Guess Shares Plunge On Weak Q2, Dim Outlook
Guess (NYSE: GES) shares plunged in after-hours trading on disappointing second-quarter results and an outlook that fell short of expectations.
The branded apparel retailer forecast third-quarter earnings of $0.15 to $0.20 a share, on sales of $590 million to $600 million. Wall Street expected $0.37 a share on sales of $613 million.
Chief Executive Paul Marciano blamed the shortfall on "a soft environment in North America," where weak traffic and heavy promotional activity put stores "under pressure."
Same-store sales in North America fell 5.4 percent and revenue from the segment fell four percent to $244.0 million from $254.3 million a year earlier.
European revenue fell six percent to $235.3 million from $250.4 million, while Asia segment revenue dropped 2.4 percent to $64.3 million from $65.9 million a year earlier.
Operating margin narrowed to 4.9 percent from 10.5 percent in the prior-year quarter. The margin was hurt by falling North American same-store sales and lower wholesale shipments in Europe as well as markdowns in both North America and Europe.
Second-quarter earnings fell to $21.9 million, or $0.26 a share, from $39.9 million, or $0.39 a share, a year earlier. Revenue declined to $608.6 million from $639 million last year.
Wall Street expected earnings of $0.29 a share, on revenue of $617.9 million.
Guess changed hands recently at $23.66, down 7.7 percent.
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