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Shares in Guess jump higher in pre-market trading in the wake of better-than-expected earnings

Shares in Guess have waivered in recent weeks following last month's reports of improper conduct by its co-founder Paul Marciano which were leveled by supermodel Kate Upton

Picture of two women in front of a store
In early trade, shares in Guess? were up US$1.65 at US$15.52

Shares in Guess? Inc (NYSE:GES), the hip women’s clothing retailer, rose 10.6 per cent in pre-market trade Thursday on the back of its better than anticipated fourth-quarter performance which was fueled by bubbly sales across Asia and Europe.

In early trade, shares in Guess? were up US$1.65 at US$15.52, a day after the Los-Angeles based company said it earned US$51.3mln on an adjusted net basis, which was a 40 per cent jump from the US$36.6mln the group earned in the same period a year ago. On an adjusted basis, its diluted earnings per share increased 44 per cent to US$0.62, compared to US$0.43 in the same period a year ago.

In a statement, Victor Herrero, Guess’s chief executive, said this year marks the “beginning of a turnaround” for Guess.

“I still see a lot of opportunities left in Europe and Asia, where we will continue to allocate capital for superior returns and where we plan to continue growing sales in double digits while also expanding margins,” Herrero said. “We will keep working on improving the profitability of the Americas by executing on our cost reduction and margin improvement initiatives.”

Shares in Guess have been beaten down in recent weeks following last month's reports of improper conduct by its co-founder Paul Marciano which were leveled by supermodel Kate Upton.

Upton claims that Guess?’s former creative director Marciano, who has since relinquished his daily duties at the company, verbally assaulted and harassed her when she was on her first professional modelling shoot when she was 18.

Guess has denied any misconduct on the part of Marciano but said it would investigate Upton’s concerns if it determines “they have any merit”.

When factoring in the rules of GAPP as well as a US$47.9mln charge related to US tax reforms, Guess said its net earnings in the fourth-quarter dropped to US$1m, which is an 84.2 per cent drop from the $6.6m the retailer earned in the year-ago period.

Quick facts: Guess

Price: 16.32 USD

NYSE:GES
Market: NYSE
Market Cap: $1.04 billion
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