Guess? Q3 Profit Tops Expectations, Shares Rise

Shares of

surged over 4 percent in after-hours trading after the company reported better-than-expected earnings for the third quarter on Tuesday. The Los Angeles, California-based company posted quarterly net earnings of $12.4 million, or $0.15 per share, down from $20.8 million, or $0.24 per share, in the year-earlier period. Its sales slipped to $521 million from $589.8 million. However, analysts were projecting earnings of $0.11 per share on sales of $521 million. Its retail comp sales, including e-commerce, slipped 6 percent in U.S. dollars and declined 2 percent in constant currency. Americas Retail revenue fell 7 percent in U.S. dollars, while Europe revenue dropped 15 percent in U.S. dollars. Asia revenue dipped 17 percent in U.S. dollars. The company's board announced a quarterly cash dividend of $0.225 per share. Operating margin shrank 20 basis points to 4.0 percent in the third quarter, from 4.2 percent in the year-ago quarter. Victor Herrero, Chief Executive Officer, commented, "I am pleased to report that third quarter results were better than our expectations. Our European retail business was especially strong with a double digit comp sales increase for the quarter for the first time in five years." For the current quarter, the retailer projects earnings of $0.53 to $0.62 per share, versus analysts' estimates of $0.59 per share. It expects sales to range between a decline of 1.5 percent and a 1.5 percent growth in constant currency. The company expects FY16 earnings of 0.93 to $1.02 per share, versus analysts' expectations of $0.96 per share. It projects net revenue to drop between 1.5 percent and 0.5 percent in constant currency. Guess? shares gained 4.45 percent to $20.41 in the after-hours trading session.