In the period we delivered adjusted earnings per share of $1.18 compared to $1.22 last year.
While our revenues were 23% below last year and in line with our expectations, our digital businesses accelerated more than what we had anticipated, posting a 38% revenue increase in North America and Europe and our licensing business also outperformed.
In spite of the revenue decline we managed our business well and delivered an adjusted operating margin of 11.4% in the period, only 70 basis points below last year.
The main driver of the outperformance for the quarter was our gross margin, which increased 240 basis points versus last year.
While we experienced a significant revenue contraction of 30% in the year due to the pandemic, we were very proactive and lead the business carefully managing inventories well and controlling expenses tightly.
All considered, we were able to reverse our first quarter adjusted operating loss of $109 million to close the year with an adjusted operating profit of $20 million.
We also returned value to our shareholders via dividends and we purchased $39 million of our shares.
We closed the year with a strong balance sheet with $469 million in cash.
Our capacity to adapt to each and every change in the industry and the business has been validated by the multiple business model changes our Company has endured successfully over the last 40 years.
With revenue in line with our outlook, but margin significantly higher than expected, we were able to deliver $74 million in adjusted operating profit.
We also saw a nice momentum in our e-commerce business, which was up 38% for the quarter in North America and Europe versus 19% in Q3 and 9% in Q2.
Fourth quarter revenues were $648 million, down 23% in US dollars and 26% in constant currency.
The impact of temporary store closures on our sales versus prior year for the total Company during the quarter was about 10%, mostly in Europe, but also in Canada.
We had some anticipated shifts in European wholesale shipments which were worth about 6% of total Company sales to prior year.
Excluding these two factors, the 23% Q4 sales decline would have been a decline of about 7%.
In Americas Retail revenues were down 24% in constant currency where negative store comps and temporary and permanent store closures were partially offset by growth in our e-commerce business.
Store comps in the US and Canada were down 21% in constant currency, slightly better than Q3, which was down 23% as continued sequential improvement in US sales was offset by softening in Canada due to traffic declines as a result of the pandemic.
In fact, if we remove the five super high-volume days in Q4 from the sales calculation, our Q4 store sales comp in the US and Canada would have been about 5% better than what we reported.
In Europe, revenues were down 32% in constant currency.
Store comps for Europe were down 26% in constant currency, significantly impacted by the increase in COVID levels in that region.
In Asia store comps were down 22% in constant currency driven by a resurgence of the virus in some of those markets like Korea.
Our Americas Wholesale business was down 14% in constant currency compared to down 34% last quarter and 49% in Q2, still under pressure from the deceleration in demand, but showing vast improvement quarter-to-quarter.
Licensing revenues were strong, up 12% to prior year in Q4, driven by continuing recovery in the business, but also some timing in sales.
Gross margin for the quarter was 42.6%, 240 basis points higher than prior year.
Our product margin increased 140 basis points this quarter primarily as a result of higher IMU, as well as lower promotions.
Occupancy rate decreased 100 basis points as a result of rent relief and business mix, partially offset by deleverage on sales.
This quarter we booked roughly $15 million in rent credits for fully negotiated rent relief deals across Europe, North America and Asia.
Adjusted SG&A for the quarter was $202 million compared to $237 million in the prior year, a decrease of $35 million or 15% and better than our expectations.
Adjusted operating profit for the fourth quarter was $74 million versus $102 million in Q4 of last year.
Our fourth quarter adjusted tax rate was 7%, down from 17% last year, driven by the mix of statutory earnings.
Inventories were $389 million, down 1% in US dollars and down 5% in constant currency versus last year.
We ended the year with $469 million in cash versus $285 million in the prior year and we had an incremental $272 million in borrowing capacity.
Capital expenditures for the year were $19 million, down from $62 million prior year.
Free cash flow for the year was $183 million, an increase of $50 million versus $133 million last year.
In addition, last year's outflow included the non-recurring payment of the $46 million European Commission fine.
For the fiscal year, we lost almost $800 million or 30% of our sales versus prior year as a result of the pandemic.
However, we were still able to maintain positive adjusted operating profit of $20 million, $130 million lower than prior year, allowing for only 16% of those lost revenues to flow through to our bottom line.
This year we expanded product margins, executed over $30 million in rent abatement and relief, cut SG&A by over 20% and managed our capital very tightly, all the while we had our eye on the future of our brand, positioning this Company to win as we emerge from the pandemic.
We returned value to our shareholders reinstating our dividend in Q3 and completing $39 million of share repurchases at an average price of $10.
I'm going to anchor our comparisons to the pre-COVID Q1 of fiscal year 2020, which ended May 4th, 2019 as this past year's fiscal first quarter is clearly not a normalized comparison.
Quarter-to-date, we have seen sales comps at our retail locations of down 4% in the US and Canada, down 19% in Europe, and down 22% in Asia.
Currently, we have over 240 stores closed with approximately 400 additional stores with reduced operating hours.
E-commerce growth has continued to accelerate and is up 58% to prior year for the quarter-to-date in North America and Europe.
