GUESS ISSUES WARNING
NEW YORK — Citing the drop-off in retail traffic following the Sept. 11 terrorist attacks on New York and Washington, Guess Inc. warned that its earnings for the recently ended third quarter would be lower than anticipated and said it would be taking heavier-than-expected charges related to cost-cutting moves.
The Los Angeles-based company said it expects earnings to come in at 6 cents to 8 cents a share before charges for the quarter ended Sept. 30, compared with the 9 cents to 11 cents a share it had previously expected. In last year’s third quarter, the company earned 19 cents a diluted share, or $8.4 million on a net basis.
Guess officials had previously warned Wall Street to expect one-time charges of about $3 million in the third quarter, for severance costs, asset write-downs and acquisition charges. The company said in a statement that it is “making further adjustments to its strategies” and expects the charge to be between $4 million and $5 million.
The company said that September comparable-store sales at its full-price units were off 15.5 percent from a year earlier, while outlet sales slid 21.9 percent. Total sales at the company’s stores came to $26.2 million, down 10.6 percent.
Following the announcement made late Wednesday, analysts lowered their full-year earnings targets for Guess to 34 cents a share on Thursday, according to First Call/Thomson Financial. Last year, the company recorded a net loss of $13.1 million, or 30 cents a share.