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Guess? is a conscious catalyst organization that cares about environmentally responsible practices and a great work environment. Guess? is a company that gives back to the world to make it a better place. With a sharing of our vision statement with our entire team, we officially launched our strategic planning cycle this year. At the end of the conference, key members of our executive team stayed on to kick off the process. The team is already working hard to complete the project and as I committed to you during our last call, we plan to come back to you with an update on it after the end of the summer.

In the meantime, we continue to make solid progress on key projects that we have launched applying the key principles that I mentioned before to take advantage of value creation opportunities for our Company. Let me start with capital allocation. As we reviewed the value creation opportunity relative to our operating performance and our expected future cash flows, it was clear to us that there is material incremental value in our Company, as we take actions to improve our operating performance. These represent changes that are completely under our control, and we plan to attack in the short to medium term. For this reason, we made a strategic decision to redeploy capital and return incremental value to our shareholders through significant share repurchases, while reducing our dividend by 50%.

As you know, our Board approved a plan to raise $300 million in convertible debt, which we executed during the quarter and the majority of the net proceeds have already been deployed or have been committed to repurchase stock. We expect the impact from the convert transaction and share repurchases to be accretive to our adjusted EPS this year by $0.10 per share. We are really excited with the transaction, as we achieved very favorable terms. Our interest coupon is 2% and we were able to buy a bond hedge and warrants to eliminate the economic dilution unless the stock price exceeds $47. With the shares repurchase so far and the completion of the ASR, we expect to buy about 17% of the shares that were outstanding at the beginning of the year. And we believe the incremental value to shareholders over time will be very material.

At the same time, we'll continue to prioritize our capital allocation toward investments that support growth and infrastructure, based on their strategic significance and the return on invested capital expectations. Additionally, we have already taken steps from an inventory management perspective to ensure that inventories are planned and managed in a very disciplined way. The results of this actions are already materializing in our inventory forecasts for the remainder of the year.

Second, product development and distribution optimization. As I mentioned last time, we have a number of key product categories such as denim, accessories, Marciano and men's, that if better assorted and represented in stores and online can drive incremental sales for us. For instance, we have already implemented plans to increase capacity for our denim product in 219 of our stores globally for foreign holidays. This includes 90 stores in the US. We are also working on introducing additional fashion styles to provide more variety in the denim assortment. Our marketing campaign for the summer and full seasons will feature denim prominently to reclaim our dominance in the category.

In addition, we now see significant opportunities to design and develop product for the key target customer groups and having the right product in the right place at the right time will become also a big priority. This involves speed to market and the use of analytics and technology for the digitalization of the supply chain. We have also reorganized our Marciano team to address local customer preferences more effectively. Going forward, we will operate with two design teams, as we do with the Guess? line. One team will be based in Los Angeles to serve the North America region, and the other one in Stabio, Switzerland to serve Europe.

Third, global strategies. I continue to believe that we have a tremendous opportunity to leverage and support our global business more effectively by reorganizing accountability and strengthening our infrastructure including the use of technology and data analytics in areas such as inventory management, logistics and distribution, sourcing and product development, store site selection and product pricing. And we are already evaluating options to invest in process improvement tools in all of these areas.

Regarding functional accountabilities, we are approaching several operational and support areas with a consistent global focus. Some examples of functions with global responsibilities are finance, strategy, IT, logistics, sources and product development, inventory management, human resources and real estate.

Fourth, cost structure optimization. There are definite areas of opportunities for significant cost savings and operating efficiencies in our Company. We have already engaged a consulting firm to study and assess our cost structure and identify opportunities in the Americas and in Europe. I believe the results of this assessment will give us a roadmap for executing improvements to our operation and cost structure to drive incremental profitability.

And fifth, customer centricity, which as I have said in the past consists of placing the customer at the center of everything we do, including perfecting the omni-channel experience. We have strong customer files in the Americas, Europe and Asia that provide a lot of insight into the customer's product purchase history and their behavioral shopping patterns. By leveraging this data, we'll be able to map the customer journey and through predictive analytics be able to personalize marketing effectively and delight the customers by delivering the product and experience that they are looking for. We're also reassessing our current systems and tools to deliver a seamless omni-channel shopping experience. We plan to implement new technology to perfect our capabilities globally.

Regarding our financial results. For the first quarter, we reported another quarter of strong revenue growth. We reported a 3% increase in revenues, 8% growth in constant currency. During the period, we increased gross margins by 50 basis points company wide and we managed expenses well. Our adjusted operating loss finished within the range of our guidance and our adjusted loss per share finished at the high end of our guidance. Our financial results this quarter represented strong performance in the Americas and Europe. partially offset by weakness in Asia.

Let me quickly comment on the situation in Asia. It has become clear to us during the course of the first quarter that there has been a significant softening in the business and we see that in the form of lower traffic both through our stores and through our e-commerce platforms, including Tmall, where we sell our product on. While in the short term, this is painful for the business. We still see very good long term potential in the region, as we don't believe that the current issues will impair our ability to capitalize on that potential.

Looking ahead, I want to talk briefly about tariffs on imports from China and Mexico into the US. As others in the industry have been doing, we are taking actions to mitigate the impact from the potential increase in tariffs. This actions include cost sharing with our suppliers, shifting sourcing to other countries of origin, raising prices if the pricing still delivers the value in the product of our customer is looking for and offsetting this increased cost with other cost saving initiatives. Of course, if the List 4 tariffs go to 25%, the impact to us will be meaningful. But the situation is still fluid and we will continue to accelerate the mitigation actions, as the situation evolves.

