Clothing retailers earnings roundup

Guess shares continue to climb after 3Q results, but Aeropostale's and Rue21's tumble.

By Benzinga Nov 29, 2012 12:17PM

Image Source Getty ImagesA trio of clothing retailers released their quarterly earnings results after the closing bell on Wednesday. Guess (GES), which rose sharply ahead of the results, continued to climb in after-hours after reporting its third-quarter number. Guess was up about 2.8% in Thursday morning trading. Aeropostale (ARO) and mall-cap name Rue21 (RUE), on the other, fell some 7% and 5%, respectively.

 

Guess

The company has been struggling in recent years as operating margins have come under pressure. While sales have continued to rise on an annual basis, net income fell in fiscal 2012 versus the year ago period.

 

Over the last decade, GES has soared more than 1,900%. But the stock tumbled 41% over the last five years as investors became concerned about the less robust growth rates at the retailer. As of Wednesday's close the stock had lost a little more than 15% in 2012.

 

For the fiscal third-quarter, the company reported net earnings of $36.65 million or $0.43 per share, compared to $66.30 million, or $0.71 per share, in the year ago period. This missed Wall Street analysts' consensus earnings per share estimates of $0.44 by a penny.


Sales in the period fell 2.2% to $628.83 million from $642.80 million in last year's third-quarter. This result, however, topped Wall Street consensus revenue estimates of $624.54 million.

 

Looking ahead to the fourth-quarter, Guess said that it expects earnings per share of $0.85 to $0.95 on revenue of $780 million to $800 million. Analysts estimated $0.95 per share in earnings and revenue of $789.17 million for the fiscal fourth-quarter.

 

For fiscal 2013, the company lowered its outlook. Earnings are now expected to be between $2.05 and $2.15 per share on revenue of $2.62 billion to $2.64 billion. The company's previously said it would earn $2.15 to $2.30 per share on revenue of $2.62 billion to $2.65 billion in the year.

 

The updated revenue outlook implies that Guess will report its first annual sales decrease in the last five years. The full-year guidance is also below analysts' consensus estimates of $2.16 per share on revenue of $2.63 billion for fiscal 2013.

 

The company's board of directors approved a special dividend of $1.20 per share, which will be paid along with the quarterly dividend of $0.20. The combined dividends will be payable on December 28, 2012 to shareholders of record at the close of business on December 12, 2012.


Aeropostale

The Guess competitor also released its fiscal third-quarter earnings results after the closing bell on Wednesday. The company reported a slight rise in net income to $24.9 million from $24.1 million in the year ago quarter. On a per share basis, Aeropostale earned $0.31 per share versus $0.30 per share last year. This beat Wall Street earnings per share estimate of $0.29 by two pennies.

 

Net sales in the quarter were up 2% to $605.9 million from $596.5 million in last year's fiscal third-quarter. This also exceeded Wall Street consensus estimates of $600.44 million.

 

While Aeropostale's third-quarter numbers beat Wall Street expectations, the stock came under pressure due to poor guidance. The company said that it sees earnings per share in a range of $0.36 to $0.41 for the fiscal fourth-quarter. This was well below current consensus earnings per share expectations of $0.54 for the upcoming quarter.


Rue21

Shares of the smaller retail fell just 0.21% in after hours trading but are down nearly 6% in Thursday morning trading. Rue21 reported better-than-expected earnings results for the third-quarter, but sales missed expectations. The company also lifted its full-year fiscal 2012 earnings outlook.

 

For the period, Rue21 reported adjusted net income of $10.0 million, or $0.41 per share. This was two pennies better than analysts' consensus earnings per share estimates of $0.39.

 

Total sales in the quarter were up 15.6% to $225.16 million from $194.76 million in last year's third-quarter. This came up short of analysts' consensus revenue estimates of $228.85 million.

 

Looking ahead, Rue21 said that it sees fourth-quarter earnings between $0.60 and $0.63 per share. Currently, Wall Street analysts are modeling fourth quarter earnings per share of $0.63 for the company.

 

For fiscal 2012, the company raised its adjusted earnings per share outlook to a range of $1.83 to $1.86 from its previous guidance range of $1.80 to $1.85 per share. This compares to current consensus of $1.85 per share for fiscal 2012.

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