Guess Turnaround Effort Stalls

Guess Inc. logged a steeper-than-expected profit decline during its holiday quarter and warned it would post a first-quarter loss, the latest signs that its turnaround effort has stalled.

Shares in the company tumbled 12% in after-hours trading.

Guess has long struggled with dwindling sales—reporting 21 straight quarters of same-store sales declines. And as the retailer has an international presence, the strong U.S. dollar has added to its woes by making its items more expensive in foreign currencies.

In the latest quarter, sales at existing stores slipped 2.2%. Accounting for a 1% rise in online sales, overall comparable store sales declined 1.2%, Guess said.

Chief Executive Victor Herrero said Wednesday that Guess still has "more work to be done" and issued downbeat guidance for the current quarter and full year.

The company expects to swing to a loss in its first quarter, projecting a loss of 17 cents a share to 20 cents a share. Analysts had predicted a profit of 3 cents a share. For the year, Guess guided for per-share earnings between 65 cents and 85 cents, short of the $1.11 analysts had anticipated.

Overall for the fourth quarter, Guess reported a profit of $47.8 million, or 57 cents a share, down from year-earlier earnings of $53.9 million, or 63 cents a share. Revenue slid 5.5% to $658.3 million.

Analysts projected 58 cents in adjusted earnings per share and $657.6 million in sales, according to Thomson Reuters.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

March 16, 2016 17:55 ET (21:55 GMT)

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