Before I conclude, over the last three months, I have spent considerable time reflecting on my role at Guess? and on all the opportunities that I see for our Company. Today I want to share with you how excited I am about my job and our Company's opportunity to execute on the vision that I shared with you earlier. I will focus on four big points that make this opportunity extraordinary.

First, brand relevancy and attracting a new younger customer. I strongly believe that the Guess? brand continues to gain relevancy in today's retail marketplace on a global level. Our celebrity partnerships and collaborations continue to draw significant customer interest into our brands attracting not only our traditional Guess? customer, which we call our heritage customer, but also millennials and Generation Z customers, which now represent more than half of our online customers in the US.

I couldn't be more excited about our new partnership with Jennifer Lopez, "It's My Party" tour to take place from June through August 2019. As you know, Jennifer Lopez has an incredible reach across multiple generations all over the world with over 94 million followers on Instagram. She also relates to the Latino community amazingly well, which represents a big part of our customer base both inside and outside the US. Our previous campaign with her yielded significant benefits for the Company and I think that this is a perfect partnership for Guess?

We see millennials and Generation Z customers as our biggest growth opportunity. They love the brand and shop us for street wear and vintage inspired trends, viewing Guess? as accessible luxury. They shop each collection launch and tend to purchase at full price. We have launched initiatives to personalize our marketing and merchandising to increase engagement and have seen improvements with Gen S, Gen Z showing the highest conversion online. This is a generation that is almost 50% larger than millennials and has a preference to shop in-store. A recent Bloomberg study found that 95% of this Gen Z customers visited a store over a three month period versus 75% of millennials and 58% of Generation Xs (ph). We are also conducting tests in-stores to increase the presence of key products developed for the Gen Z customer, and we have seen strong sell through and meaningful productivity improvements when we did so.

Second, top line momentum and significant white space to grow globally. We just closed our 15th consecutive quarter of comp growth in Europe and our fifth consecutive quarter of comp growth in the Americas. While Asia is experiencing weaker trends, we believe this softening to be market driven and not brand specific and we still see very good long term potential in the region.

Regarding China specifically, I believe that we have an opportunity to build a big business there. We currently have stores in only 34 of the top 60 cities with 90% of the Guess? stores being directly operated. Our e-commerce business can also grow significantly considering that Guess? ranked among the top 50 international brands doing business with Alibaba via Tmall on 12/12 last year. I see a big part of our growth to be organic growth.

The Company invested considerably during the last few years to open new stores and strengthen our country management infrastructure. I believe, we now have significant capacity to grow through productivity increases. In Europe during the last three years, we added 218 owned and operated stores and in Asia, we added 177 owned and operated stores in the same period, primarily in Greater China.

Looking at some specific countries, we have increased our position in key markets very effectively. Two good examples are Poland and Russia, where we now have 54 and 37 stores respectively. Most of the stores were opened in the last three years. We are growing in all channels in these countries, and we see opportunities in other countries to do the same.

Third, e-commerce penetration is still below best-in-class industry standards. While our e-commerce business in all regions is growing at a faster rate than the other channels, our penetration is still below industry standards. Last year, we did roughly 12% of our direct to consumer business online. Best-in-class companies are operating at between 30% and 40% penetration. With the right technology and a perfected omni-channel experience, we don't see issues to significantly improve from where we are. And with a bigger business, we see an opportunity for margin expansion in this business as well.

Fourth, operating earnings growth. During the last few years, Guess? has driven significant adjusted operating earnings growth in a retail environment that has seen meaningful contraction both domestically and overseas. Considering our updated guidance for this year, we expect to increase adjusted operating earnings again this year in the range of 13% to 22%. This would imply a compounded growth of adjusted operating earnings of 25% over the last three years.

I see significant potential for margin expansion through cost reductions and operating efficiencies in our business and including the use of data analytics for inventory management, supply chain distribution and marketing that number could continue to grow. These are all very compelling opportunities that require tremendous effort and great execution. I am committed to building a great team to tackle our future together. We have amazing talent in our Company and the commitment of our Company, of our people is absolutely extraordinary. I can't wait to go through the journey together.

With that, let me pass it to Sandeep to give you more details on the financial results and guidance for the period. Sandeep?

Sandeep Reddy -- Chief Financial Officer

Thank you, Carlos, and good afternoon. During this conference call, our comments reference certain non-GAAP or adjusted measures. Please refer to today's earnings release for GAAP reconciliations or descriptions of such measures. First quarter revenues were $537 million, up 3% in US dollars and 8% in constant currency versus the prior year. I would like to highlight that this was our 11th consecutive quarter of revenue growth.

Total company gross margin increased 50 basis points to 33.9% driven by higher IMUs and occupancy leverage. This was on top of a 160 basis points improvement in gross margins in last year's first quarter.

Adjusted SG&A as a percentage of sales increased by 80 basis points, primarily driven by the deleverage of expenses in Asia. Adjusted operating loss for the first quarter was $22 million, a deterioration of 10% versus the adjusted operating loss last year, but within the range of our expectations.

Adjusted operating margin finished 30 basis points lower than last year at negative 4.2%.

Our first quarter adjusted tax rate was 11%, down from 23% last year, driven by the mix of statutory earnings. Adjusted diluted loss per share finished at the high end of our guidance at $0.25.

Now for some more color by segment. Americas Retail revenues for the quarter finished up 3% in US dollars and up 4% in constant currency. Comp sales for the quarter including e-commerce were up 4% in US dollars and 5% in constant currency marking our fifth consecutive quarter of positive comps. The positive comps in the quarter were driven by better conversion and UPT. E-commerce increased the comps for the quarter by two percentage points. While the start to the second quarter was challenging, our business has improved since the lead up to the Memorial Day weekend and our guidance for the quarter reflects this.

