UPDATE 2-Guess profit beats in quarter, 2008 view lowered

* Q3 EPS 69 cts beats Street's view of 63 cts

* Lowers 2008 EPS view to $2.27 to $2.32

* Shares up nearly 2 pct in after-hours trading (Adds analyst's quote, byline)

By Alexandria Sage

SAN FRANCISCO, Dec 4 (Reuters) - Guess Inc (GES.N) reported a 10 percent rise in quarterly net income on Thursday, beating Wall Street estimates, but the apparel retailer and wholesaler cut its revenue and profit outlook for 2008, citing little visibility into the holiday season.

Although European sales were robust, fewer shoppers in its stores and promotions by rivals dampened the company's North American business and Chief Executive Paul Marciano called the retail environment "challenging."

Still, Marciano said the denim for which the company is known -- "our DNA," he called it -- was priced correctly in the market as shoppers have begun to shy away from premium, high- priced denim.

"We are very aware of the surroundings," Marciano said in a conference call with analysts. "We will adapt to be more aggressive or cautious when and where we need to be."

Needham & Co analyst Christine Chen said the lowered outlook did not overly trouble investors, who have seen the company outperform rivals this year in a difficult environment.

"This wasn't a slashing," she said. "Given their tendency to be overly conservative even when business is good, there is some hope ... they can attain it if things get worse and if things get better they can beat it."

Guess, which sells trendy clothing and accessories for women and men in its U.S. and international stores, said third- quarter net income rose to $64 million, or 69 cents per share, from $58.3 million, or 62 cents per share, a year earlier.

That beat analysts' average expectation of 63 cents per share, according to Reuters Estimates.

Sales rose 12.5 percent in the quarter to $527.9 million, helped by growth in all segments.

Its retail stores saw 12 percent sales growth even though same-store sales dropped 0.8 percent. Wholesale sales rose 2.4 percent, while European revenue rose 17 percent and licensing revenue rose 24.7 percent.

But operating margins fell, due to negative same-store sales growth in North America -- where the company has 422 stores -- and higher costs in Europe from infrastructure investments.

Guess said its denim, which represents nearly a third of its North American apparel business, was priced correctly, with premium jeans selling for around $150 on average and lower- priced styles at around $98.