Guess Inc. offered an optimistic earnings view for the year as the apparel maker's restructuring efforts begin to pay off, though it signaled sales would improve at a slower-than-expected clip.

Shares jumped 7.3% in after-hours trading. Through Wednesday's close, the stock had tumbled 21% this year.

Chief Executive Victor Herrero had earlier said the first six months of this year would be a transition period, as the company worked to cut costs, push through restructuring plans and breathe life into its flagging sales. "This transition is now behind us," he said Wednesday, "and the investments we have made so far are expected to start generating revenue growth...in the third quarter, accelerating into the fourth quarter."

In the second quarter, sales slipped 0.2% to $545 million, edging in below the $550.5 million analysts projected. The decline came as sales at stores open at least a year fell 2.5%, but that slide was less steep than the 4.2% drop investors expected and it marks an improvement from recent quarters. Guess has logged same-store sales declines since the start of 2011.

Like many other retailers, from specialty shops to the department stores where Guess also sells its merchandise, the company has had to contend with falling foot traffic as shoppers move online. At the same time, Guess has been hurt by the strong U.S. dollar's negative impact on pricing abroad and on foreign visitors' spending in the U.S.

As evidence that turnaround efforts are starting to materialize, Guess lifted the low end of its full-year earnings forecast. For the year ending in January, the company expects to post 62 cents to 75 cents in adjusted earnings per share, compared with earlier guidance of 55 cents to 75 cents a share and above the 60 cents analysts have predicted.

The company said revenue would rise between 3% and 5%, or between 2.5% and 4.5% on a currency-adjusted basis, translating to about $2.29 billion and roughly in line with analysts' average estimate. The range is down from an earlier view of 5% to 7% adjusted sales growth, and it is expected to be driven by strength in Europe in Asia, offsetting continued softness in domestic markets.

For the current quarter, Guess projects 11 cents to 16 cents in per-share profit, compared with the 16 cents analysts have been looking for, on 5% to 8% revenue growth that translates to roughly $554 million. Analysts have estimated $568.8 million in third-quarter sales.

In all for the most-recent period, Guess reported a profit of $32.3 million, or 38 cents a share, up from $18.3 million, or 21 cents a share, a year earlier. The most recent period included a $22.3 million gain stemming from the sale of a minority interest investment, which lifted earnings by 24 cents a share.

Analysts projected seven cents in adjusted earnings per share.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

 

(END) Dow Jones Newswires

August 24, 2016 17:55 ET (21:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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