Guess Inc. led fashion stocks lower today after the company lowered its annual profit guidance, spooking investors.
Shares of the denim company fell 22.6 percent to $25.95. Late Wednesday, chief executive officer Paul Marciano said store traffic remained down in North America, although the brand’s efforts to elevate its women’s business appeared to be working. Guess now expects diluted earnings per share will range from $2.15 to $2.30, a significant cut from the $2.50 to $2.65 projected in May.
The S&P Retail Index fell 0.6 percent, or 3.93 points, to 638.91, as the Dow Jones Industrial Average dropped 0.9 percent, or 115.30 points, to 13,057.46. Also losing ground were Vera Bradley Inc, down 6.5 percent to $24.85; New York & Co. Inc., 5.8 percent to $3.75; Sears Holdings Corp., 2.7 percent to $54.42, and Avon Products Inc., 2.7 percent to $15.50.
In Europe, stocks were up earlier in the day, but generally closed in the red.
The FTSE MIB in Milan fell 1.4 percent to 14,953.76, followed by the DAX in Frankfurt, which fell 1 percent to 6,949.57 and the CAC 40 in Paris, which dipped 0.9 percent to 3,432.56. The FTSE 100 in London managed to edge up 0.04 percent to 5,776.60.
Markets were initially ahead on the prospect of further stimulus by the U.S.’s Federal Reserve. The effect of those hopes faded throughout the day. Investors are also awaiting the outcome of talks between Germany’s chancellor Angela Merkel and France’s president Francois Hollande, over whether the euro zone will give Greece the time it requires to implement the austerity measures. That belt tightening is required before the country receives the next installment of bailout funds.
The decliners included Mulberry, down 3.7 percent to 13.55 pounds; Yoox, 3.3 percent to 9.28 euros; Carrefour, 2.3 percent to 15.85 euros, and Hermès, 1.3 percent to 221.30 euros.
A few Milan-listed stocks did manage to rise. Safilo gained 1.2 percent to 6.02 euros as Marcolin rose 0.2 percent to 4.35 euros and Brunello Cucinelli gained 3.1 percent to 13.82 euros.
The pound traded for $1.58 while the euro traded for $1.25.