Americas Retail operating margins in the first quarter expanded 230 basis points, marking our seventh consecutive quarter of operating margin expansion. This was achieved through positive comps and SG&A leverage, partially offset by higher markdowns.

Saying in the Americas region, I want to take a moment to talk about the Americas Wholesale business. Revenues grew 14% in US dollars, and 16% in constant currency and were driven by a continuing strong performance in our US department store and specialty business. The Americas Wholesale operating margins in the quarter expanded 210 basis points, primarily through higher IMU and sales leverage.

European revenues for the quarter grew versus last year by 2% in US dollars and 12% in constant currency and were driven by new store openings and positive comps. Comps including e-commerce finished down 1% in US dollars and up 8% in constant currency. E-commerce improved the comps for the quarter by three percentage points. The comp increase marked the 15th consecutive quarter of constant currency positive comps for the European region.

Our European wholesale business also continues to be very strong. We have closed our order book now for fall/winter 2019 and have concluded our fifth consecutive season of double digit growth. The growth for the fall/winter season came from a combination of higher same-door buys and new doors, as we have resumed increasing our wholesale points of distribution.

European segment margin improved by 210 basis points due to lower markdowns, higher IMUs and leverage from positive comps. As a reminder, we expect European -- a low European logistics cost to contribute at least 100 basis points to margin expansion in Europe for the year.

Moving to Asia. First quarter revenues were up 1% in US dollars and up 7% in constant currency. Comps including e-commerce were down 15% in US dollars and down 10% in constant currency. E-commerce improved comps by 1 percentage point. We experienced broad based weakness in our major markets in Asia, that is Korea, Japan and China with a weak trend in traffic across all three markets in the quarter. Operating margin for the Asia segment contracted 860 basis points in the quarter, primarily due to expense deleverage, as a result of the negative comps.

Moving on to the balance sheet. Account receivable is $251 million, up 3% in US dollars and 9% in constant currency in line with our revenue growth. Inventories were $478 million, up 10% in US dollars and 15% in constant currency versus last year. We are still carrying some excess inventory from the end of last year, but continue to make progress on our plans to move through this inventory through a combination of our own retail outlet stores, as well as stock liquidation channels. As communicated on our last call in March, we expect the inventory pressure to ease more in the back half of this year.

Free cash flow was negative $115 million, a deterioration of $28 million versus negative $87 million last year, primarily driven by $29 million lower operating cash flows. As a reminder, the negative operating cash flows in the quarter include a $46 million payment for the EU Commission fine, so our free cash flows improved by $18 million excluding the impact of the EU Commission fine.

As Carlos mentioned in his prepared remarks, we were excited to execute our five year $300 million convertible debt offering at the end of April. The offering was combined with a bond hedge and warrant structure that enables us to protect against the economic risk of equity dilution up to a level of $47 on our stock price. The cost of the bond hedge and warrant structure and transaction fees was approximately $38 million, resulting in net proceeds from the offering of $262 million. The majority of the net proceeds have already been deployed to do share repurchases through a combination of privately negotiated and open market transaction, as well as through $170 million ASR.

During the quarter, we repurchased 10.3 million shares at a cost of $202 million. 1 million of these shares were purchased on the open market prior to the planning and execution of the convertible bond transaction. Of the remaining 9.3 million shares, 4.2 million shares were repurchased through privately negotiated and open market transactions and 5.1 million shares have already been delivered to us against the ASR with the balance expected to be delivered after the completion of the ASR by the end of the third quarter of this year.

We ended the quarter with cash and cash equivalents of $113 million compared to last year's $232 million. Cash less debt at the end of the quarter was negative $210 million compared to $192 million last year.

Moving onto the guidance, I should point out that our outlook for the second quarter and full year of fiscal 2020 does not assume any asset impairment charges or any potential impact from the List 4 tariff increase on apparel and footwear imported from the -- into the US from China and Mexico. Also guidance for revenues and comp sales for the total Company and by segment is included in the supplemental table attached to our earnings release.

For the second quarter fiscal 2020, we expect revenues for the quarter to be up 7% to 8% in constant currency. At prevailing exchange rates, we estimate that currency will be roughly a 3 percentage point headwind on consolidated revenue growth for the quarter. Our gross margin is expected to be up primarily due to IMU improvement from our supply chain initiatives. The SG&A rate is expected to be up compared to last year, primarily due to an increased investment in advertising, as well as continued deleverage in Asia.

We are planning an operating margin for the quarter between 4.5% and 5% with a 20 basis point unfavorable impact form currency. The adjusted earnings per share is planned in the range of $0.27 per share and $0.30 per share, including $0.02 of headwind due to currency. The earnings per share guidance includes $0.03 in accretion due to the impact of the convert transaction and share repurchases. Our adjusted EPS guidance includes an assumption of $1.7 million of cash interest expense and amortization of loan fees related to the convertible debt transaction.

Our tax rate for the quarter is estimated to be 25%. We expect consolidated revenues for the year to be up between 6% and 7% in constant currency. At prevailing exchange rates, we estimate currency to have a 2.5% negative impact on consolidated revenue growth for the year. For the full year, we expect gross margins to be up, due to improved IMUs in both the Americas and Europe, as well as lower logistics and distribution costs in Europe.

The adjusted SG&A rate is expected to be up for the year, due to an increase in investment in advertising, as well as performance based compensation. Our adjusted tax rate for the year is estimated to be 25%. We are planning an adjusted operating margin between 4.8% and 5.2% with minimal currency impact on operating margin, and our guidance assumes that foreign currencies will remain roughly at prevailing rates.

