US: Guess Q3 profit slumps amid economic pressures
- Q3 profit slumped 44.7% to $36.6m
- Revenue slipped 2.2% to $628.8m
- Full-year earnings guidance lowered to $2.05-$2.15
US fashion firm Guess has reported a 44.7% decline in third-quarter net profit after economic pressures weighed on consumer confidence, hurting sales in the US and Europe.
Net earnings slumped to US$36.6m for the three months ended 27 October, compared to $66.3m last year.
Revenue edged down 2.2% to $628.8m, compared to $642.8m the same period last year, while comparable store sales fell 6%. In constant dollars, total net revenue climbed 1.2%.
North American retail revenues slipped 1.3% to $262.1m, compared to $265.6m the prior year. In Asia, net revenue increased 15.5% to $74.8m against $64.8m last year, while revenues in Europe declined 8.3% to $202.6m compared to $221m the year before.
The fashion firm said North American wholesale revenue rose 1% to $57.9m, against $57.3m last year, while licensing revenue decreased 7.6% to $31.5m compared to $34m the prior year.
CEO Paul Marciano said: "Third quarter earnings were consistent with our guidance but fell short of our operational goals, as economic pressures impacted consumer confidence in most of our markets.
"Our European business was stronger at the beginning of the quarter, though business softened toward the end of the period. We posted solid double digit growth in Asia.
"In North America, our key strategies remain relevant as we focus on driving traffic to the stores through enhanced customer engagement initiatives and elevating the brand with quality."
As a result, Guess has lowered its full-year earnings per share guidance to range from $2.05 to $2.15, compared to earlier forecast of $2.15 to $2.30.
Earlier this month Guess announced the resignation of chief financial officer Dennis Secor and chief operating officer Michael Prince. The company, which operates 511 stores across the US and Canada, said it will not replace the COO position.
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