Guess 4Q Profit Rises 19% But Outlook, US Operations Weak
Last Update: 3/16/2011 4:31:11 PM
DOW JONES NEWSWIRES
Guess Inc.'s (GES) fiscal fourth-quarter earnings rose 19% on continued strength
overseas, but the apparel maker's comparable sales at its larger U.S. retail
business declined and it gave a weak outlook for earnings this year and for the
current quarter's results.
Shares were down 6.4% at $41.17 after hours. Through the close, the stock has
fallen 5.9% in the last year.
In the current quarter, Guess forecast earnings of 41 cents to 44 cents a share
on revenue of $555 million to $570 million. Analysts surveyed by Thomson Reuters
predicted 61 cents a share on $596 million in revenue.
For the year, Guess projected $3.30 to $3.50 a share in earnings and $2.72
billion to $2.82 billion in revenue, while analysts expected $3.50 a share and
$2.75 billion, respectively.
The company's expansion in Asia and Europe has fueled revenue growth in recent
quarters, after it was also a key source of support during the recession. The
company's strategy continues to aim at developing new markets, and Chief
Executive Paul Marciano has said many regions have more potential for its Guess
business.
Also Wednesday, Guess said its board has authorized stock repurchases worth up to
$250 million of its common stock. The new authorization includes $85 million
remaining under the company's $200 million repurchase program.
For the quarter ended Jan. 29, the company posted a profit of $103.3 million, or
$1.11 a share, up from $86.6 million, or 93 cents a share, a year earlier. The
latest period included a benefit of 5 cents a share from an assessment of its
North American loyalty program breakage, while the prior-year period included
retail store write-downs. Revenue increased 18% to $756.9 million.
In November, the company forecast earnings of $1.02 to $1.06 a share on revenue
of $710 million to $730 million, upbeat compared with analysts' views at the
time.
Gross margin fell to 44.4% from 46%.
Same-store sales in North America fell 1.1% in U.S. dollars, as retail revenue
rose 9.4% on store openings. In Europe and Asia, revenue jumped 33% and 23%,
respectively.
Revenue at the North American wholesale segment decreased 5.2%.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com
(END) Dow Jones Newswires
March 16, 2011 16:31 ET (20:31 GMT)
