* Forecasts 2nd-qtr sales $620-$635 mln vs est $618.4 mln
* First-quarter adj earnings/share $0.14 vs est $0.08
* Sales down 5 pct, in line with Wall Street expectations
* Shares up 10 pct after market
By Siddharth Cavale
May 30 Apparel retailer Guess Inc
forecast current-quarter sales above Wall Street's estimates
after reporting a higher-than-expected quarterly profit, sending
its shares up 10 percent in trading after the bell.
The retailer forecast total second-quarter sales of $620
million to $635 million, which beat analysts' average estimate
of $618.4 million.
"So far in the second quarter, comparable-store sales have
improved (in North America) and are roughly flat for the quarter
to date," Russell Bowers, Chief Financial Officer of North
American Retail said on a post earnings call with analysts.
Piper Jaffray & Co analyst Erinn Murphy said the signs of
improving trends in North American retail as new product
initiatives unfold are encouraging for potential margin
recovery. She has the stock as a 'top pick' with an "overweight"
The company, however, cautioned cold weather conditions in
Europe were a cause for concern.
"What we have not expected has been ... the drastic weather
conditions that continue to beat Europe like we have not seen
for some time in a half century. The weather has been a big
factor," Chief Executive Paul Marciano said. France and Italy
were the most affected, he added.
The company said it expects sales in Europe to decline in
the low-single-digit percentage range in the second quarter,
assuming the Euro remained at its current rate. It expects
Europe sales to improve in the third quarter, which begins in
FIRST-QUARTER PROFIT BEATS
First-quarter net income fell to $9.9 million, or 12 cents
per share in the period ended May 4, from $26.6 million, or 30
cents per share, a year earlier.
Excluding restructuring charges, the company earned 14 cents
per share. Analysts had expected earnings of 8 cents per share.
Sales fell 5 percent to $549 million, but were in line with
Wall Street's expectations.
Sales in Europe, which contributes about a third to the
total revenue, fell 13 percent in the first quarter, hurt by
cooler weather conditions.
"The (decline in Europe) was driven by lower wholesale
shipments as well as negative comp-store sales that were down in
the high single digits," interim Chief Financial Officer Nigel
Kershaw said on the call.
North American retail revenue fell 5 percent.
Sales in Asia, however, offset some of the slowdown and rose
10 percent to $71.1 million.
Guess shares closed at $29.35 on the New York Stock Exchange