Investors Cheer Q1 Beat by Guess? (GES), Shrug at Conservative Guidance

May 22, 2012 5:07 PM EDT
Shares of Guess? (NYSE: GES) are up about 6 percent Tuesday afternoon following first-quarter 2013 results which topped the Street, but guidance which came in below analyst's estimates. Guess? shares last traded at $25.58.

The apparel maker saw quarterly revenue slip modestly from $592.24 million in the same quarter last year to $579.27 million. Analysts were expecting sales of $571.49 million. On a constant currency basis, net sales were up slightly.

Sales within North America were up 1.8 percent year over year to $251.8 million, European sales fell 9.7 percent to $189.8 million and sales in Asia totaled $64.8 million, up nearly 8 percent. Same-store sales were down 5.5 percent in North America.

Net income tumbled nearly 38 percent to $26.65 million, or about 30 cents per share. Wall Street was looking for EPS of 27 cents.

Paul Marciano, Guess?'s CEO, said, "We are pleased to deliver first quarter financial results that exceeded both our top and bottom line expectations, even as economic conditions remained challenging in many markets. We continued to focus our efforts on growing in newer international markets, and we succeeded, expanding in key markets such as China, Germany and Russia. While we did face economic headwinds in southern Europe, our brand remains strong there and our business is stable. Our global licensing business outperformed expectations, even as our licensees encountered many of those same economic challenges."

Guess? is anticipating second-quarter sales in the range of $625 million to $635 million and earnings of 48 cents to 52 cents per share, which compares to the analyst consensus estimates of $667.5 million in sales and EPS of 62 cents.

While the company reaffirmed its previously-issued FY13 EPS guidance of $2.50 to $2.65, the sales outlook was lowered from $2.74 to $2.78 billion to a range of $2.7 billion to $2.74 billion. The Street is currently looking for FY13 sales of $2.74 billion.

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