Adjusted earnings per share is planned in the range of $1.19 and $1.30 with a $0.03 headwind from currency. This includes $0.10 in its estimated accretion due to the share repurchases and convert transactions. Our adjusted EPS guidance includes an assumption of $5.3 million of cash interest and loan amortization expense. As a reminder, our prior guidance for the year was $1.09 to $1.21 with the currency tailwind of $0.02. The high end of our new guidance now represents a 33% increase over last year's adjusted EPS.

CapEx for the year is expected to range from $55 million to $65 million to support store openings, key store remodels and investments in our technology infrastructure to support long term growth. Please note that this is down from $108 million in the prior year. The lower CapEx combined with our inventory and working capital management focus are expected to generate improved free cash flow this year even after considering the $46 million EU Commission fine payment we made in the first quarter. The Board of Directors has approved a quarterly dividend of $11.25 per share payable to shareholders of record at the close of business on June 19th, 2019.

With that I will conclude the Company's remarks and open the call up for your questions.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions) And our first question comes from Susan Anderson from B. Riley FBR. Your line is now open.

Susan Anderson -- B. Riley FBR -- Analyst

Hi, good evening. Thanks so much for taking my question. I was wondering if you can maybe --

Carlos Alberini -- Chief Executive Officer

Yes. Hi, Susan.

Susan Anderson -- B. Riley FBR -- Analyst

Talk about the guidance -- hi -- given just the inflection in the back half with a lower guidance in the second quarter. Maybe if you could kind of talk about by region, where you're expecting kind of the acceleration to come from as we look out to the back half? Thanks.

Sandeep Reddy -- Chief Financial Officer

Hi Susan, this is Sandeep. So I think you're right. I mean, I think with the performance that we've had in the first quarter and the guidance that we're providing for the second quarter clearly to see the margin expansion in the year, there's going to be some improvement in the back half. And what I would take you to is, I think from an underlying perspective, the Americas business and the European business is expected to continue being very strong all year. And the only business, where I think we've seen some softness really is the Asia business, where we've definitely taken the numbers down relative to what we talked about last time.

But I think if you think about the full year guidance, the most material impact that we would see is really in the fourth quarter. But last year, we had some pretty material inventory charges because of the level of excess inventory, we were carrying. So as we lapped that -- that should be a help to actually have margin expansion during the back half of the year and that's what's embedded in the guidance for the full year.

Susan Anderson -- B. Riley FBR -- Analyst

Got it. That's helpful. And then maybe just a follow up on Asia. It seems like there's just really weakness across all of the countries there. I guess is it more -- is it -- is there anything more than just macro going on there, I guess, in terms of product acceptance? And then also it looks like that you're expecting some improvement in the back half. So maybe just talk about what's going to be driving that? Thanks.

Carlos Alberini -- Chief Executive Officer

Yeah. Susan, this is Carlos. Hello. I -- Asia is definitely showing some softening, as I said in my prepared remarks and the softening, as you suggested has impacted those three big markets for us. We do not think that this is brand specific. Frankly, when we see the driver of that softening is primarily customer traffic both coming into our stores and visiting websites. So we believe that this is probably goes beyond what is specific to us. Obviously, it's very difficult to speculate what is that is driving that.

There are some comments from people saying well, just the trade war may be having an impact. Definitely the government has made some changes and significant moves in China specifically to motivate the consumer to continue to spend. They have done some things with VAT, reducing the rates for companies from 13% -- from 16% to 13%. So there is some sign that definitely there is incentives going on to try to really reenergize the economy. But it will be very speculative for us to say oh, that's what it is. We have seen that in most cases the traffic is definitely what's driving the changes and this slowdown.

Now that being said, we plan to continue to do what we can control, which is thinking about product. We are doing a lot of things globally to improve product and that includes from penetration trying to emphasize denim assortment, as we said during our last call. We are also putting a lot of effort into customer centricity initiatives and that this again our global initiatives, our team in China specifically has done a great job in growing the CRM database. And we feel that there are opportunities to continue to do that effectively. We have seen also an opportunity with Tmall, and of course we are talking to that team to benefit from those opportunities as well.

And then last but not least is inventory. Last year, we had a major issue with inventories especially in the fourth quarter, we had a significant access that we are trying to work through and we are doing that effectively. But we feel that with the changes and with that excess inventory, we really miss some opportunities especially in China. And we think that we can do a better job in flowing inventory and having the right product at the right time in the right place. And that is -- it's a -- it was tall order, but we think that we have the tools to be able to do that much more effectively going forward.

Sandeep Reddy -- Chief Financial Officer

And Susan just to...

Susan Anderson -- B. Riley FBR -- Analyst

Got it.

Sandeep Reddy -- Chief Financial Officer

Add to your last question on the guidance and the back half improvement. One thing that's going to be happening this year, the Chinese New Year is going to land earlier than last year and that benefit is embedded in our guidance. And that's why in the front half, we are really looking at down low double digits in constant currency and the full year is down high single digits and embedded in that it's a resumption of earlier Chinese New Year.

Carlos Alberini -- Chief Executive Officer

Let me come back, just I have talked quite a bit about China, but I think another area that is -- it's worth pointing out is about Japan's performance. We were up against a phenomenal performance of -- for the first quarter of a year ago in Japan. And we did expect that we were not going to be able to comp those kind of numbers. And sure enough that did happen and some people may look at this and say, wow, that's a disappointment that you couldn't comp. I look at it as a great opportunity, honestly because we now know what we need to do to win in that market. And the way, we won last year was remarkable. It was a collaboration that we did with a group called GENERATIONS and we think that in the past these kind of events and collaborations were more tests to prove a concept.

