Guess Inc. said Thursday its net income rose 10 percent in the third quarter, beating expectations. But the apparel retailer cut its full-year revenue and profit outlook, citing the slowing economy.

Los Angeles-based Guess after the market close reported net income of $64 million (69 cents per share) for the quarter ended Nov. 1, compared with $58.3 million (62 cents) a year ago. Analysts surveyed by Reuters Estimates had on average expected earnings of 63 cents per share.

Sales grew 12.5 percent to $527.9 million. Growth was strong in all segments but the company said operating margins fell due to lower same-store sales in North America and higher costs in Europe.

“We remain committed more than ever to our long term strategies for growth and profitability,” Chief Executive Paul Marciano said in a statement. “We do expect that the current market changes in the global economy will continue for some time.”

Guess said it now expects fiscal 2008 earnings of between $2.27 to $2.32 per share, down from earlier guidance of $2.47 to $2.53. Revenue is now expected at $2.03 billion to $2.07 billion, compared with an earlier outlook of $2.06 billion to $2.11 billion.

Guess shares, which closed up 10 cents, or 1 percent, to close at $13.96, rose another 24 cents, or 2 percent in after-market trading on the New York Stock Exchange.