Soft traffic and promotional activity have continued to put Guess’ North American stores under pressure, but the retailer said it is encouraged by its North American online business, which soared 50% in the second quarter.
The company reported net earnings of $22 million, a 50.5% decrease compared to adjusted net earnings of $44.3 million for the year ago period, which prompted the retailer to cut its fiscal year outlook.
Sales for the quarter decreased 4.8% to $608.6 million, from $639 million a year ago. Same-store sales decreased 5.4%.
“So far in the third quarter, our fall collection in North American retail has not seen the traction with the consumer that we were expecting and we have adjusted our expectations for the back-half of the year accordingly,” said Paul Marciano, CEO.
The retailer is consolidating its organization in North America, in an effort to make it more efficient.
“In addition, we are continuing to rationalize our North America store portfolio and also have the flexibility to further optimize our retail footprint in the coming years,” Marciano added.