I feel that now we have the concepts proved and we have proven those time and time again. We had a list of successes doing this kind of collaborations. And we feel that this is going to be part of our business model going forward. So in a way it has been somewhat painful to the numbers and the financial performance this quarter, but I think that those kind of examples are very inspiring to -- to really pave a new path into how we build a business going forward, especially attracting that younger consumer that we keep talking about.

Susan Anderson -- B. Riley FBR -- Analyst

Got it. That's very helpful. And then just really quick on the inventory front. Are you guys still expecting, I guess China and Europe, the excess to be cleaned up by the back half? Maybe if you just talk about kind of how much has been cleaned up so far and kind of where you're at with that? Thanks.

Carlos Alberini -- Chief Executive Officer

Yeah. So let me just start with that. I am very impressed with our teams and I say teams because I think that this required an effort across different channels and across different regions to really address this issue and I think we have made great progress. And when we look at our forecast and we are now running the Company with forecasts in mind as opposed to looking at a rear view mirror and being much more actively looking at what's coming as opposed to what has been. And I think when we look at how we think about turning the -- over the year, the year end, the numbers are very compelling. So I feel that we are in great shape regardless inventory.

Susan Anderson -- B. Riley FBR -- Analyst

Great. Thanks so much. Very helpful.

Sandeep Reddy -- Chief Financial Officer

And Susan just to follow up on your question on timing of when we're going to work through it. I think already in Q1 there was a bit of a sequential improvement to where we finished up in Q4, but we still have more work to do. The material improvement will come in the back half. But I think we -- you can expect to see sequential improvement as we go along.

Susan Anderson -- B. Riley FBR -- Analyst

Great. Thanks so much. Good luck next quarter.

Sandeep Reddy -- Chief Financial Officer

Thank you.

Carlos Alberini -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Omar Saad from Evercore ISI. Your line is now open.

Westcott Rochette -- Evercore ISI -- Analyst

Hi, guys. This is Westcott on for Omar. First, we just want to say congratulations and welcome. We look forward to working with you, Carlos. Big picture kind of question...

Carlos Alberini -- Chief Executive Officer

Thank you. Hi.

Westcott Rochette -- Evercore ISI -- Analyst

In terms of your capital allocation thinking about your store base, your real estate with your digital, as you kind of assess, where you are in the US and Europe, are you looking to continue to expand the store expansion policy particularly in Europe. And how do you think about the balance over the next three years to four years of your store and store expansion policy versus pushing more aggressively in your digital?

Carlos Alberini -- Chief Executive Officer

Yes. Thank you. As I said we opened many, many stores in both Europe and Asia during the last few years, and we feel that we have a big opportunity to improve productivity in a lot of the new space. But that being said we continue to see a lot of open wide space in multiple territories, some of them we are in, some of them we are not in. And I think China's a great example of that. We are in 34 of the top 60 cities, but those 60 cities have more than one million people each. So the opportunity here is tremendous and we are going to be very opportunistic and very careful with the way we look at expansion and how we address new store. So we have no plans to stop store expansion here (ph).

And that being said there is a big opportunity on digital, but we don't see and I want to come back to table some of this answers to when we are ready to talk to you about our strategic planning process. But we -- for now I don't see that getting all those or perfecting that omni-channel experience that I have been talking about is going to be an initiative that is going to require huge amounts of capital. So and that capital can take different forms in some cases maybe CapEx, but in many other cases could be just partnering with companies that do this type of work through subscription models and that could be part of our operating expense structure.

Westcott Rochette -- Evercore ISI -- Analyst

Okay. That's great. Thank you. And a question on Europe. It sounds like you are increasing your wholesale door partners. Is that a new strategy? Or is that something can you talk about how you're approaching the expansion of your wholesale partners in that market and maybe in other markets as well?

Sandeep Reddy -- Chief Financial Officer

So Westcott, this is Sandeep. So I think the story goes back about seven years or eight years because if you remember the sovereign debt crisis back in 2011-'12 when there was a significant contraction in the wholesale distribution, we lost a lot of doors especially in Southern Europe. And over the last few years, I mean we've had five consecutive seasons of double digit growth. The most of the growth in the first few of those seasons, first three, four of those seasons was actually coming from increased productivity again in the existing doors that we had.

But gradually as the health of the business is improving in the Southern European countries, especially we are now seeing opportunities to go into incremental those as well and broaden our distribution and recapture some of the distribution points that we had in the past as well. And that's really what's going on right now. We're still probably down a bit versus that peak, but we're making progress toward getting back there.

Carlos Alberini -- Chief Executive Officer

And I just want to add that I think that this is a testimony to how strong the brand is in all over Europe because this kind of appetite for more distribution only happens when the brand is super strong and the product is absolutely right for the markets, and we are seeing that across the board and especially in Europe.

Westcott Rochette -- Evercore ISI -- Analyst

Great. That's awesome. And just one technical question on China and Mexico. Have you updated or could you update your sourcing exposure to those two markets at this point?

Carlos Alberini -- Chief Executive Officer

Yeah. We are -- I mean we are doing basically what you have been hearing in the market. We are working very actively on this and we are managing the situation the best we can. Shifting sourcing out of China as fast as we can, sharing the impact of tariffs with vendors. We are -- we have very strong relationships that go back many, many years and in some cases, these vendors have some other places, where they are doing business. So we are looking into placing the production with them. In other places, shipping products earlier.

