WASHINGTON (dpa-AFX) - Apparel retailer Guess? Inc. (GES) on Tuesday reported a drop in profit for the third quarter, as revenues declined 12 percent. Earnings for the quarter trumped Wall Street estimates, while revenues were in line with expectations.
Guess' third-quarter profit dropped to $12.4 million or $0.15 per share from $20.8 million or $0.24 per share last year. On average, 11 analysts polled by Thomson Reuters estimated earnings of $0.11 per share for the quarter. Analysts' estimates typically exclude special items.
The company said the negative impact of currency on earnings in the latest quarter was about $0.13 per share.
Revenues for the third quarter declined 11.7 percent to $521.0 million from $589.8 million a year ago. Analysts had a consensus revenue estimate of $521.0 million for the quarter.
Americas retail revenues dropped 7 percent, while wholesale revenue decreased 12 percent. For the quarter, revenue at European business segment fell 15 percent, while Asia revenues decreased 17 percent.
Commenting on the results, CEO Victor Herrero said, 'Our European retail business was especially strong with a double digit comp sales increase for the quarter for the first time in five years.'
Los Angeles-based Guess has struggled with the effect of the strong dollar for the past several quarters. The company generates a large chunk of its sales overseas, especially in Europe. Intense competition in key markets, weak traffic and soft consumer sentiment has also impacted Guess negatively.
For the fourth quarter, the company expects earnings of $0.53 to $0.62 per share and revenues to range between a decline of 1.5 and an increase of 1.5 percent. Analysts currently expect earnings of $0.59 per share and revenues to slip 5 percent for the quarter.
For the full year, Guess now expects earnings of $0.93 to $1.02 per share and revenues down 9.5 to 8.5 percent, compared to its prior earnings outlook of $0.89 to $1.02 per share and revenues to drop 9 to 8 percent. Analysts currently expect earnings of $0.96 per share and revenues to drop 8.7 percent for 2016.
GES closed Tuesday's trading at $19.54, up $0.41 or 2.14%, on the NYSE. The stock further gained $0.76 or 3.89% in the after-hours trade.
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