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Guess? Inc. (NYSE:GES) reported third quarter results with earnings of 69 cents per share, which was a penny above the Zacks Consensus Estimate of 68 cents. Quarterly earnings were up 3% year-over-year.

Net sales for the quarter were almost flat year-over-year increasing 1% to $522 million, primarily driven by strong retail sales in North American and Asia, partially offset by decrease in sales in the European segment. Comparable store sales decreased 3.4% in US dollars for the quarter, compared to the same period a year ago.

Revenues in the Retail segment grew a modest 1.9% year-over-year due to a 3.4% decrease in comparable same-store sales. During the quarter, the company opened two new stores.

The Wholesale segment revenues grew 10% in the quarter, driven by good response by the consumer to the product assortment through increased store traffic.

The European segment revenues for the quarter totaled $169 million, reflecting a 9.3% increase. Sales were impacted due to a shift in shipments from the current year's third quarter into the second quarter.

Licensing segment revenue declined marginally by 0.4% to $27.8 million in the third quarter of fiscal 2010, from $27.9 million in the prior-year period.

Operating margin for the quarter contracted 49 basis points (bps) to 45.3% versus 45.8% in the prior-year quarter. Benefits of tight inventory control were more than offset by the impact of negative comparables on the retail occupancy costs and the negative impact of the strong U.S. dollar on European product purchases.

At the quarter end, Guess had cash reserves of $345 million, a 45.6% increase year over year. The company has a pristine balance sheet with no debt.

Based on the performance of the company year-to-date, management provided guidance for the fourth quarter of fiscal 2010. Quarterly earnings are expected to be in the range of 77 cents to 80 cents per share. Consolidated revenues are expected to be in the range of $585 million to $605 million, and operating margin is expected to be about 18%.

For fiscal 2010, annual earnings are expected to be in the range of $2.45 to $2.48 per share. Net revenues for the year are expected to be in the range of $2.07 billion to $ 2.09 billion. The operating margin is expected to be about 16.5%.

Source: Guess Beats Third Quarter Estimates on Flat Revenue