Guess delivered second-quarter results that pleased the Street.
For the three months ended July 30, the company said profits jumped 76.4 million to $32.3 million, or 38 cents a diluted share, from $18.3 million, or 21 cents, a year ago. Excluding the gain from the sale of a minority interest investment, adjusted EPS in the quarter was 14 cents. Total revenues slipped 0.2 percent to $545 million from $546.3 million. Revenues included a 4 percent increase in sales to $523 million and a 13.3 percent decline in royalties to $22 million.
Wall Street was expecting EPS of 7 cents on revenues of $550.5 million. Shares of Guess Inc. shot up 15.1 percent in after-market trading following the firm’s EPS beat.
For the six months, profits fell to $7.1 million, or 8 cents a diluted share, from $21.6 million, or 25 cents, a year ago, while total revenues decreased 3.1 percent to $993.8 million from $1.03 billion.
Victor Herrero, chief executive officer, said, “We are pleased to deliver second-quarter earnings that exceeded our expectations both in earnings per share and operating margin.”
He said its European business delivered another strong quarter, with comp-store sales up in the low-double digits. The retail business in the Americas performed as expected with tourist doors still underperforming, he said. The company also saw positive comps in Korea, mainland China and Japan, although Greater China was below expectations as the company continues to build out its infrastructure and transition the business to a direct model.
The company guided third-quarter diluted EPS to between 11 cents to 16 cents, on consolidated net revenues expected to increase between 5 to 8 percent in U.S. dollars. For the year ending Jan. 28, 2017, the company guided diluted EPS in the range of 62 cents to 75 cents, and consolidated net revenues projected to rise between 3 to 5 percent in U.S. dollars.
Shares of Guess on Wednesday fell 6.2 percent to close the day’s trading session at $14.90, but then rose to $17.15 in after-market trading. The company reported second-quarter earnings after the markets closed.