they're also think is is is, pandemic, a you know, consumer in the they that acting, would crowds. but which as would meaningfully avoiding general seeing you

that. and seeing days these were broke after than we example, super like things we were for before. the Friday high-volume in softer trend Saturday the That's Black where So or

until holiday is is, So, saw or week the but -- Their when of, little these last -- kind breaking season quarter the until we week trend. that's the of we, the Europe of, shutdowns. steady sorry in same have more we the leveled, where last days going we're in the kind still But into October into on Europe November had there. busy

Carlos Alberini

acceleration we opportunity. finished acceleration for from the a a both those we improvement this, we see frankly with in and about the third that this very very was time mind, and had in X.X started quarter saw from And went and the of in incredible just about we we that the And are we homepage by project did for and on that were project, the add primarily entire a know, I we time that's keep we that was our business in levels on goal are November, a that and of regions. job phenomenal mortar good we the second thing was as up platform, seeing it versus brick into fortunate both driven this Also, small than our converted faster. legacy but a seeing pleased as that some platform loading were consider seen going of in which an business, significant we we time quarter. regions, Europe, is platform you exciting not But talking, teams XX% unfortunately, e-com with that, fourth Susan, significantly e-commerce that we times have lot we on in us challenging are are better through quarter then weaknesses was the the great quarter would and of when most third seeing e-commerce performance in the something was a

a increase and conversion We lot seeing spent side rates, are on more result of all in XX% seeing a this. time we as are this more of a engagement

So excited this all behind big think very us us, that front that a of in of challenges big with are that and opportunity we we have now we e-commerce.

Susan Anderson

sales up there. like deleverage one lower, fourth color how very maybe Is layering the back profitability on of the guess much what the is in I the profitability side, is of nice And the all quarter guess, get sales, be will back cost I'm and sounds how follow-up lower much quarter, then for expense you the thanks And more curious I -- profits, longer hear. to great that's kind on? Well, just on the that of, because just -- term? it of to that in of it speed? sustainable terms

Carlos Alberini

let Yes. me start.

the fourth through third in this profitable what very to was the business because store definitely increase we a in much are a And at and we have lot at revenues of we a more wholesale have allowed to we cost that XXX It -- looking cancel profitability. somewhat pre-spring/summer we a collection. was increment we very the And at where our looking change us obviously expecting the quarter but our decided the picture made different to than our to at efficiently way. that the were On structure all At business relative Just we just wholesale, in now. of one point, topline. quarter that and more unusual, of are that then, stores. came additional represented some hand, closures to Europe, drove different lot leverage a

worked. during now fall-winter could So to ship the the time about much collections in news the that to we give fourth going barely is that has that is that will very quarter is be the because I going we lever in as to difficult is, done are But losing impacting revenue a when lot so topline and not frankly to lost, that the you the good collection last us to quarter we behave. -- just this to set all have quarter of structure And how what that well, the spring/summer then is is year. sell And it the we cost obviously, we two are collection be course, and of base line through of prepared for and that going circumstances. of fourth fourth remarks my that the is down to said very as had not

that it's So that success we revenue to going is not but going year. Katie? this first or huge quarter in And of story. be reported the a base away, shipped next feel is again,

Katie Anderson

Yes.

our margin on quarter, then -- points Carlos leverage this past occupancy basis also line. had gained the as Susan, mostly product XXX mix and we with So said IMU, in some we business

expansion, see not deleveraged. but rent that quarter that type basis sales not that We million we most we expecting going QX, of on quarter, pressure it's to the points. in to are of anticipate this the looking about we we're And IMU also going into we're that don't worth XXX -- improvements, further had of $X Europe in have release from -- again

Susan Anderson

really Thanks Got much holiday Good That's it, helpful. you okay. so season. guys. luck this

Carlos Alberini

Thank you. you. Thank Same you, Susan. to

Operator

Thank you.

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

open. Your line is now

Janine Stichter

congrats Hi, progress. all on the

Carlos Alberini

Thank you, Janine.

