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Guess Q3 Report Filled With Uncertainty

Guess Stock: Q3 Report Expectations For GES Filled With Uncertainty

Guess?, Inc. GES is scheduled to report its FQ3 results on Wednesday. While the international businesses are likely to have continued to recover, there are concerns surrounding the domestic operations, Wunderlich’s Eric Beder said in a report. He maintains a Buy rating on the company, with a price target of $27.

The Street’s expectations of a slow turnaround at Guess appear realistic, analyst Beder mentioned.

International Versus Domestic

There is potential upside from international and easy comps, Beder stated. He added, “We believe the company's international businesses, spearheaded by Europe have continued to recover; these gains will become even more apparent as FX issues subside in 4Q.”

The analyst expressed concern regarding the company’s domestic operations, since management seemed to have been aggressive in “moving forward outerwear and seasonal goods, which could be negatively affected by warmer weather.”

Beder estimated the North American same-store sales for Guess at -1.5 percent, which is better than the consensus expectation of -2.9 percent.

Q4 Guide

The Q4 guide could be conservative, the analyst commented. He added, “We are not expecting material positives in the near term from the domestic market, as we are increasingly convinced the company will need to materially pare back stores over the next few years and focus on the core GUESS? concepts.” The company had raised its 2017 outlook in August.

At last check, Guess was down 0.69 percent at $15.76.

Image Credit: By Eva Rinaldi from Sydney Australia (Gigi Hadid) [CC BY-SA 2.0], via Wikimedia Commons

DateFirmActionFromTo
Aug 2016JefferiesMaintainsHold
Jul 2016PiperJaffrayDowngradesNeutralUnderweight
May 2016Miller TabakUpgradesSellHold

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