Guess shares jump despite flat second quarter sales

Guess? delivered improved second quarter earnings despite flat sales and boosted its EPS guidance for the following quarter, as the company continued to restructure its operations.

Sales declined 0.2% to $545m for the company's fiscal 2017 second quarter ended 30 July (consensus: $550.5m), yet earnings per share jumped from a loss of nine cents one year ago to 14 cents (consensus: $0.07).

"I had highlighted on our prior earnings calls that the first six months of the year would be a transition period. This transition is now behind us and the investments we have made so far are expected to start generating revenue growth for the Company in the third quarter, accelerating into the fourth quarter," Guess? boss Victor Herrero said.

Like-for-like sales dropped 2.5% (consensus: -4.2%), continuing the declining sales trend that had been in place since the start of 2011.

The contemporary apparel-maker's bottom line was boosted by a one-off $22.3m gain from the sale of a minority interest investment.

In constant currency terms, quarterly sales fell by 1% in the Americas and 4% in Asia, but rose by 6% in Europe.

Tourist-related demand in the US and Canada underperformed the chain, the company said in a statement.

Comparable store sales in Greater China were below expectations as the company continued to transition towards a direct model, Herrero said.

For the full-year, Guess forecast EPS of between 62 to 75 cents, up from its previous guidance for between 55 and 75 cents (consensus: 60 cents).

As of 13:44 BST shares in Guess were up by 18.46% to $17.65.