WRAPUP 1-Euro worries stalk Guess, whose shares fall 7 pct

* Guess Q2, full-year views below Street

* Guess shares fall 7 pct after hours on euro worries

* J Crew 2010 EPS view tops Street, shares up 1 pct

By Lisa Baertlein and Nivedita Bhattacharjee

LOS ANGELES/BANGALORE, May 27 (Reuters) - Shares of apparel retailer Guess Inc (GES.N) fell 7 percent in after-hours trade on Thursday as investors worried about its dependence on Europe, where a debt crisis has dragged down the euro.

Guess, which is known for its sexy blue jeans ads and conservative profit forecasts, said it expects second-quarter earnings of 65 cents to 68 cents a share. That was far below analysts' average estimate of 77 cents a share, according to Thomson Reuters I/B/E/S.

The company's European business includes the Middle East and accounted for 35 percent of revenue and 48 percent of earnings for the fiscal year ended Jan. 30, according to regulatory filings.

Guess recently attributed better-than-expected quarterly results to strength in Europe.

Company President and Chief Operating Officer Carlos Alberini, who is leaving Guess on June 1 to become co-chief executive of Restoration Hardware, said "the euro has now weakened significantly below our planning assumptions. If this trend persists, this would impact both our earnings translation and our margins negatively."

Alberini added that the company updated its guidance "assuming that the euro will not rebound, and will experience further softness."

Guess, whose ads once featured buxom model Anna Nicole Smith, also cut its full-year profit outlook to a range of $2.80 to $2.85 per share due to the weakening euro. Analysts, on average, were looking for $2.99 a share.

Wall Street Strategies analyst Brian Sozzi said forecasts from Guess are typically seen as beatable but that its exposure to Europe has ushered in uncertainty.

"I think the move in the stock reflects the notion that the guidance, this time around, may be about right," Sozzi said.

Wedbush Securities analyst Betty Chen said the company's forecast still points to underlying strength in its business.

"They are assuming a bigger (foreign exchange) headwind and the charges on management departure costs. Without these the new guidance would be much better than the original guidance," Chen said.

FIRST-QUARTER PROFITS RISE

Guess and J Crew Group Inc JCG.N on Thursday posted first-quarter earnings that topped Wall Street's view as shoppers splurged on full-price clothing and jewelry.

Guess, which competes with Levi Strauss & Co, VF Corp (VFC.N) and True Religion (TRLG.O) among others, said first-quarter earnings rose 55 percent to $50.3 million, or 54 cents per share. [ID:nN23131519]

First-quarter profit at J Crew more than doubled to $44.7 million, or 68 cents per share, on fewer markdowns and promotions. [ID:nN27190809]

J Crew, which counts first lady Michelle Obama among its customers, issued a second-quarter profit forecast that matched analysts' view. It boosted its 2010 outlook to $2.35 to $2.45 per share, above analysts expectations of $2.34 a share.

The company, which caters to urban professionals willing to pay extra to make subtle fashion statements, opened its first bridal boutique in Manhattan on Thursday.

Shares of J Crew rose just over 1 percent in extended trade.

"For J Crew, not having an European exposure is a benefit right now," Chen said.

Year to date through Thursday, shares of Guess and J Crew were down about 10 percent and 2 percent, respectively. (Reporting by Lisa Baertlein; Editing by Steve Orlofsky)