Guess Earnings Nearly Double

Guess Inc. nearly doubled its profit in the third quarter as the Los Angeles apparel maker trimmed costs and as sales in company-owned stores jumped more than 20%.

The jeans maker said earnings for the third quarter ended Sept. 27 rose to $6.7 million, or 15 cents a share, from $3.4 million, or 8 cents, a year earlier. Last year’s earnings included pretax proceeds of $4 million from a legal settlement.

A consensus of analysts polled by Thomson First Call expected per-share earnings of 11 cents.

Revenue increased 5.6% to $166.7 million.

Sales at stores open at least a year, a key measure of a retailer’s health, rose 13%.

Guess operates about 260 stores in the United States and Canada.

But wholesale revenue fell nearly 17% as the number of other companies’ stores selling Guess clothes dwindled to 800, compared with 1,300 in last year’s third quarter.

“Guess performance in the third quarter is indicative of the positive trends underway at our company,” President and Chief Operating Officer Carlos Alberini told analysts during a conference call.

But his outlook for the company remained cautious.

“While we expect business to remain challenging for the rest of 2003, our objective remains to improve sales and margins while carefully managing cost and inventory,” Alberini said.

In the fourth quarter, the company expects retail sales to increase in the “mid-teen range,” including the opening of about 20 new stores. On the wholesale front, Guess expects revenue to increase “in the teens,” Alberini said.

The results were released after the market closed.

Shares of Guess were unchanged at $11.25 in New York Stock Exchange trading. The stock has gained more than 150% this year.