Investors erased a fifth of Guess Inc.’s market value after the company reported lower second-quarter earnings and cut its outlook for the year.
The jeans brand’s stock fell 22.6 percent Thursday to $25.95 — not far from its 52-week low of $24.23.
Second-quarter earnings attributed to the company declined 29.3 percent to $42.9 million, or 49 cents a share, from $60.7 million, or 65 cents, a year earlier.
Revenues for the three months ended July 28 declined 6.2 percent to $635.4 million from $677.2 million. Comparable-store sales in North America fell 8.5 percent.
Chief executive officer Paul Marciano told analysts on a conference call that the company’s North American retail business was “clearly a disappointment.”
“We did not experience the results that we expected,” Marciano said. “The environment continued to be very promotional and with less profit, especially during the second half of the quarter. The summer months brought a sharp decrease in visitors from Europe in the stores.”
Business was weakest in the company’s stores in tourist locations.
Guess’ weakest category was accessories. “Our product line lacked variety, key volume drivers and did not reflect the improvement we have made,” the ceo said. “We are committed to making the necessary change to reverse this trend and are working with our partners [and] licensees to improve the product offering in our stores.”
Women’s apparel was the strongest category in the brand’s full-priced stores.
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. Marciano vowed to continue to manage the business “prudently.”
Randal Konik, an analyst at Jefferies, said the company enters the third quarter “amidst an elevated competitive environment, we don’t think the brand is at a point where management can try to not be promotional.”
Guess’ stock drop stood out on a generally bad day for the markets.
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 & Company 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.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty