Guess? Who’s Shares Are Soaring After Earnings?

Andrew Klips |

Shares of Guess?, Inc. (GES) have leapt ahead in extended trading on Wednesday after the apparel and accessory maker posted better-than-expected second-quarter figures and delivered a solid outlook for the year.

For the quarter ended August 3, Guess reported net revenue of $639.0 million, up 0.6 percent from $635.4 million in the year earlier quarter.  Net revenue was $39.87 million, or 47 cents per share, down from $42.9 million, or 49 cents per share, in the year prior quarter.  Adjusted earnings, which exclude restructuring charges and other one-time items, were $44.3 million, up 3.3 percent from $42.9 million last year.  On a per share basis, adjusted earnings in the latest quarter totaled 52 cents per share.

Wall Street was expecting adjusted earnings of only 36 cents per share on revenue of $622.9 million.

Sales in North America increased 0.5 percent in the second quarter to $254.3 million.  Same-store sales decreased by 2 percent as the company operated 4 less stores in the U.S. and Canada (507 in total now).  In the difficult European environment, sales improved 1.4 percent to $250.4 million.  Sales in Asia weighed on overall growth, decreasing 1.5 percent to $65.9 million.   Guess operates 338 retail stores in Europe, Asia and Latin America.  Wholesale sales also slipped, dropping 0.7 percent to $41.4 million.   

Selling, general and administrative expenses were trimmed from $194.26 million to $181.63 million.  The current quarter also included a restructuring charge of $6.13 million.

Gross profit was down from $251.56 million to $248.53 million.

"We are very encouraged by the improvements in the trends of our North American Retail business in the second quarter, reflecting the enhancements in our product assortments.  However, the economic climate in Southern Europe continues to be challenging and we are beginning to see a slowdown in China,” said Paul Marciano, chief executive at Guess.

Looking ahead, Guess sees third quarter sales in the range of $610 to $620 million and earnings between 34 cents and 38 cents per share.

For the full fiscal year ending February 1, 2014, the company forecasts earnings in the range of $1.70 to $1.92 per share on revenue of $2.56 billion to $2.59 billion.  Analysts were expecting profits of $1.79 per share on sales of $2.58 billion.

Shares of GES have been getting hammered in August, falling from highs of $34.36 early in the month to as low as $27.00 in Wednesday trading before closing at $27.31.  The earnings report was just the spark the stock needed to rise from grossly oversold levels, shooting up by 19 percent to $32.33 in action after the closing bell.  At $32, shares are ahead about 32 percent in 2013.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
CBTC CBT Financial Corp 28.94 0.00 0.00 1
GES Guess? Inc. 13.95 0.04 0.29 748,597


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