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Shares of American fashion retailer Guess (NYSE:GES) slid sharply in Tuesday’s extended trading after the company offered guidance well below analyst expectations.
For the fourth quarter, the Los Angeles-based company came in above consensus estimates. The retailer reported $1.74 in adjusted earnings per share on $817.8M in revenue. Analysts had expected $1.30 in earnings per share on $772M in revenue for the quarter.
CEO Carlos Alberini credited robust sales in Europe for the stronger than expected Q4 performance.
“This performance caps a strong year for our Company despite the challenging market conditions we faced,” he commented. “In fact, this year currency fluctuations consumed $62M of operating profit and 140 basis points of operating margin. We delivered top line growth of 4% in US dollars and 12% in constant currency and achieved GAAP and adjusted operating margins of 9.2% and 9.8%, respectively.”
However, he was more cautious on the road ahead for the retailer.
“For fiscal year 2024, we are taking a prudent approach to our outlook and expect a low single digit revenue growth, a solid profit performance and strong cash flow generation,” he said.
Additionally, the company expects between a $0.31 and $0.25 per share loss in Q1 2024, well below the consensus of positive $0.52 in earnings per share. For the full-year, management expects between $2.45 and $2.80 in earnings per share, again disappointing against a $3.41 consensus estimate. Revenue growth expected to range between 1% and 3% also fell short of the 3.9% growth estimate.
Shares of Guess (GES) fell as much as 8% in after hours on the pessimistic profit outlook.
