Shrinking Margins Contribute to Lower Guess Earnings

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On June 4, 2009, Guess(GES Quote) reported a 32.9% decline in its Q1 FY10 earnings due to a drop in revenues and shrinking margins. Net income decreased to 32.54 million or $0.35 per share from $47.80 million or $0.50 per share in the same quarter a year ago. The latest quarterly earnings beat the most recent consensus estimate of $0.29 per share.

Net revenue decreased 9.8% to $441.20 million from $489.22 million in the prior year's quarter, dragged down by a major fall in its European operations. Segment-wise, retail operations revenue inched down 2.1% to $207.56 million from $211.94 million. Comparable store sales declined 10.0%. Revenue from wholesale operations, including the Asian operations, fell 12.3% to $65.87 million from $75.13 million. Additionally, European operations revenue plunged 18.5% to $145.70 million from $178.66 million and the licensing operations revenue fell 6.0% to $22.07 million as against $23.49 million. ...