A LOWER GUESS: Guess Inc. Wednesday warned that its third-quarter earnings would likely come in below analysts’ forecasts and last year’s levels. The Los Angeles-based firm said that it expects diluted earnings per share for the quarter ended Sept. 28 to fall in the range of 6 cents to 8 cents, including a 5-cents-per-share gain related to resolution of a lawsuit. Excluding that gain, the company said, earnings would be around 1 to 2 cents a share, which is below the 7-cents-per-share Thomson Financial/First Call consensus. Analysts typically factor one-time items like the 5 cent gain out of their forecasts. The company also noted that sales for the quarter were off 0.6 percent, to $94.9 million, with comparable-store sales down 5.4 percent. Guess also noted that it obtained a new $85 million asset-backed credit line from Wachovia Securities.
This story first appeared in the October 3, 2002 issue of WWD. Subscribe Today.
ACCOUNTING FOR SEARS: In consultation with the Securities and Exchange Commission, Sears, Roebuck & Co. modified a previous change in accounting principle, making it instead a change in estimate. The switch to a change in estimate from accounting principle will increase Sears’ first-quarter profits by $191 million, or 59 cents per share, and reduce second-quarter net income by the same amount. The retailer, when releasing second-quarter results in July, had retroactively applied an aftertax charge of $191 million related to uncollectible accounts in the credit business to the first quarter.
JONES TAKES BACK GV CAREER: Jones Apparel Group Inc. will take control of the Gloria Vanderbilt career collection, ending a licensing agreement with Tracy Evans Ltd., a moderate maker, on Dec. 31. Jones requested the termination in order to better integrate the brand into its moderate portfolio and, starting in January, the company will move the career division of the line to Jones’ showrooms at 1411 Broadway. Peter Boneparth, president and chief executive of Jones, said Wednesday that taking control of the career line and moving it to the home showroom is consistent with the company’s goal of having all of the moderate brands housed together. Jones acquired Vanderbilt in March.
SIMON’S VISA: The Simon Property Group Inc., the nation’s largest mall developer, said it will roll out its pre-paid Simon Visa Gift Card to all its malls in 2003. It’s been tested in four malls, and will be operational in 47 by the end of this year. Unlike other gift cards, it enables holders to check the balance online, through a toll-free number or at a participating Simon mall. The Simon Visa Gift Card can be used at any store or restaurant that accepts Visa.