Clothing Store Guess Sinks After an Earnings Miss in the Third Quarter

Shares of clothing and accessory retailer Guess saw its shares sink on Wednesday after the company reported third quarter financial results.

For the quarter, Guess saw earnings of 13 cents a share, coming in 3 cents short of what analysts had expected. Revenue however was a beat at $605 million while analysts expected $603 million. Fourth quarter guidance was also in line with expectations.

For the quarter, comparable sales in the Americas were up 3 percent while analyst estimates had called for 2.1 percent.

Shares dropped as much as 15% in after-hours trading on the results.

“I am very encouraged by the overall sales momentum we are experiencing with positive comps in all regions in the third quarter, which speaks to the global strength and relevancy of the Guess brand,” Chief Executive Victor Herrero said optimistically in a statement.

He also said, “I am very pleased to report another quarter of strong operating performance with double-digit revenue growth, adjusted operating profit growth of 70% and adjusted operating margin finishing higher than our expectations, despite unexpected currency headwinds.”

“This was our second consecutive quarter of double-digit revenue growth and the first time in eight years that we achieved double-digit revenue growth in the third quarter. It is important to know that this is another quarter of positive comps in all regions,” he added.

The company also said that it has been cooperating with an European Commission investigation into whether the company violated European competition rules.

Guess said it “is likely to reach an agreement with the European Commission that is expected to result in a fine ranging from EUR37.0 million to EUR40.6 million ($42.4 million to $46.6 million).”

Guess shares are up 25% YTD. Earlier this year the company’s co-Founder Paul Marciano resigned as executive chairman after allegations of improper conduct from model Kate Upton.

Disclaimer: We have no position in Guess’, Inc. (NYSE: GES) and have not been compensated for this article.