Guess is just the latest retailer dealing with sales woes, as the company announced Wednesday that it plans to close 50 stores through the next year if it can’t renegotiate reductions in rent.
The possible closures were just one part of what was overall a poor quarter for the denim company, which has been struggling to turn around its sluggish business in the Americas for the last several quarters.
Shares of Guess, already down 22 percent year-to-date, plummeted 14 percent after the company posted earnings per share of 11 cents ($521 million in revenue), missing Wall Street’s expectation of 14 cents per share.
News was good abroad, where sales were up 16.4% in Europe and 9.8% in Asia. Guess opened 26 stores in Europe and 14 in Asia during the quarter.
But again the company’s Americas business under-performed, with revenue in the region down 4.7%. Sames-store sales including e-commerce fell 4.9%.
Guess detailed a plan to help turn around its business in the Americas, including an overhaul of its supply chain and a focus on rent reductions and store closures.
To date, the company has renegotiated 32 leases and is considering doing the same at another 29 of its locations, according to CEO Victor Herrero. The company has closed 52 stores since the beginning of last year. It’s fleet currently stands at 916 stores worldwide.
Guess significantly cut its yearly outlook for fiscal 2016, saying it now expects per-share earnings in the range of 42-52 cents, down from the previously expected range of 62-75 cents.