Stock Buy: Guess?, Inc

Zacks Investment Research
updated | Zacks.com

Guess?, Inc. (GES) continues to see bullish earnings forecasts. The current full-year Zacks Consensus Estimate of $2.50 per share is up from $2.18 over the past 3 months. For the following year, analysts polled by Zacks are calling for earnings of $2.85 per share, versus the 3 months-ago level of $2.48.

Company Description

Guess?, Inc. designs, markets, distributes and licenses contemporary apparel, denim, handbags, watches, footwear and other related consumer products.

As of August 1, 2009, the Company operated 431 retail stores in the United States and Canada and 723 retail stores outside of North America, of which 106 were directly owned.

Estimates Continue to Rise on Strong Momentum

The company continues to see bullish earnings forecasts. The current full-year Zacks Consensus Estimate of $2.50 per share is up from $2.18 over the past 3 months. For the following year, analysts polled by Zacks are calling for earnings of $2.85 per share, versus the 3 months-ago level of $2.48.

Shares of GES have surged past the market by about 150% over the past year.

A Record Quarter

Guess announced record third-quarter earnings of 69 cents per share, eclipsing the Zacks Consensus Estimate by 38%. Net revenue of $522.8 million dipped 1% year-over-year.

Management said each of the company’s businesses performed better than expected in both revenues and earnings as customer continued to respond well to product assortment in all markets around the world. Guess added that the company managed well, controlling costs and inventories tightly to protect profitability. This solid performance resulted in record third quarter earnings and a significant improvement in cash flows in the period.

Rewarding Shareholders

Guess also declared a dividend of 12.5 cents per share, which was paid out on December 31.

The company offers an industry-leading dividend yield of 1.14%.

Favorable Comparisons

Guess offers a return on equity of 25%, well above the industry average of 12%. The company’s net profit margin of 10% tops the industry average, which is at -2%

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