WASHINGTON (dpa-AFX) - International fashion house Guess?, Inc. (GES) said Tuesday after the markets closed that it swung to a first quarter profit, as better costs control helped offset an 8.4% drop in revenue.
The company's quarterly earnings per share came also in above analysts' expectations, but its quarterly revenue fell short of analysts' forecast. At the same time, the company gave a weak outlook for the second quarter, but raised its full year outlook.
Paul Marciano, Chief Executive Officer of Guess?, said, 'Overall first quarter results were better than our expectations, mainly driven by tight expense management. In North America, we saw improvements in the women's category, and Marciano delivered another quarter of good performance with comp sales up in the mid-single digits. Our e-commerce business continued to experience solid top-line growth of almost 14%. In Europe, our retail stores performed above expectations and delivered positive comps.'
Guess shares are currently losing 0.80% in after hours trading after closing the day's regular trading session at $18.65, up $1.09 or 6.21%. The shares trade in a 52-week range of $16.61 to $28.82.
Guess has been struggling for the past few quarters, with intense competition in key markets, weak traffic and soft consumer sentiment. The strengthening of the U.S. dollar is also hurting its results, as the company generates a large chunk of its sales overseas.
For the first quarter ended May 2, 2015, the Los Angeles-based company reported net income of $3.3 million or $0.04 per share, compared to a net loss of $2.1 million or $0.03 per share for the year-ago quarter.
On average, 12 analysts polled by Thomson Reuters expected the company to report a loss of $0.05 per share for the first quarter.
Total net revenue for the first quarter fell 8.4% to $478.82 million from $522.54 million in the same quarter last year. In constant currency, first quarter net revenue remained flat with last year. Twelve analysts had a consensus revenue estimate of $483.80 million for the first quarter.
For the first quarter, North American Retail revenues decreased 6.2% to $214.2 million; retail same-store sales including e-commerce declined 5.9%. North American Wholesale revenues fell 5.2% to $37.3 million.
European revenues dropped 13.7% to $137.4 million in the first quarter. European revenues decreased 7.5% in constant currency.
Asian revenues decreased 8.7% to $64.0 million in the first quarter. In constant currency, Asian revenues fell 6%.
Looking forward to the second quarter, the company forecasts net revenue decline between 13% and 11% and earnings of $0.12 to $0.16 per share. Analysts currently expect the company to earn $0.18 per share on revenue decline of 8.4% for the second quarter.
For the fiscal year ending January 30, 2016, the company now forecasts net revenue decline between 8.5% and 6.5% and earnings of $0.86 to $1.02 per share. Previously, the company forecast net revenue decline between 9% and 7% and earnings of $0.75 to $0.95 per share. Analysts currently expect the company to earn $0.87 per share on revenue decline of 7.0% for the fiscal year 2016.
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