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Source: Guess?

Guess? (NYSE:GES) delivered better-than-expected earnings for the third quarter of fiscal 2015. However, sales are still under serious pressure, and forward guidance was also quite disappointing. Let's go through the latest earnings report from Guess? to highlight the main takeaways for investors.

The top line
Total sales during the quarter ended on Nov. 1 fell 3.9% to $589.8 million, from $613.5 million in the same quarter last year. Measured in constant currency, sales decreased 2.6% year over year. Net sales were lower than the $595.3 million that Wall Street analysts forecasted on average.

E-commerce sales in North America were the bright spot in the report, with a big 40% increase during the quarter. However, that wasn't enough to buffer the decline in comparable-store sales: Comps in North America, which includes e-commerce, decreased 4.8% in U.S. dollars and 3.5% in constant currency.

Sales in Europe fell 5.5% to $189.9 million in the third quarter of fiscal 2015, from $200.9 million in the prior-year period. In local currency, net revenue in Europe decreased 2.5%.

Revenues in Asia fell 2% to $71.3 million, while sales in constant currencies decreased 5.1%.

Sales in the North American wholesale segment were relatively flat at $53.5 million, and revenues in the licensing segment decreased 1.4% to $32.0 million.

Margins and earnings
Gross profit margins declined to 36.3% of revenues versus 37.2% in the year-ago quarter. Falling sales and an intensely promotional environment are clearly having a negative impact on profitability, but gross margin held on relatively well considering the context.

Operating margin decreased 390 basis points to 4.2% of sales, compared with an adjusted operating margin of 8.1% in the same quarter last year. This material decline in operating margin was driven by higher store impairment charges and the negative impact of fixed costs on declining sales, as well as more markdowns in North America.

Net earnings came in at $20.8 million, a 41.3% decrease versus adjusted net earnings of $35.4 million in the third quarter of fiscal 2014. Diluted earnings per share decreased 42.9% to $0.24, compared with adjusted diluted earnings per share of $0.42 in the prior-year quarter.

Guess? still managed to beat earnings expectations, Wall Street analysts were on average expecting $0.18 in earnings per share during the quarter, according to data compiled by Thomson Reuters.

Moving forward
CEO Paul Marciano highlighted the strong growth in e-commerce sales during the period but admitted that overall conditions could deteriorate in North America during the coming quarter. Marciano sees some positive trends in Europe, though:

Third-quarter results were within the range of our expectations from an operations perspective. In North America, store traffic and the promotional environment remained headwinds. We continued to see good momentum in our North American e-commerce business with an almost 40% increase in the top line. Going into the fourth quarter, overall trends in North America have softened compared to the third quarter. In Europe, softer traffic in the third quarter drove lower retail sales than expected; however, trends have improved so far in the fourth quarter. We are also pleased with our European wholesale orders for Spring-Summer '15, as same-store buys are up year over year.

For the fourth quarter of fiscal 2015, management expects revenues in the range of $695 million to $710 million and earnings per share of $0.53 to $0.63. Wall Street analysts are on average expecting $747.1 million in sales and $0.69 in earnings per share, so guidance looks quite weak in comparison with expectations.

Management also cut its guidance for the fiscal year ending on Jan. 31, 2015. Guess? expects sales of $2.42 billion to $2.43 billion, down versus a prior guidance of $2.44 billion to $2.48 billion. Earnings-per-share guidance was also reduced to between $1 and $1.10, in comparison with an earlier guidance of $1.05 to $1.20 during the year. 

Guess? has been facing declining sales and falling earnings over the past several quarters. While earnings per share were better than expected, the trend in revenues is still quite worrying, so there is no clear sign of a sustained turnaround in the business.  

Andrés Cardenal has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.