Guess?, Inc. ( GES - Analyst Report ) is slated to release its third quarter fiscal 2013 results after the market closes on November 28, 2012. The Zacks Consensus Estimate for the third quarter is pegged at 44 cents (year-over-year decline of 38.0%) on revenues of $621 million (year-over-year decline of 3.4%). Both earnings and revenue estimates are within management’s guidance range. The guidance includes earnings in the range of 42 cents to 46 cents and revenue in the range of $620 million to $630 million.

Second Quarter Recap

Guess? Inc’s second quarter fiscal 2013 adjusted earnings of 49 cents missed the Zacks Consensus Estimate of 50 cents per share and declined 41.7% from the year-ago earnings of 84 cents. Earnings declined due to a decrease in revenues.

Revenues in the quarter dropped 6.2% to $635.4 million from $677.2 million in the prior-year quarter due to lower traffic in North American stores. Revenue increased 0.4% on a currency neutral basis.

Operating margin shrank 770 basis points year over year to 9.0%, reflecting higher investment in advertising & marketing along with higher occupancy & selling costs in Europe.

Agreement of Estimate Revisions

Over the past 30 days, only 1 out of the 12 analysts covering the stock revised its earnings estimate for the third quarter of fiscal 2013 in the downward direction. None of the analysts revised their estimates in the positive direction.

Likewise for fiscal 2013, only 1 out of the 12 analysts changed its estimates in the negative direction over the past 30 days. None of the analysts have revised it in the opposite direction.

The downward revision in estimates can be attributed to the existing economic pressure, particularly in Europe along with foreign currency headwinds, which have been hurting margins consistently.

Magnitude of Estimate Revisions

The Zacks Consensus Estimate for the third quarter has remained static over the past 30 days at 44 cents. For fiscal year 2013, the Zacks Consensus Estimate declined from $2.18 per share to $2.17 per share over the past 30 days.

Surprise History

Guess? has missed earnings estimates in two of the last four quarters. It has met the earnings estimate in one quarter while surpassing estimates in one of the last four quarters. The earnings surprise ranges from a negative 2.74% to a positive 15.38%, with the average earnings surprise is 3.55%.

Our Recommendation

Currently, we have a Neutral recommendation on the stock. Guess? holds a Zacks #5 Rank (short-term ‘Strong Sell’ rating) in sharp contrast to its peer, Gap, Inc. ( GPS - Analyst Report ) , which holds a Zacks #1 Rank (short-term ‘Strong Buy’ rating).