Guess Q1 income drops, still beats Street

Los Angeles Guess said Thursday that lower inventory and reduced spending helped the retail chain’s fiscal year 2010 first-quarter earnings beat Wall Street expectations.

Net profit for the first quarter, ended May 2, slipped 32% to $32.5 million from $47.8 million for the same period a year earlier.

Revenues also fell close to 10% to $441.2 million, and same-store sales dropped 6.0%.

Although the company experienced lower sales, Guess credited reduced inventories and capital spending for helping it exceed both internal and Wall Street expectations. “These efforts generated solid operating cash flows, further strengthening our capital infrastructure,” said Guess CEO Paul Marciano.

Looking ahead to the second quarter, which ends Aug. 1, the company reported that it expects consolidated net revenues to range between $465 million and $485 million.