Shares of Guess Inc. slipped in after-hours trading Wednesday after the company said first-quarter earnings and sales would be below Wall Street’s projections.
Still, Guess posted a 15.3 percent jump in fourth-quarter profit, topping analysts’ expectations despite a deceleration in sales in North America.
For the period ended Jan. 29, net income expanded to $103.2 million, or $1.11 a diluted share, compared with income of $86.6 million, or 93 cents, in the year-ago quarter. The company said results included a one-time 5-cent benefit.
Revenue rose 17.9 percent to $756.9 million, from $642 million in 2009. Analysts were looking for EPS of $1.06 on sales of $725.9 million, Yahoo said.
Comparable-store sales in North America retreated 1.1 percent, as sales grew 9.4 percent to $338.6 million. Sales in Europe rose 32.5 percent to $294.9 million, while sales in Asia grew 23.2 percent to $55.4 million. North American wholesale volume increased 5.2 percent to $37.7 million, as licensing revenue grew 19.6 percent to $30.4 million.
Quarterly gross margin fell to 46.3 percent of sales to year-ago margin of 46 percent.
“In North America we feel that the performance does not currently reflect the true potential of our brand in this market,” said chief executive officer Paul Marciano on the company conference call. “The traffic increase we have anticipated did not happen and promotions started early and were very aggressive in malls.
“We are entering a period of historical volatility,” he continued, “in a commodity market and rising production costs that will make this year challenging. We are being very proactive in these two areas with target price increase and main supply chain initiatives that we believe can mitigate most of the inflationary pressure.”
For the year, net income rose 19.3 percent to $289.5 million, or $3.11 a diluted share, compared with income of $242.8 million, or $2.61 share, a year earlier. Net sales increased 16.9 percent to $2.49 billion, from $2.13 billion.
The contemporary apparel and accessories maker, which noted that first-quarter comps in North America were down in the low-single digits to date, said it expects first-quarter EPS of between 41 and 44 cents on sales ranging from $555 million to $570 million. For the year, Guess anticipates EPS of between $3.30 and $3.50 a share on sales of $2.72 billion to $2.82 billion.
Analysts are looking for first-quarter earnings of 61 cents on sales of $595.6 million, and annual EPS of $3.12 on revenues of $2.46 billion. Shares fell 4.6 percent in after-hours trading, to $41.65, after declining 1.2 percent earlier in the day.
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