Apparel retailer Guess? Inc. on Wednesday reported a drop in profit for the fourth quarter, as revenues declined hurt largely by stronger dollar. Shares of the company plunged over 11 percent after it detailed a weak outlook as the US dollar continues to strengthen.
Los Angeles-based Guess has struggled with the effect of the strong dollar for the past several quarters. The company generates a large chunk of its sales overseas, especially in Europe. Intense competition in key markets, weak traffic and soft consumer sentiment has also impacted Guess negatively.
Guess’ fourth-quarter profit dropped to $47.8 million or $0.57 per share from $53.9 million or $0.63 per share last year. Analysts polled by Thomson Reuters estimated earnings of $0.58 per share for the quarter.
Revenues for the fourth quarter dropped to $658.3 million from $696.7 million last year. Analysts had a consensus revenue estimate of $657.6 million for the quarter.
North American retail stores sales dropped 3 percent, while wholesale revenue decreased 9 percent. For the quarter, revenues at European business segment fell 5 percent, however, it would have increased 6 percent on a constant currency basis. Asia revenues decreased 18 percent in U.S. dollars and 14 percent in constant currency.
Looking forward to the first quarter, Guess expects loss per share of $0.20 to $0.17 and revenues to decline between 1.5 to 0.5 percent. Analysts currently estimate earnings of $0.03 per share and revenues to decline 2.7 percent.
For the full year, Guess expects revenue growth of 6.0 to 8.0 percent and earnings of $0.65 to $0.85 per share. Analysts currently estimate earnings of $1.05 per share on revenues of $2.18 billion for the year.
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