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Guess? Posts Upbeat Q2 Results, But Issues Weak Forecast

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Guess?, Inc. (NYSE: GES) reported better-than-expected results for the second quarter. However, the company issued a weak forecast.

The Los Angeles, California-based company reported quarterly net earnings of $18.3 million, or $0.21 per share, compared to $22.0 million, or $0.26 per share, for the year-ago quarter.

Its total net revenue dropped 10.2 percent to $546.3 million from $608.6 million. However, analysts were expecting earnings of $0.15 per share on revenue of $537.61 million.

The average estimate among 10 Estimize users was for earnings of $0.16 per share and revenue of $542.32 million.

Revenue from retail stores and e-commerce sites in the Americas fell 4.7 percent to $232.5 million in the second quarter, while revenue from Europe segment dropped 15.3 percent to $199.4 million. Net revenue from Asia segment fell 11.7 percent to $56.7 million in the quarter.

Net revenue from Americas Wholesale segment dropped 15.4 percent to $32.4 million, while licensing segment net revenue slipped 5.5 percent to $25.3 million in the second quarter.

Its operating margin in the second quarter shrank 10 basis points to 4.8 percent, from 4.9 percent in the year-ago quarter.

Comparable store sales, including e-commerce sites in the U.S. and Canada, dropped 2.8 percent in U.S. dollars.

Paul Marciano, Chairman of the Board and Chief Creative Officer, said, "I am pleased to report that second quarter results were better than our expectations. In our Americas Retail business, comp sales ended flat for the quarter in constant currency, mainly driven by continued improvement in the performance of the womens' category. Our e-commerce business continued to experience solid top-line growth of 20%."

For the third quarter, the company expects earnings of $0.08 to $0.12 per share, and revenue to drop 4.5 percent to 3.0 percent in constant currency. Analysts projected earnings of $0.18 per share.

For the fiscal year ending January 30, 2016, Guess projects earnings of $0.89 to $1.02 per share and net revenue to fall 1.5 percent and 0.5 percent in constant currency. Analysts expected earnings of $0.95 per share.

Guess? shares fell 5.25 percent to $20.20 in the after-hours trading session.

Posted-In: profitEarnings News Guidance


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