Guess? Inc. (GES:US), an apparel maker that targets style-conscious 18- to 32-year-olds, sank the most in more than a decade after cutting its annual profit and revenue forecasts amid a drop in North American store sales.
Guess fell (GES:US) 23 percent to $25.95 at the close in New York, the biggest decline since November 2000. The Los Angeles-based company’s shares have sunk 13 percent this year.
The company, which operates 511 stores in the U.S. and Canada, said comparable-store sales, a measure of a retailer’s growth that excludes new stores, fell 8.5 percent in the quarter ended July 28, according to a statement yesterday. Guess is working to improve its women’s and accessories lines and said it will refine its North American strategy “where necessary” to stay competitive.
“North America retail was clearly a disappointment for us,” Chief Executive Officer Paul Marciano said in a conference call yesterday after the report, citing fewer tourists and missteps in accessories. “The environment continued to be very promotional and with less profit, especially during the second half of the quarter. The summer months brought a sharp decrease in visitors from Europe in the stores.”
Profit for the year ending Feb. 2 will be $2.15 to $2.30 a share, the company said. In May, Guess had projected $2.50 to $2.65 a share. Analysts anticipated $2.59, the average of 13 estimates (GES:US) compiled by Bloomberg.
Annual revenue will be $2.62 billion to $2.65 billion, down from a prior forecast of $2.7 billion to $2.74 billion. That compared to an average analyst estimate of $2.71 billion.
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