We have been trying to really stay ahead of this issue. And in many cases the vendors were able to react identifying opportunities to adjust prices. We are looking at all pricing throughout and we see opportunities, where we can adjust prices. Of course, we want to be very careful with this because at the end of the day we don't want to impact demand. But we do see pockets of opportunities depending on product categories. And then overall just looking at cost savings opportunity across the board, we are -- we engaged a firm that is helping us with the cost reduction opportunities. And we are looking at multiple areas within the Company. We started with North America first, and after this we're going to Europe with this same type of program. So overall just in the case of Mexico, the numbers are very small, but we are also looking at mitigating exposure there as well.

Westcott Rochette -- Evercore ISI -- Analyst

Okay. And I think a couple of years ago, last number I had was -- 47 was referenced. Can you give a ballpark roughly what the China exposure is?

Carlos Alberini -- Chief Executive Officer

Yes.

Sandeep Reddy -- Chief Financial Officer

Yeah. So I think Westcott, as Carlos mentioned, it's a very fluid situation because we're actively working on making a number of changes as we go along. So I don't think we're going to get into an update at this time. But I think we're working on this process actively.

Westcott Rochette -- Evercore ISI -- Analyst

Okay. Well, thank you very much. Good luck, guys.

Carlos Alberini -- Chief Executive Officer

Thank you.

Operator

Our next question comes from John Kernan from Cowen & Company. Your line is now open.

John Kernan -- Cowen & Company -- Analyst

Good afternoon, Carlos and Sandeep. Thanks for taking my question. And Carlos, congrats on your first, the 100 days back I guess.

Carlos Alberini -- Chief Executive Officer

Thank you.

John Kernan -- Cowen & Company -- Analyst

So you've been busy. So you talked about assessing the cost structure, particularly in Americas and Europe. You were a big part of Guess? when the operating margin structure was significantly higher than it is now obviously, the world has changed a lot since then. But what do you think are the biggest opportunities in the cost structure because both in Europe and in North America? And what do you think a normalized operating margin structure looks like for this business.

Carlos Alberini -- Chief Executive Officer

Yeah. I mean, we have talked about pursuing a double digit operating margin for the Company in medium to long term. So obviously we haven't lost that goal for the Company. And again, this is more like a medium to long term discussion, and I would like to address that when we come back after the summer -- after we have the opportunity to complete our work.

But that being said John, this group that started doing this assessment are already looking at things, and we see opportunities in labor scheduling structures for example. And of course, because we have so many stores, we think that this can be a massive opportunity in terms of payroll in the stores. And the whole idea here is not necessarily to spend less, but to reallocate how we are spending money. So it could be that -- that right now we have x number of hours that are dedicated throughout the day in an even way instead of allocating hours following the traffic patterns into the store. So that just to give you an idea. I have done this kind of work in my prior experiences and with great success. So that's one area. There is definitely in Americas, we see opportunities in sourcing and production as well. We see opportunities in the whole corporate indirect expense. We see opportunities in distribution and logistics though they are not that huge.

But I'm sure that when we go to Europe business given even before we do any assessment, we know that the distribution and logistics opportunity in Europe is very significant even just comparing to what we used to spend versus what we are currently spending to support the business and even comparing that level of spend to best-in-class in the industry to support a business of our size. So I am very encouraged with the preliminary findings and I think that we're going to be very happy with what it does (ph) going through and executing on this plan.

John Kernan -- Cowen & Company -- Analyst

Excellent. Thanks. Europe has had some pressures from the DC in terms of profitability and margins. You did recover a little bit this quarter, but we're still far below where we were a couple of years ago, given some of the cost pressures there. And how should we think about that piece, the margin recovery, just the distributions and logistics, as that DC in Benelux gets going?

Sandeep Reddy -- Chief Financial Officer

So John this is Sandeep. So I think if you look at this particular quarter, we actually improved by 210 basis points. And if my memory serves me right this is the first time in about six quarters that margins have actually gone the other way. And -- and the interesting thing about this was this particular quarter, the margin improvement really came from IMU and leverage from positive comps for the most part, a little bit from markdowns as well. But I think those were the main drivers.

And for the year, we've already said previously that we expect at least 100 basis points of margin improvement from the logistics cost and the distribution center. So I think obviously, you can see that that's not the -- the logistics cost is not the only driver of margin expansion given how we started the -- started the year and the first quarter. So we definitely expect to see margin recovery and improvement this year including the logistics improvement that we talked about.

Carlos Alberini -- Chief Executive Officer

And I think we talked about double digit margins for Europe, right.

Sandeep Reddy -- Chief Financial Officer

Yeah. Exactly. I think longer term, the low double digit margin goal that we gave is there -- it's still definitely within reach. And we won that far away from it a couple of years ago. So I think as we recovered the logistics cost pressures that we're dealing with we're going to get there in a reasonably quick timeframe.

Carlos Alberini -- Chief Executive Officer

Yeah. And I want to add that remember last year in the fourth quarter, we had to face the excess inventory issues that impacted not only Asia, but also Europe. And we feel that we are very well positioned to recapture that margin that we lost last year or this year. So I think all that contributes to margin enhancement. And last but not least, the whole e-commerce business. You know even when that business is growing at a faster rate than the rest of the business, and we are very happy with that. We see a big opportunity as the business gets bigger to expand margins for e-comm as well. So there is multiple opportunities, I think in Europe to really expand operating margins.

John Kernan -- Cowen & Company -- Analyst

Got it. Very helpful. Sandeep just a follow-up to your comment. IMU has been a source of upside to the gross margin. What stage are we in -- in terms of that being a benefit to gross margin going forward. I know you've done some things throughout the supply chain to bring that to improve the IMU. So just wondering how far into that improvement are we?

