American clothier, Guess, revealed in its second quarter earnings conference call on Wednesday that it will close 50 stores over the next 18 months.
Guess has been streamlining its business by reorganizing and simplifying operations in order to cut costs in hopes of reviving its performance. Part of that plan includes consolidating its four brands into two, merging Guess and Marciano, and Guess Factory and G by Guess.
The company also recently lowered its third quarter and fiscal year 2015 outlook, after recording a disappointing drop in net earnings of 50.5% ($22 million) for its second quarter, compared to last year’s $44.3 million. Shares also decreased 50 percent to $0.26, down from last year’s $0.52.
CEO Paul Marciano said, “Overall second quarter earnings were consistent with our expectations but were short of our operational goals due to a soft environment in North America, where traffic and promotional activity have continued to put our brick and mortar stores under pressure.”
Marciano also expressed his concern for the fall collection’s sales recorded so far in North America. However, the company’s North American e-commerce sales could be promising. E-commerce sales increased almost 50 percent in the second quarter.
Third quarter consolidated net revenues are expected to reach between $590 million and $600 million with shares in the range of $0.15 to $0.20.
As for the year, revised net revenues are expected to fall between $2.44 billion and $2.48 billion, compared to the company’s prediction in May of $2.53 billion to $2.57 billion. Shares are forecast to be in the range of $1.05 to $1.20, compared to May’s predicted $1.40 to $1.60.