Denim brand Guess has said the year ahead will be challenging as it saw first quarter profits fall 15.2% despite revenues rising 9.8 % to $592.2m (£363.6m).
For the first quarter ended April 30 profits fell to $42.7m (£26.2m), which the company said was due to strong sales being outweighed by the costs of retail expansion in Europe and the US.
Total net revenue for the first quarter increased 9.8% to $592.2m (£363.6m) with European revenues seeing a 12.4% growth to $210.2m (£129.1m).
Paul Marciano, chief executive officer, said: “We are pleased with our first quarter performance, with all of our businesses delivering earnings within or beyond our previous expectations. We continued to expand the global presence of the Guess brand, with each of our segments growing in the quarter.
“Europe and Asia continued to drive that expansion, individually delivering double digit revenue increases, which combined to represent almost two-thirds of the company’s top line growth. Our team executed well, managing costs and inventories tightly, which produced an operating margin that was two full points stronger than our previous expectations.”
Marciano added that the year “is not without its challenges”. He said the industry is experiencing rising commodity and input costs with added uncertainty in many economies.