Guess profit beats Street as costs fall, online sales jump

Apparel retailer Guess Inc's quarterly profit beat market estimates as the company's expenses declined and online business grew.

Guess shares were up 14 percent in heavy after-market trading.

The company's e-commerce sales jumped 37 percent to a record $80 million in the fourth quarter ended Jan. 31, underscoring a growing customer preference for shopping online.

E-commerce sales added 3 percentage points to Guess's North American retail comparable sales in the period, which declined 5 percent.

Analysts had expected a 6.5 percent drop, according to Consensus Metrix.
Selling, general and administrative expenses fell 5 percent to $188 million, helped by a strengthening dollar and lower incentives, Chief Financial Officer Sandeep Reddy said in a post-earnings conference call on Tuesday.

The dollar gained 9 percent in the period compared with a basket of major currencies.

Guess gets about 45 percent revenue from international markets. Total revenue fell 9.3 percent to $696.7 million.

Net income attributable to Guess fell 22 percent to $53.9 million, or 63 cents per share.
 
Analysts on average had expected a profit of 57 cents per share on revenue of $704.6 million, according to Thomson Reuters I/B/E/S.

Guess, however, outlined a disappointing 2015, primarily due to a stronger dollar. About 1,190 of its 1,668 stores are in outside the United States.

The dollar is expected to rise nearly 10 percent in 2015 after gaining 13 percent in 2014.

The company forecast a loss of 3-6 cents per share for the current quarter. Analysts were expecting a loss of 3 cent per share.

$1 = £0.67