US fashion firm Guess Inc has lowered its full-year earnings guidance after booking a decline in second-quarter net profit. The company blamed the decline on the impact of a weaker euro as well as negative same-store sales, higher occupancy and selling costs in Europe, and higher spending on advertising and marketing.
Net earnings for the three months ended 28 July tumbled 30.5% to US$42.9m. or $0.49 per share, from $78.3 million or $0.84 per share in the comparable quarter last year. On average, twelve analysts polled by Thomson Reuters expected the company to report earnings of $0.50 per share. While earnings from operations slumped 38.7% to $57.3m.
Net sales fell 6.2% to $635.4m, from $677.16 million in the prior-year quarter, while eleven analysts expected revenues of $629.95 million for the quarter. Revenues at the North American retail business slipped 3.1% to $253m. Revenues in the North American wholesale segment declined 5.1% to $41.6m. Revenue in Europe fell 14.5% to $246.9m, but Asian revenues jumped 20.9% to $66.8m.
CEO Paul Marciano said ”The second quarter was both rewarding and challenging for us. While store traffic remained down in North America, our strategy to elevate our women’s business appears to be working. We are now focused on driving improvements in accessories, which has become increasingly competitive, and are also developing plans to refine our North American strategy where necessary to remain competitive.
“Our European business remained stable, as we grew in newer markets in the north and east, while economic conditions continued to affect consumers, particularly in the south. We also posted solid double-digit growth in Asia and China has continued to exceed our expectations.”
Looking ahead, to the third quarter of fiscal 2013, earnings per share are expected to be in the range of $0.42 to $0.46 and consolidated net revenues are expected to range from $620 million to $630 million. Analysts currently expect the company to report earnings of $0.64 per share on revenues of $670.67 million for the third-quarter.
For the fiscal year ending February 2, 2013, earnings per share are expected to be in the range of $2.15 to $2.30 and consolidated net revenues are expected to range from $2.62 billion to $2.65 billion. Previously, the company expected fiscal 2013 earnings to be in the range of $2.50 to $2.65 per share and consolidated net revenues in the range of $2.70 billion to $2.74 billion. Analysts now expect the company to report earnings of $2.59 per share on revenues of $2.71 billion for fiscal 2013. Whilst revenues are forecast to be in the range of $2.62bn to $2.65bn.
Further, the company also announced that its Board of Directors has approved a quarterly cash dividend of $0.20 per share on the company’s common stock. Thedividend will be payable on September 21, 2012 to shareholders of record at the close of business on September 5, 2012.