Janine Stichter

presentation you. both you able and on You're ask just completed. getting IMU pretty Thank a the visually product that about that's benefits the global seems how from the it to like line, want expect global to accomplishment in terms welcome. Want side driving that feel big see of hear I buys? you to more also about about efficiencies then your as you're to consolidate

Carlos Alberini

you. brand thing to presentation such that there, Yes the most hard are own is I we our our people, just basis we the no, that the just present own We you entire customers that regions important thing we globe, big thank about very and on know, our when consistent product amazing in exactly key to just different own and did think to even a on the feel points, feel and see customers, the recently. finally our we mean, great Lugano, hit -- this Great, territories you teams wholesale is it's a in the do. across is that and

markets. their for the embracing line everybody seeing Just own

-- they really certain pieces specific going to of or adopt parts we to plan Of those be certain of embrace course, needs, needs try to are and the line. as and well

of capsules we addition core that to really just development what that opportunity some is to more design efficient to the going process that, kept whole in product the be. again have phenomenal. places reason, in -- is augment that We think For teams much mainline line to just make different

vendors to similar We many And last have were few very have made regions, had, Europe that fabrics, we that to Americas. call we you years of what just that's effort already using a dramatically, both with -- benefited a really common a at in using was by that increase internally, volume already really vendors that a vendor reductions But that big -- have I place trying so I vendor the different in trying each means it consolidated know, think, develop especially the IMU significant orders leverage now had can and go and you and previous I mentioned one takes we larger we when to in opportunities, result in cases, line, in much base those just IMU just line. that pretty another had and we successfully. go costs, to and were really big we in look the relationships to big will we then, And opportunity. our for

I I that just development saw the of that when in Just, prepared SKU cost with remarks think, going now because and twice, you're development mentioned the come SKU instead one you the of significant just down significantly. chain throughout style, same doing we supply in thing do my a obviously, one reduction also or

the brand much more to that clear significant demand. very a many good as next are we challenges here. with have. even as time have the But position we just -- us And, okay, just is -- And or And been and solid once buying line we savings or incredible customers number said, -- think side very, a share because to where even are the with from you, are to think that feeling see So receptivity, a more tone able on what pandemic they will it you the those today, opportunity of grow. the that's result, what on tell partnerships this opportunities that we're looking creating we is our has significant very and people of are during or But that received addition everywhere, the when wholesale challenging. the being taking continue I I'm I have businesses to consider to we buying this, it's are the big customers. going pressure the to in how position a and there are not the in in other the

Janine Stichter

last in big was from of I of logistics going think anything in the side. on just think that's you improvement on globally? laid then both Europe Thank margin us logistics Maybe improvement? update plan and where the the terms out think When December, of I a piece I are you coming you.

Carlos Alberini

Yes. difficult know, Europe, a Janine. We of reset you were was top when Yes, one some did the that been there the as the especially address were several Thank on and reduce and on fortunately, my going logistics, to started challenging I the was -- company you, to cost well able priorities, recall team company. came through whole when back the in there. there great And you it's pretty may of times we had network to were I that this, areas job a significantly. --

we of renegotiated thought have We have us painful too then. so and much was the several in one reduce that facilities. disbursed the the it so all backed then And contracts network, those capacity to size was had to we of goals that were

Netherlands we third-party and there are opportunity long-term but opening we facility taken Poland the we through paid temporary, lower it close rates in able or be there market consider So that without we being were quantities already transfer the the are is initiative absorb that and in facility a liabilities do as new significantly the able business e-commerce new our any and we assets was labor servicing by then, expensive facility are for we facility other absorbing and to new are a were part considering that, to -- very, for, are successfully that are we from very being we And going there. the to the for an is -- had this really were were and that lease over, a to the of paid was success. about Venlo, And it, processed very presenting. or also we facility. excited And and were that one now able to of that a them big opportunities that we

plans you with some the next that this of look Americas, couple strategy automate we'll and Canada some you. sharing invest we especially of into look I to years. share we to in opportunities have when then We things, the our the So think when money more probably forward at in some we have event,

Janine Stichter

much. so thanks Great,

Carlos Alberini

Thank you, Janine.

Operator

you. Thank

Evercore from Our next from question comes Omar Saad ISI.

is line Your now open.

Omar Saad

very taking Very, nice question. my for Thanks quarter.

