After the wholesale retail carnage the market saw several quarters back, lots of names emerged from the wreckage. Stores were adapting their strategies, using their brick-and-mortar locations to present one leg of an omni-channel presence in order to breathe life into their brands. Some retailers did it very well, as evident by their earnings. Others didn’t fare nearly as well. Today’s Bear of the Day is one such retailer that just had a rough quarter they hope to sweep under the rug.
I’m talking about Zacks Rank #5 (Strong Sell) Guess? (GES - Free Report) . Guess?, Inc. designs, markets, distributes, and licenses lifestyle collections of apparel and accessories for men, women, and children. It operates through five segments: Americas Retail, Americas Wholesale, Europe, Asia, and Licensing. The company's clothing collection includes jeans, pants, skirts, dresses, shorts, blouses, shirts, jackets, knitwear, and intimate apparel. It also grants licenses to manufacture and distribute various products that complement its apparel lines, such as eyewear, watches, handbags, footwear, kids' and infants' apparel, outerwear, swimwear, fragrance, jewelry, and other fashion accessories.
Last quarter, the company reported EPS of 70 cents versus expectations calling for 76 cents. Revenues were a bit light as well, coming in at $837 million, three million shy of the mark. That was the second consecutive miss for the stock.
This was part of the reason why analysts cut their expectations. Over the last week, analysts have cut their estimates for the current quarter and current year. The bearish sentiment has brought the Zacks Consensus Estimate for the current quarter down from a 15-cent loss to a 25-cent loss. The current year number has come down from $1.42 to $1.26, helping to put the stock price under pressure.
The Textile – Apparel industry ranks in the Top 39% of our Zacks Industry Rank. Other stocks in that industry with favorable Zacks Ranks include Zacks Rank #1 (Strong Buy) stocks Columbia Sportswear COLM and G-III Apparel Group GIII.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>