May 29 Apparel retailers Express Inc
and Guess Inc forecast disappointing profits for the
current quarter as a revival in consumer spending takes longer.
Express warned it could post a loss in the current quarter
amid high Spring inventory and slow traffic, and said it would
shut about 50 stores in the next 36 months, sending its shares
down about 11 percent in extended trading.
The company also cut its full-year earnings outlook after
reporting a 9.6 percent fall in first-quarter sales.
A large number of U.S. apparel retailers including Urban
Outfitters Inc, Aeropostale Inc and American
Eagle Outfitters Inc have said their performance has
been hurt due to weak consumer demand and intense competition.
Guess too forecast a current-quarter profit below
expectations after posting a loss for the first quarter as
demand in North America and Europe fell, sending its shares down
3 percent in extended trading.
Guess was concerned about the potential impact of the
turmoil in Russia and Ukraine on its Eastern European business,
Chief Executive Paul Marciano said.
The company's retail sales in North America, its largest
market, fell 4.2 percent while sales in Europe fell 3.8 percent
in the quarter ended May 3.
Guess said it expects a current-quarter profit of 25 cents
to 30 cents per share, below the average analyst estimate of 39
cents per share, according to Thomson Reuters I/B/E/S.
Express said it expects to earn up to 3 cents per share or
lose up to 3 cents per share in the current quarter. Analysts
were expecting a profit of 12 cents per share.
The company said it would cut costs across its operations
and expects annual cost savings of about $18 million.
Guess shares closed at $26.88 on Thursday on the New York
Stock Exchange while Express shares closed at $13.63.
(Reporting by Shailaja Sharma in Bangalore)