Guess?, Inc. (GES - Free Report) is in solid shape, courtesy of its solid digital operations. Also, the company’s strategic endeavors to aid growth are noteworthy.
Moreover, analysts are optimistic regarding the stock’s performance. The Zacks Consensus Estimate for third-quarter fiscal 2021 earnings has improved to 9 cents per share from a loss of 5 cents in the past 30 days. Clearly, these upsides have boosted investors’ sentiments as shares of the company have surged 21.4% in the past three months compared with the industry’s growth of 9.9%.
Let’s delve deeper.
What’s Driving Guess?’s Performance?
Guess? has been benefitting from its solid digital efforts. In fact, the company’s online business continued to remain operational amid the coronavirus outbreak. Notably, Guess?’s e-commerce business in North America and Europe grew 9% year over year in the second quarter of fiscal 2021. Also, management is optimistic about its online growth in the remaining half of 2020. In this regard, the company is increasing its marketing investment, repositioning product offerings and finishing the implementation of Salesforce platform.
Well, Guess? has been on track with its digital-first initiative and investing in brand building through social media platforms such as Facebook (FB - Free Report) , Twitter (TWTR - Free Report) , Instagram and YouTube. Further, the company has been focusing on linking brick-and-mortar stores, e-commerce and mobile sales to improve its online operations. This is likely to have enabled customers to reserve merchandise online and pick them up in stores.
Earlier, management stated that they are on track with upgrading online platform in the European and American regions. It is also planning to improve e-commerce operations by undertaking efforts such as better data capturing, improved customer profiling, personalized marketing and relationship management. These efforts are expected to help the company enhance customer base and enrich their experience, which is likely to drive sales.
Guess?, which shares space with Hanesbrands (HBI - Free Report) , is on track with boosting operating margin through cost saving efforts, enhancing operating efficiencies as well as gross margin improvement efforts. Moreover, the company’s focus on its customer centricity initiatives including global ecommerce strategy, salesforce implementation as well as omnichannel experience redesign projects bodes well.
Also, it has launched a new customer 360 project to enhance personalization, customer data integration, journey engagement as well as results analysis. Moreover, management believes that such robust customer-centric efforts will increase the company’s e-commerce business penetration to represent more than 23% of its direct-to-consumer business in the next three to five years.
Apart from these, the company is on track with reopening stores as restrictions to check COVID-19 are being lifted gradually. As of Aug 1, nearly 95% of the company’s stores were reopened. We believe that, the aforementioned upsides are likely to keep driving this Zacks Rank #2 (Buy) company’s performance.
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