Sandeep Reddy -- Chief Financial Officer

I think we're really pleased with the progress that we've made on the IMU front over the last couple of years and you've -- we've included that in our guidance for this year as well. And we're very happy with the progress that the team has made. And I think it's going to be an effort that we continue to make as we go forward. Carlos mentioned sourcing and production as areas that we'll continue to look at responses (ph) out of the cost improvement initiatives. So that process doesn't stop. But I think as far as we're concerned, we're always going to keep on focusing on making those improvements, as we go along.

Carlos Alberini -- Chief Executive Officer

Let me just add one more comment here. I think that the -- just looking at what has been done, I think that the Company did an extraordinary job in improving IMU during the last two years or three years. But everything was done through some strategic repositioning of sourcing like taking a program from here and putting it over there and which I think is great. And as a result, we got the improved costing.

But I think that we now can look at a second level of reposition and that is by combining vendor basis between what we do here in America and what we do in Europe. Those two areas are basically operating somewhat independently. And we see a big opportunity when we start looking at our global platform that does sourcing and production together and now leverages vendor relations in a much -- at a much higher level and plans -- just production with a lot more foresight and secures capacity with those vendors and does fabric platforming. So all these are kind of like a next level of operating efficiencies for us to really capitalize on that and continue to see improvements on IMU ultimately.

John Kernan -- Cowen & Company -- Analyst

Got it.

Carlos Alberini -- Chief Executive Officer

And we're working on that.

John Kernan -- Cowen & Company -- Analyst

Thank you. Best of luck guys.

Sandeep Reddy -- Chief Financial Officer

Thank you.

Carlos Alberini -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Dana Telsey from Telsey Advisory Group. Your line is now open.

Dana Telsey -- Telsey Advisory Group -- Analyst

Good afternoon, everyone. Can you take us through...

Carlos Alberini -- Chief Executive Officer

Hi, Dana.

Dana Telsey -- Telsey Advisory Group -- Analyst

Hi, Carlos. Can you take us through a little bit more about tariffs? How you're thinking about it? What it means whether it's China, Mexico and how you are planning? And then also the wholesale business in the US seem to have done very well. What are you seeing there in particular that's driving that strength? Thank you.

Carlos Alberini -- Chief Executive Officer

Yeah. Dana we just addressed tariffs and really I'm afraid that there isn't that much more new that I can tell you. I mean, just we as I said we are managing this very actively. Actually I am personally involved with this issues. I'm going to be in Hong Kong next week meeting with vendors with a whole team. I mean we are doing everything here and I'm excited because it will be my first opportunity to meet our entire current vendor base. So I'm afraid that I can't tell you more. Obviously, we -- as we -- this is a moving target. So just we are placing buys for or production orders for a holiday now and there are opportunities to really move a lot of that -- those orders into other places. So this is good timing for us or for me to be involved.

With respect to wholesale we couldn't be more excited about this. I mean wholesale -- the wholesale business here is a growing business. We have very nice margins. And frankly, we think that we are just getting started. We have -- with this generation Z move, we are seeing that retailers that in the past wouldn't have even considered us. They are super excited to do a lot of business with us. And just two great examples are Urban Outfitters and Pacific Sunwear. And we have developed a very nice business with both of them and they are super happy and they want to continue to expand the relationship. But also as the product has performed extremely well in the '90s as well. So even the -- our traditional wholesale base is also doing very well with our brand.

And just -- I have to tell you, we just did a pop up in Fred Segal, who would have thought that Guess? was going to be represented in Fred Segal, you know just -- that is a type of store that normally would only take luxury type of brands. So -- so we are very excited about the wholesale business and we think that there is a lot more that we can do even just thinking about exclusives and thinking about, how we really leverage these relationships that we have with on partnerships with key celebrities. The whole idea with Jennifer Lopez is -- is something that our retail partners are also super excited about. She's such a huge personality and so well known all over the world and so relevant for our customer, our Latino customers is a big -- it represents a big part of our customer base. So having somebody like that representing the brands is just awesome.

Dana Telsey -- Telsey Advisory Group -- Analyst

And then just on the expense side Carlos or Sandeep. As you think about the deleverage of expenses in Asia? How are you thinking about that for the remainder of the year? And Carlos you mentioned more cost reductions to come using data analytics. When do we see that? How big an opportunity is that in size or what it could mean to the bottom line? Thank you.

Sandeep Reddy -- Chief Financial Officer

So -- so Dana I'll take the first part definitely on the deleverage in Asia. I think that was the major driver of the first quarter expense deleverage, and I think as we go into the second quarter that's another expected driver again of the deleverage. And I think the problem we've had is that the decline in comps has been very steep in the first quarter and second quarter and a big inflection versus where things were trending throughout last year. So we're taking actions to address the cost structure.

But I think in terms of speed in which is going to happen within Asia, it's probably going to be -- it's going to be a little bit slow relative to the amount of comp degradation that we are anticipating in the guidance. So the pressure is expected to be there within Asia from a deleverage standpoint. But I think from a cost opportunity across the Company, the total Company, there are a number of things that we're working on and I think Carlos will touch on that.

Carlos Alberini -- Chief Executive Officer

Yeah. I think and it's not just cost reductions. When we talk about data analytics, I talk about just making sure that we use customer data in the right way to perfect personalized marketing, which is something that we will be working on and we are already doing some testing. There is also a lot that we can do on allocation and fulfillment, and we are talking to a company that again, I have used in the past to really optimize how we place inventory and where we place it and how we fulfill. We have opportunities in logistics and distribution. Frankly, this is huge both in North America and in Europe to use data to do a better job in the way we service the business. So there are -- I mean, right now, artificial intelligence and machine learning is like a big thing to be able to do a better job and become more efficient. And we are trying to really partner up with people that have done this very successfully to just bring those benefits into the Company. So it's tough right now to size, how big that opportunity is, but I can tell you Dana this is very meaningful and very significant.

