(Adds details, analyst’s comments)
By Dilipp S. Nag
BANGALORE, Sept 3 (Reuters) - Clothing and accessories retailer Guess Inc (GES.N) posted a better-than-expected quarterly profit, driven by strong sales growth in Europe, Asia and North America, and raised its fiscal 2009 outlook.
The company, whose products include apparel, denim, handbags, watches and shoes, reported net earnings of $53.8 million, or 57 cents a share, for the second quarter ended Aug. 2. It earned $37.5 million, or 40 cents a share, a year earlier.
Total net revenue for the company, whose larger rivals include Abercrombie & Fitch Co (ANF.N) and Limited Brands Inc LTD.N, rose nearly 33 percent to $515.2 million.
Analysts on average expected earnings of 49 cents a share, before special items, on revenue of $460.8 million, according to Reuters Estimates.
Guess, whose brands include Guess, Marciano and G by Guess, said it continues to strengthen its assortments, and denim is a major focus for the company.
Brean Murray, Carret & Co analyst Eric Beder said right now denim is extremely strong, and Guess is one of the better companies selling it. “Denim is going to be a very big piece of this second-half fashion story.”
Net revenue from the company’s European segment surged nearly 62 percent, while revenue from its wholesale segment, which includes its Asian operations, increased 26 percent. North American retail revenue rose 20 percent.
Sales at stores open at least a year rose 8.1 percent for the quarter. The company operated 407 retail stores in the United States and Canada as well as 620 retail stores outside of North America as of Aug. 2.
For the fiscal year ending January 31, 2009, the Los Angeles-based company now expects earnings of $2.47 to $2.53 a share on revenue of $2.06 billion to $2.11 billion.
It had earlier forecast a profit of $2.40 to $2.48 a share on revenue of $2.03 billion to $2.08 billion for the year.
Guess management has always been conservative while giving outlook and the latest forecast reflects that, Beder said by phone. There are lot of positives and Guess will continue to beat its projections, he added.
Beder has a “buy” rating and a price target of $57 on the company’s stock.
Shares of the company, which also boosted its quarterly dividend by 25 percent to 10 cents a share, closed at $38.25 Wednesday on the New York Stock Exchange. (Editing by Deepak Kannan)