The stock price of Guess?, Inc. (NYSE:GES) declined after the apparel retailer reported disappointing financial results for the second-quarter fiscal 2015. The shares of the company were trading at $23.41 per share, down by more than 8% at the time of this writing around 11:35 in the afternoon in New York.
Guess’ financial results
Guess?, Inc. (NYSE:GES) posted earnings of $0.26 per share, down from $0.52 per share in the same period a year ago. Its revenue declined 5% to $609 million. The financial results of the apparel retailer missed the $0.29 in earnings per share on $618 million in revenue consensus estimate of Wall Street analysts.
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According to Guess?, Inc. (NYSE:GES) its revenues in Europe and Asia declined 6% to $235.3 million and 2.4% to $64.3 million, respectively. Its North American wholesale revenues dropped 7.5% to $38.3 million.
Guess?, Inc. (NYSE:GES) said the revenues of its retail stores and e-commerce sites in North America declined 4.1% to $244 million during the quarter. Its operating margin dropped 560 basis points to 4.9% from 10.5% in the same period last year.
The apparel retailer’s operating earnings fell 55.4% to $29.9 million. Guess?, Inc. (NYSE:GES) said its effective tax rate increase to 34.8% in the second-quarter.
In a statement, Paul Marciano, CEO of Guess?, Inc. (NYSE:GES) said, “Overall second quarter earnings were consistent with our expectations but were short of our operational goals due to a soft environment in North America, where traffic and promotional activity have continued to put our brick and mortar stores under pressure.”
For the third quarter fiscal 2015, Guess?, Inc. (NYSE:GES) estimated that it would be able to deliver earnings in the range of $0.15 to $0.20 per share and revenue in the range of $590 million to $600 million. The company expected its operating margin between 3.5% and 4.5%.
Price target reduction
Following its weak financial performance, analysts at Telsey Advisory Group reduced their price target for the shares of Guess?, Inc. (NYSE:GES) from $31 to $25 per share.
On the other hand, analysts at Wunderlich also lowered their price target for the stock to $27 per share. Analysts at Mizuho also cut their price target to $22 per share.