Dana Telsey -- Telsey Advisory Group -- Analyst

Thank you.

Carlos Alberini -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Janet Kloppenburg from JJK Research Associates Incorporated. Your line is now open.

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

Hey, Carlos.

Carlos Alberini -- Chief Executive Officer

Hi.

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

It sounds like you put a great plan together. It sounds very exciting.

Carlos Alberini -- Chief Executive Officer

Thank you. Hi, Janet.

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

Just wondering maybe you could elaborate a little bit on this comparison in Asia? I guess you had a collaboration last year. How long will that comparison continue that collaboration what tale does it have. And I know your guidance on comps in Asia for the second quarter, but do you expect that there is some opportunity for comps to inflect in Asia in the second half of the year?

And secondly, in terms of the operating margin improvement. I know you've talked a lot about cost reduction, but I wonder, as you analyze the productivity -- historical productivity of the store base if perhaps that is an equal or greater opportunity to drive productivity there and -- and boost the operating margins perhaps you could talk about that? Thank you.

Carlos Alberini -- Chief Executive Officer

Yeah. Let me start with your second question Janet and then Sandeep maybe he can talk about the comps with the history. So I completely agree with you Janet. Frankly, when we look at how we can become more profitable in the Company, cost reductions obviously are a very compelling opportunity for us, but more compelling is the whole productivity opportunity. And our sales per square foot in the Americas has -- has declined very significantly over the last few years and is turning for the better in the last maybe four quarters. But that being said we are not where we want to be not even close.

And I think that for me that it starts with product. And this is going back to those product categories that the Company was always very strong at like denim, like handbags, like accessories, the men's business is doing pretty well, but we see more opportunity with that. So just if we can really perfect the product, we have a much better opportunity to increase productivity and with that because we own the stores, we own the fixed cost structure, we can make a lot more money. Our margins are very nice. Frankly, I don't think that the product margins are an issue here obviously, maybe we'll have some opportunities and I -- maybe as we said earlier. But ultimately the big thing here is to do more with less, just create an opportunity for higher productivity.

And the same thing is true in Europe especially with the new stores because there has been -- all these new stores that are operating very well and pretty much in line with the original expectations when those stores were opened, but the productivity is lower than the comp base. So we see opportunities there as well. So just I couldn't agree with you more. But part of the issue here too is to put the product in the right place, right at the right time similar to what I was saying about allocation and planning just how we use the inventory in those stores is also important. And do you want to take the comps.

Sandeep Reddy -- Chief Financial Officer

Yeah. Sure. And...

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

Just one question, Carlos. Do you think that the tools that you have to manage that inventory and the data analytics that you're talking about, how soon or effective could those tools become in driving productivity?

Carlos Alberini -- Chief Executive Officer

Yeah. No, the tools are not here. I mean, we are -- I mean we have some tools of course, we have planning and allocation systems. But what I'm talking about it would take some time but most of these applications sit on top of our IT infrastructure. So it's not something that we are talking about going and implementing SAP here. It's more about bringing these applications that sit on top of what we already have. So the implementation time is significantly shorter. So we're talking about just I think we're not going to see much of this -- this year, but definitely next year for sure.

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

Thank you.

Sandeep Reddy -- Chief Financial Officer

So, Janet...

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

(multiple speakers) yeah.

Sandeep Reddy -- Chief Financial Officer

Yeah. Janet, this is me (ph) Sandeep. How are you doing?

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

All right. Hi, Sandeep.

Sandeep Reddy -- Chief Financial Officer

So Janet I think your question was really on, I think specifically about the partnership that we had in the first quarter last year that actually had a big impact on us -- on comps that was in Japan. It was with the GENERATIONS band and that actually started off in the first quarter and actually spilled into the second quarter as well. So there is an impact both in Q1 and Q2. And I think when you look at the full year guidance, we actually got some improvement baked in -- in the back half because our full year guidance is down to the high single digits, even though the front half is down low double digits. And I think -- but that's mostly driven by the timing of Chinese New Year because Chinese New Year is going to be earlier this year than last year and that's going to benefit the fourth quarter. So I think that's really the high level of the guidance cadence for Asia.

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

Okay. Thank you so much.

Carlos Alberini -- Chief Executive Officer

Thank you, Janet.

Sandeep Reddy -- Chief Financial Officer

Thank you. I think this is probably the last caller question we could take because we're running out of time. So operator?

Operator

And we have no further questions in queue. At this time, I'll turn the call back to Carlos for closing remarks.

Carlos Alberini -- Chief Executive Officer

Thank you. Well, thank you all for joining us today. I believe that we have tremendous opportunities as a Company. So I think we can deliver significant shareholder value and we remain highly committed here to optimizing the business and we want to drive strong revenue growth, healthy profit expansion and we think that we are well positioned to do so. So we look forward to sharing with you our strategic business plan, as we said at the end of the summer. Thanks again, for participating and have a great rest of the week and weekend. Thank you so much.

Operator

Thank you. Ladies and gentlemen, this concludes today's teleconference. Thank you for participating. You may now disconnect.

Duration: 69 minutes

Call participants:

Carlos Alberini -- Chief Executive Officer

Sandeep Reddy -- Chief Financial Officer

Susan Anderson -- B. Riley FBR -- Analyst

Westcott Rochette -- Evercore ISI -- Analyst

John Kernan -- Cowen & Company -- Analyst

Dana Telsey -- Telsey Advisory Group -- Analyst

Janet Kloppenburg -- JJK Research Associates Incorporated -- Analyst

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