Guess Profit Jumps Tenfold; Sales Rise 41%

Guess Inc.’s earnings soared past Wall Street’s expectations in the first quarter as shoppers snapped up the company’s jeans and jewelry.

The Los Angeles-based retailer and wholesaler of trendy clothes and accessories said profit rose to $8.2 million, or 18 cents a share, for the three months ended April 2 from $756,000, or 2 cents, a year earlier.

Analysts had forecast earnings of 2 cents a share, according to Thomson First Call.

Sales jumped almost 41% to $215.6 million, while sales at stores in the U.S. and Canada open for at least one year -- a key measure of performance -- increased 4.5%.

But same-store sales in April slipped 1.2% compared with a year earlier. President Carlos Alberini attributed the drop to the fact that Easter, which generally provides a boost for apparel retailers, fell in March instead of April this year.

But while fewer people were shopping last month, more of those who did go into Guess stores bought something, he said, and the amount they spent rose. “Overall, we’re pleased,” Alberini said.

For the quarter, Guess recorded better-than-expected sales in Europe and its U.S. wholesale business improved over the year before, as did licensing operations.

In addition, there were five more days in the just-concluded quarter than in the comparable period last year.

Alberini also said Guess’ marketing contract with celebrity Paris Hilton had ended. Its spring campaign features an Italian model.

Analysts say 2005 could be a transition year for Guess, which is juggling an armload of fresh initiatives.

The company is positioning itself for growth with its Marciano chain, launched last fall to target a slightly older and more sophisticated customer, and its new Guess Accessories stores. Further, Guess recently acquired its European jeanswear business, and in the second half of the year it plans to start selling fragrances.

“A lot’s going on at Guess,” said Margaret Whitfield, an analyst with Ryan Beck & Co. “And you wonder if they can handle all this.”

Guess’ rose 5 cents to $14.38 on the New York Stock Exchange. The earnings were announced after the market closed.