Guess Boosts Outlook After Strong Quarter

Guess? Inc. raised its 2008 outlook after second-quarter earnings breezed past expectations, but shares of the clothing and accessories retailers slid 6.4% to $49.97 AH as investors worried the view wasn't bullish enough. Guess? said it now sees earnings of $1.79-$1.84/share for the year, up from its previous estimate of $1.75-$1.80 while forecasting revenue in the range of $1.56B to $1.6B and operating margin of about 17.5%. Analysts, on average, expect earnings of $1.83/share and revenue of $1.57B for the year. "As we have seen in the past, the guidance provided will prove conservative. The company will beat these numbers," said one analyst. For the second quarter, Guess? said it earned $37.5M ($0.40/share) on revenue of $388.3M, up from $20.6M ($0.22/share) on revenue of $261.9M in the year ago period. Analysts had expected earnings of $0.33/share on revenue of $345.6M, on average. Strong performance across all product lines in the North American retail business led to a 16.2% increase in same store sales. The company also raised its quarterly dividend 33% to $0.08, payable October 5 to holders of record September 19.

Sources: Press release, Reuters
Commentary: Companies With 100% Earnings Beat Rates Over Last Few Years • Investor Guessing Games at Guess Jeans
Stocks/ETFs to watch: GES, RTH, XRT, PMR. Competitors: GPS, LTD, ANF
Earnings call transcript: Guess? F1Q08 (Qtr End 5/05/07)

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