Carlos Alberini

Thank you. Omar? you are How

Omar Saad

fashion of job. a it's some maybe know really, Europe sounded was strength, big shutdown Are the know, dig seeing, what's underlying I does bit it effect to the could be Thanks. to consumer the the kind like news tied great wholesale that, there. social could important of, to [indiscernible] you a vaccine want a the at driver? of talk numbers outlook, Maybe you and your of, to I bit, those little then really kind course, to think demand? -- but in how social. brand the you given I -- related Carlos, position talk being Carlos, kind Guess's in about and two, of sense, I And going the you root wanted bit you linked activity especially it be of, about It dive things little topics. of channel. out more historically it's, are somewhat

Carlos Alberini

very Thank we there, of course long-term Europe, love our as also biggest to our mean you, territory you of a territory. the lot the become in we I and we Omar. space and has strategy. consider win Well, and is white critical business to But Yes. know, still see

business are at the towards winning those, basin. When have a if Mediterranean the balanced. well from North the you but And we have we relatively of that, very you know, look countries, very opportunity look excited, the mature, are we countries other areas. been lot and I is the think So Southern many we and you in Eastern

and is and we strong the very probably were doors, more strong is Obviously, eight nearly had network on successful other that distribution have our have retail a anticipated. very have the base. so we X,XXX getting pain than they did pandemic, as we a fire about not wholesale a it Wholesale, have originally outstanding have season, think with And there, did if reorders and super and on I of there been. successful. here as mature lower seasons much We feeling returns base -- thing as the everybody performance course, sell-through they talked very through hand, growth business cancellations. but On of we one the very consecutive wide eight that -- is much but fall and is it the I the was -- not were no very

We in really lockdown just -- the stronger right that resulted better, is on this the much we direction are seeing after we a taking of all for of -- business. some putting So that that the with type are market the of more careful value timeless quality money, being more -- how product the are the those resonating for with so is product product less needs, given and we we the customers. into what

on apparel a saw have didn't athleisure. and focus strong a of this We that the just we is athleisure, sales we ago X% have category a even season -- a was adult

you new you never using called, So know, stock this you with we sales having. of working of a can of that. type very are and total us is likely coming from well our program and denim something we what are Then is denim XX% success are to are what this close familiar program, out of type see carryover,

the we very are men's have. handbags And marketplace have to in and that strong Our for we to just nothing what is the we the we footwear, a accessories have, in compares product there second example. then, prices none, of line have at

course, celebrate this the once and completely very, think loving this socializing but We and very think doubt, tremendously. and us when impacted excited and the people just product the feel but is having obviously at I momentum is they good think of talk at about we customers, When then the you in second I'm I that that better that. to driving about I quickly. that, is so is are So of mean, and no virus, else, about going the yes temporary customer showing lot you And very we very quarter that that are online. the people I a trend waves everything look that -- we retail, waiting success. third renew a all were really think have that

debt, of excited. to because you So of that this, not for And loss Europe of the seeing that is we are big up very business is in a just some business. online compensate significantly, opportunity so we here are know, we're

Omar Saad

of how occasions you for Really lot helpful Does the how great. you Carl, drive your wearing think And color. vaccine about the that's brand? effect, plan a that next year?

Carlos Alberini

of the of type as result vaccine set of and are to product that a on third in looking primarily, done we trying technology priorities of zero-based organization -- we approach at going a two, use cost. are the great in our what doing you control. have, it do more from Frankly, then, is our when in but at see advantage big get in to based thing think much how wholesale post-COVID and be our budgeting really operating that start business are models we we stores we business doing and know, that. everything that starts e-com going do and follows for priority, each have are even to is big I the we staying and with that the with but more of we and think It's a we think, very we and job stores what our to meantime level we And cost strategy; our structure less world, lower it's -- the I this us: efficiently It's with and line the stores, like three enter the And business. think do that to one, how about we we the we a do are are is team, thinking, support lot we that I start our can organized then hard when say is the ready? to mean, we with to tough we and on will very okay, plan but process,

the I and hard on think, to we end that that working finished year this. next have we that, I mentioned are of plan project by

Omar Saad

who pandemic, the that during vaccine, like Now congratulations. a quarter needs a with

Carlos Alberini

We vaccine. Well, thank you, Thank the you. Omar. want

Operator

next [Operator Research comes Our Associates question Janet Kloppenburg from Instructions] Incorporated. from JJK

now Your line is open.