In terms of profit, adjusted gross margin in the first quarter is expected to be around 200 basis points better than fiscal quarter 2020, driven primarily by business mix as well as improved IMUs.
For full fiscal year 2022, we expect revenues down in the high single digits to the fiscal year 2020 barring COVID shutdowns past Q1.
Furthermore, we remain committed to delivering net revenues of $2.9 billion and an operating margin of 10% by fiscal year 2025.
I am confident that we have an opportunity to more than double our earnings per share to $3 and increase our free cash flow by 65% by fiscal 2025 respect to fiscal 2020.
As a result, we plan to more than double our return on invested capital to 26% by fiscal 2025 from 12% in fiscal 2020.
For example in Europe, we have a faster platform with a homepage download over 3.5 times faster, a 13% lower bounce rate and an 18% increase in mobile conversion rate from our previous site.
During the year, we were able to rationalize our store portfolio closing over 125 underperforming stores and renegotiating 290 leases at favorable terms.
brand into our GUESS Factory business in the US, converting almost 60 of our stores which have already shown very encouraging results.
While we are currently in approximately 100 countries, we have whitespace in multiple markets where we are underdeveloped.
We have big goals to improve our environmental agenda and deliver 100% denim to be equal and 100% recycle synthetic materials and packaging by 2030.
Today we are at 25%.
On the heels of our sales force and omnichannel capability rollout, we are implementing Customer 360, a fully integrated suite developed by salesforce.
We have a rich global base with almost 5 million customers in all three regions and we see big opportunities to put the Customer 360 tool to work on this and grow this program in the next few years.
We have been very successful in rationalizing our global store fleet over the last few years and still have significant flexibility to optimize our portfolio as 80% of our leases worldwide are expiring in the next three years.
We made the decision to exit more than 15 unprofitable flagship locations, some of which have already been closed while others are planned to close later this year.
All together, we estimate that our plan will contribute to 200 basis points of operating margin improvement by fiscal year 2025 versus fiscal year 2020.
In fact, over the last two years we have reduced our number of suppliers by over 60%.
As Carlos mentioned, we are confirming the commitment that we presented in December of 2019 to deliver 10% operating margins by fiscal year 2025.
And while we still believe in sales growth for our brand over the next few years, I get particularly excited that the meat of our path to double earnings per share from fiscal year 2020 to $3 in fiscal year 2025 lies in the middle of the P&L, where we have the most control.
In terms of revenue we anticipate that we will reach $2.9 billion in fiscal 2025 versus $2.7 billion in fiscal 2020.
As a result, we see our e-commerce penetration of direct to consumer sales growing from 13% in fiscal year 2020 to 23% in fiscal year 2025.
I'll mention that e-comm penetration was 22% this past year, but that was inflated a bit with the pandemic induced store closures.
In terms of adjusted operating margin, we see 440 basis points of growth over the next few years.
The vast majority, 400 basis points, is coming from operational efficiencies with the remaining 40 basis points coming from leverage on higher sales.
Store portfolio optimization represents a large portion of the margin expansion, about 200 basis points.
We expect 90 basis points of supply chain efficiencies primarily from better IMUs.
We anticipate 70 basis points of margin expansion from fiscal 2020 in this area.
Lastly is logistics which is expected to contribute 40 basis points of operating margin improvement.
We see the 400 basis points of operational efficiency falling roughly equally over the next four fiscal years as some of the initiatives require some lead time.
We believe we can generate higher free cash flows over the next four years as we continue to remain disciplined on managing working capital and driving operating margin to 10%.
At the same time, we believe we can support our strategic plan with investment levels flat to 2020 of roughly $65 million.
This should result in $220 million of annual free cash flow by fiscal 2025, 1.7 times that of our fiscal 2020.
As we exit underperforming stores, optimize our working capital and migrate to a capital-light model where appropriate, our goal is to more than double return on invested capital to 26% by fiscal 2025, that is 12% in fiscal 2020.
As a reminder, we repurchased slightly over 25% of our shares over the last two years at an average price of $15.76.

Summary:
In the period we delivered adjusted earnings per share of $1.18 compared to $1.22 last year.
The impact of temporary store closures on our sales versus prior year for the total Company during the quarter was about 10%, mostly in Europe, but also in Canada.
We returned value to our shareholders reinstating our dividend in Q3 and completing $39 million of share repurchases at an average price of $10.
I'm going to anchor our comparisons to the pre-COVID Q1 of fiscal year 2020, which ended May 4th, 2019 as this past year's fiscal first quarter is clearly not a normalized comparison.
For full fiscal year 2022, we expect revenues down in the high single digits to the fiscal year 2020 barring COVID shutdowns past Q1.
Furthermore, we remain committed to delivering net revenues of $2.9 billion and an operating margin of 10% by fiscal year 2025.
As Carlos mentioned, we are confirming the commitment that we presented in December of 2019 to deliver 10% operating margins by fiscal year 2025.
We believe we can generate higher free cash flows over the next four years as we continue to remain disciplined on managing working capital and driving operating margin to 10%.