US apparel retailer Guess Inc has booked a drop in third-quarter earnings and cut its full-year sales forecast, on the back of an expected higher fall in European revenues.

Net earnings fell to US$34m in the three months ended 2 November from $36.6m in the prior year period. On an adjusted basis, the company earned 42 cents per share.

Sales were down 2.4% to $613.5m from $628.8m a year earlier. In Europe, revenues fell 0.8% to $200.9m, while North America sales dropped 3% to $53.6m. In Asia, revenues slid 3% to $72.7m.

CEO Paul Marciano said he was pleased to report sales within the range of its expectations and profitability "at the high end" of its expectations. Nonetheless, he warned that the economic climate in Europe will remain "challenging".

"We will continue to plan our business cautiously given the uncertain environment," he added.

As a result, the company cut its full-year sales forecast to $2.55bn-$2.57bn from $2.56bn-2.59bn previously. Earnings per share is expected to be in the range of $1.82-$1.92.