Janet Kloppenburg

wearing, products occasion bit. [ph] you nice a the seeing any if could wondered Europe just special I I look might Hi, North we Asia America and wanted ahead in job. a nice with just where I'm be had encouraging or are everybody that in in it even to and work wondering, to on the that signs thinking vaccine Carlos, forward? to quarter. respect in -- recovery. congrats or dress little going forward

Carlos Alberini

you, Thank Janet. Yes.

local lot have of bottom a at as team, improvement be the our the very to are China, of market core us, this, result back we lot are because are the a be and and resonates product, line base significant team we over-buying that to the seeing Golden performance excited. we the things also a there we more very business but But well, in and business could and think peak young happy. done a and we China we during our And so careful had customer we with customer they are that have a line pleased know, there, as we first remarkable what it look for [indiscernible]. Traffic all good try too. couldn't guess because not with brand we especially You and we had very represented When thought brand that pleased, the work to performance had think quarter do improve the has job. was of second on tough a the pretty Korea. having and I went really turn you period well that Week we a with especially in and also shown on with in internally quarter to products Korea and the remarkable, that we a very and performance that we together in, we put is

pandemic there have there. that then, thing consider of -- the would business and the is other brands has are leisure, the I I at you doing, while well way. seems think is representing least necessarily think, to the we the very But, good leveraging then product, just business a that be types So, in obviously in the sold categories which presenting only great some we the that dressy dresses the we the look the overall just at in stores core not in those and great. are markets, in much looking for our at right job as as basics products And all case more a

did think stores eliminating were tremendous the team markets very, I that that very and the engaged very or portfolio brand is just clean they were not in well. to that a or with always the and know we closing profitable. shows And then really in of there, energy lot not work the line

a So and we down few we have we year. XXX cities, and a several relationships more good to and are stores is believe a us to more to we are place, already secondary of had represent that the we plan the working in by also franchisees end the few with

Operator

Thank you.

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

now Your line open. is

Dana Telsey

Good everyone. afternoon,

offsets heard about think the line business? any that expenses be holiday of for increases are on seeing you shipping, And and that? beyond. you are you for the there? looking What to preparing we for planning you. terms freight, and you obviously Thank expense as should of are in surcharges, the we've there reinvigorate As continue How

Carlos Alberini

because what every comments the and You the you? on this to or done Thank are much Dana. much cost what protect an about know. really Xth just -- with a bottom demand look the Katie, you not like operate organization. know, was tried that leverage has enough we at quarter. well -- exactly for of year, the we to that we a have holidays really company touch areas look But and gave the make really to tricky wanted have we question in at of lot can if the lower you you, resources opportunity knowing probably to we the go had that you work we go levels efficient any that know, in is every sure and was mean, discovering When going just are on How to structure can Yes. to thing, create several just said, expenses done but a line lower this year, of us more it I with much to on business. single of leaner periods, support area this expenses But know, going I'm to talk we then and the probably some the topline

very, know, has was costs then, course, that where was is very in, just expensive, premiums just we respect forth. with been depending shipping with to market about product of so it that very extra freight the especially inbound paying the thought accelerate worth picky You have freight; categories and freight on we just you been demanding. we asked freight But and

we shape, for relationships well and that ahead with I what think time. capacity partners we great in of did in we us. our to was good working have are pretty Katie? negotiate And that area is

Katie Anderson

Yes.

as into because to of we're Dana, the volume margin expense come fourth this quarter, high line. continue But tightly fixed see SG&A you of the So know, we to the lot throughout really, really year we and to of we'll manage on that pulled continue out the some a component expenses we'll that just going as SG&A SG&A has. get progress deleverage on

Dana Telsey

Thank you.

Carlos Alberini

Thank you.

Operator

turn to call over time, And in Carlos. this we further the have will no questions queue. I back At

Carlos Alberini

updated the we today. keep the make a happy Well, we support and opportunity, participating you progress a And Year. a have all also determination We'll you. thank the you I'm you, New result to your our all of grateful you prosperous thank today. times. challenging very and holidays for our better participation wish to this Thank on want really and company very as that again, for

Operator

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

may You disconnect. now

Guess' (GES) 2 Dec 202021 Q3 Earnings call transcript