Shares of Guess (GES) careened 18% lower Thursday morning after the retailer took an axe to its full year-guidance amid trouble in Europe and revealed a deeper-than-expected 29% slump in second-quarter earnings.

Late Wednesday Los Angeles-based Guess disclosed an 8.5% tumble in North American same-store sales and a 15% plunge in net European revenue.

Guess acknowledged the trouble it is facing due to the economic turmoil in Europe, which has been hit by a deepening sovereign debt crisis.

“Our European business remained stable, as we grew in newer markets in the north and east, while economic conditions continued to affect consumers, particularly in the south,” CEO Paul Marciano said in a statement.

In response to the disappointing developments at Guess, analysts at Jefferies (JEF) cut their price target to $45 from $50, but maintained their “buy” rating.

Guess shares traded well below that bullish range, diving 18.57% to $27.31 in recent premarket trading on Thursday.

“Profitability is rapidly declining" across the company’s geographic segments and expansion and marketing expenditures "are likely to pressure earnings into next year,” Cowen analysts wrote, according to Dow Jones Newswires.

Guess logged a second-quarter profit of 49 cents a share in the second quarter, trailing the Street’s view by a penny.

More concerning, management downgraded its full-year EPS view to $2.15 to $2.30 on revenue of $2.62 billion to $2.65 billion. Analysts had been calling for far more robust EPS of $2.59 on stronger sales of $2.71 billion.

For the current quarter, Guess projected EPS of 42 cents to 46 cents, well below the Street’s view of 64 cents.

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