Guess Q4 beats estimates, raises dividend

BANGALORE (Reuters) - Apparel brand Guess Inc's (GES.N) fourth-quarter results topped estimates, as fewer discounts helped margins during the holiday quarter, and the fashion house saw demand in Europe rise.

Guess also increased its quarterly dividend by 28 percent.

"More than half of the revenue increase (for the quarter) was driven by business in Europe which posted a 24 percent top line increase," Chief Executive Paul Marciano said on a conference call with analysts.

Guess, best known for its jeans, also said this year it will reignite plans for growth and invest in retail expansion, and that the company is looking to replicate its success in Europe in Asia.

"While European expansion is important to their story, the opportunities I see exist in Greater China," analyst Brian Sozzi of Wall Street Strategies said.

Guess, which runs its namesake, Guess by Marciano and G by GUESS brands, said its leather jackets, leggings, footwear and other accessories were in demand with customers during the fourth quarter.

"We are a lifestyle company. And that's what I think has been a real surprise and success in Europe," a company executive said on the call.

For the first quarter, the company expects to earn between 46 cents and 48 cents a share. Analysts, on average, were looking at earnings of 46 cents a share according to Thomson Reuters I/B/E/S.

It also expects revenues of $495 million to $510 million.

Analyst Sozzi called the outlook conservative given the company's worldwide brand momentum and the generally cautious nature of the management.

"Investor attention would be better served focusing on the positive factors in the fourth quarter and overall growth profile of Guess," he said.

The apparel wholesaler and retailer's fourth-quarter earnings was $86.6 million, or 93 cents a share, compared with $47.9 million, or 51 cents a share, a year earlier.

Excluding impairment charges, the company earned 96 cents a share, while analysts were expecting a profit of 82 cents.

Revenue rose 14.4 percent to $642.0 million.

Operating margins increased 660 basis points to 18.8 percent.

Shares of the Los Angeles, California-based company were up 1.5 percent at $47.40 after the bell. They had closed at $46.68 Wednesday on the New York Stock Exchange.

(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Jarshad Kakkrakandy)