By  on August 26, 2010

Guess Inc. Wednesday joined the crowd of apparel firms exceeding second-quarter expectations while providing cautious guidance for the remainder of the year.

For the three months ended July 31, earnings attributable to Guess grew 12.1 percent to $66.8 million, or 72 cents a diluted share, from $59.6 million, or 64 cents, in the year-ago quarter. Wall Street analysts were expecting earnings per share of 68 cents for the quarter, according to Yahoo Finance.

Revenues rose 10.5 percent to $577.1 million from $522.4 million, including a 10 percent gain in sales to $550.6 million from $500.4 million.

The Los Angeles-based firm’s North American retail stores posted a 6.3 percent increase in sales to $241.8 million on a comparable-store sales gain of 3.5 percent. North American wholesale sales were up 33.3 percent to $44.3 million, while the European segment rose 5.8 percent to $222.3 million. Asian sales jumped 42.8 percent to $42.2 million. Guess doesn’t separate its wholesale and retail sales outside North America.

The company said operating margins in the quarter fell 70 basis points to 16.7 percent of sales compared with the prior year’s quarter, a reflection of lower North American product margins and high occupancy costs due to the firm’s global retail expansion.

Paul Marciano, chief executive officer, said the results “exceeded our expectations for both top-line and bottom-line growth. Each one of our business segments increased revenues, and we made excellent progress in our efforts to grow our international businesses.”

Marciano noted, “We remain fully committed to expanding our business internationally, and developing Europe and Asia remain our top priorities.” He pointed out that European and Asian expansion accounted for nearly half of revenue growth, “despite the headwind caused by the stronger U.S. dollar.”

In the quarter, the company spent $49.3 million to repurchase 1.5 million shares of common stock, at an average purchase price of $32.88. Guess said as of July 31, it had authorization to purchase another $84.9 million of stock under a previously approved program.

For the third quarter, Guess is expecting diluted EPS of 55 cents to 58 cents on a revenue forecast of $565 million to $580 million. For the full year ending Jan. 31, Guess expects diluted EPS of between $2.80 and $2.85 on a revenue range of $2.35 billion to $2.40 billion. Analysts had expected 57 cents for the quarter and $2.92 for the year.

With the full-year guidance falling below analysts’ consensus estimates for EPS of $2.92, shares fell more than 8 percent in after-hours trading. Prior to the after-market release of results, they finished the day at $38.23, up 78 cents, or 2.1 percent.

For the six months, earnings were up 27.1 percent to $117.1 million, or $1.25 a diluted share, from $92.1 million, or 99 cents, last year. Revenues rose 15.9 percent to $1.12 billion from $963.6 million, with sales growing 15.8 percent to $1.06 billion from $919.5 million.

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