The denim retailer also agreed to pay out a $120.8 million special dividend.
Rag & Bone fall 2024 ready-to-wear collection at New York Fashion Week COURTESY OF RAG & BONE
Guess Inc. is keeping more than busy.
Not only is the denim player preparing to take on Rag & Bone through a joint venture with brand manager WHP Global, it has arranged to take its businesses in Chile and Peru in house while driving its core operations in the fourth quarter and socking away some extra funds for shareholders.
The company said it would pay out a special dividend of $2.25 a share on May 3, handing $120.8 million over to its stockholders.
Investors approved and sent shares of the company up 10.4 percent to $28.65 in after-hours trading on Wednesday.
Chief executive officer Carlos Alberini pointed those signs of financial strength as a reflection of operational strength.
“We are at an inflection point in our company’s development, and we couldn’t be more excited about our future,” the CEO told analysts on a conference call.
Alberini stressed that the company has a “unique, diversified business model” that is working across “multiple product categories, geographies and channels of distribution.”
Soon Rag & Bone is going to be on that platform, as the deal to buy the brand is expected to close this quarter.
The CEO said Paul Marciano, Guess cofounder and chief creative officer, has “jumped in with both feet” to work on the brand, the company’s first acquisition of an outside brand in its 43 years.
“Paul and I had the opportunity to spend time with Andrew Rosen, chair of the board, and the Rag & Bone licensees that will enable us to drive the growth of the Rag & Bone business globally,” Alberini said.
“We couldn’t be more impressed with the quality, expertise and depth of the leadership and of the overall organization, including store personnel,” he said. “We can’t wait to begin working together.”
Even without the Rag & Bone deal, Guess came into the year with some momentum.
The retailer said its fourth-quarter net income increased 20 percent to $115.3 million. Adjusted earnings per share rose 16 percent to $2.01, coming in 45 cents ahead of the $1.56 analysts projected, according to FactSet.
Revenues for the quarter ended Feb. 3 increased 9 percent to $891.1 million, well ahead of the $856 million analysts projected.
With Rag & Bone on board, Alberini projected that Guess would exceed $3 billion in revenues for the first time this year.
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