Guess gives bullish outlook, shares up

SAN FRANCISCO (Reuters) - Guess Inc (GES.N) on Thursday gave a bullish second-quarter outlook that sent shares of the international fashion brand up 5 percent, despite first-quarter net income that fell by nearly a third.

Challenging economic conditions that have crimped consumer spending around the world would likely persist "for some time," said Chief Executive Paul Marciano, who attributed results to more aggressive inventory management and reduced spending, including fewer store openings.

Results, which beat Guess' own projections, were particularly strong, Marciano said, given the environment in which "consumers still continue to stay away from the malls" and currency fluctuations hurt international sales.

"We do not believe the economic crisis is over, but we are beginning to experience a more stable and predictable environment," added Marciano.

The company has not given a fiscal 2010 outlook since last quarter due to limited visibility.

The retailer and wholesaler known for its denim said first-quarter net profit fell 32 percent to $32.5 million, or 35 cents per share, from $47.8 million, or 50 cents per share, a year earlier.

Analysts, on average, had been expecting earnings of 29 cents per share, according to Reuters Estimates.

Revenues fell 10 percent to $441.2 million, the company said, but on a constant currency basis revenues were flat.

The company had been expecting earnings of 26 cents to 30 cents per share on revenue of $425 million to $445 million.

Guess has been expanding into European countries outside of Italy as well as emerging markets like Asia and Latin America. Its diverse markets have allowed the company to lower overall risk in the downturn.

Sales in the company's wholesale channel fell 12 percent -- due in part to department stores cutting back on inventory -- while the larger retail division saw a 2 percent decrease. In Europe, revenue fell 18.5 percent, the company said.

Selling, general and administrative costs fell by 11 percent and profit in the quarter was also boosted by a slightly lower tax rate -- 33 percent versus 36 percent a year earlier.

Guess, which has historically given conservative outlooks, said it expects second-quarter earnings to range between 42 cents and 45 cents per share, above the 37 cents per share expected, on average, by Wall Street.

Revenue on a percentage basis is expected to fall in the mid-teens, the company said.

Shares rose 5.2 percent to $28.45 after closing at $27.04, down 3 percent, on the New York Stock Exchange.

(Reporting by Alexandria Sage; Editing by Phil Berlowitz)