GUESS by Marciano's Addee

Record First Quarter For Guess?

European and Asian Markets Boost Revenue

LOS ANGELES (June 5, 2008)—Guess?, Inc. (GES) released its first-quarter financials for fiscal year 2009, ended May 3. Net earnings reached a record $47.8 million, an increase of 35 percent compared to net earnings of $35.5 million for the quarter ended May 5, 2007. Diluted earnings per share increased 34 percent to $0.51 in the current quarter—another record—compared to $0.38 in the prior year quarter. “We are very pleased with our financial performance this quarter, especially considering the current economic environment in the U.S.,” says Guess? CEO Paul Marciano. “We increased revenues by 29 percent and achieved earnings per share growth of 34 percent. Our strategy to expand our international business continues to yield strong results; in the first quarter, two-thirds of the revenue growth for the company was generated by our European and Asian businesses. Our business continues to evolve into a highly diversified model where we do not depend on any one channel, territory or product category.”

Total net revenue for the first quarter of fiscal 2009 increased 29.4 percent to $489.2 million from $377.9 million in the prior-year quarter. The company’s retail stores in North America generated revenue of $211.9 million in the first quarter of fiscal 2009, an 18.1 percent increase from $179.5 million in the same period a year ago.

Net revenue from the company’s wholesale segment, which includes the company’s Asian operations, increased 26.9 percent to $75.1 million in the first quarter of fiscal 2009, from $59.2 million in the prior-year period.

Net revenue from the company’s European segment increased 50.2 percent to $178.7 million in the first quarter of fiscal 2009, compared to $118.9 million in the prior-year period.

Licensing segment net revenue increased 15.7 percent to $23.5 million in the first quarter of fiscal 2009, from $20.3 million in the prior-year period.

Operating earnings for the first quarter of fiscal 2009 increased 31 percent to $75.9 million (including a $5.9 million favorable currency translation benefit) from $57.9 million in the prior-year period. Operating margin in the first quarter increased 20 basis points to 15.5 percent, compared to the prior year’s quarter. This margin expansion was a result of higher European product margins and a higher mix of European business, improved leverage over occupancy costs, partially offset by lower product margins in North America and increased costs related to infrastructure investments.

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