May 30, 2014
Guess, Express forecast disappointing 2nd quarter
May 30, 2014
Apparel retailers Express and Guess forecast disappointing profits for the current quarter as a revival in consumer spending takes longer.
Express warned it could post a loss in the current quarter amid high Spring inventory and slow traffic, and said it would shut about 50 stores in the next 36 months, sending its shares down about 11 percent in extended trading.
The company also cut its full-year earnings outlook after reporting a 9.6 percent fall in first-quarter sales.
A large number of U.S. apparel retailers including Urban Outfitters Inc, Aeropostale Inc and American Eagle Outfitters Inc have said their performance has been hurt due to weak consumer demand and intense competition.
Guess too forecast a current-quarter profit below expectations after posting a loss for the first quarter as demand in North America and Europe fell, sending its shares down 3 percent in extended trading.
Guess was concerned about the potential impact of the turmoil in Russia and Ukraine on its Eastern European business, Chief Executive Paul Marciano said.
The company's retail sales in North America, its largest market, fell 4.2 percent while sales in Europe fell 3.8 percent in the quarter ended May 3.
Guess said it expects a current-quarter profit of 25 cents to 30 cents per share, below the average analyst estimate of 39 cents per share, according to Thomson Reuters I/B/E/S.
Express said it expects to earn up to 3 cents per share or lose up to 3 cents per share in the current quarter. Analysts were expecting a profit of 12 cents per share.
The company said it would cut costs across its operations and expects annual cost savings of about $18 million.
Guess shares closed at $26.88 on Thursday on the New York Stock Exchange while Express shares closed at $13.63.
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