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Guess? (GES) to Report Q3 Earnings: What's in the Offing?

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Guess?, Inc. (GES - Free Report) is likely to post a decline in the top and bottom line when it reports third-quarter fiscal 2021 results on Dec 2. The Zacks Consensus Estimate for earnings has moved down by a couple of cents in the past 30 days to 6 cents per share. This suggests a decline of 72.7% from the year-ago quarter’s reported figure. We note that Guess? has a trailing four-quarter earnings surprise of 10.1%, on average. In the last reported quarter, the company reported an earnings surprise of 98.4%.

The consensus estimate for quarterly revenues is pegged at $511.3 million, which suggests a decline of 17% from the prior-year quarter’s tally.

Guess, Inc. Price and EPS Surprise

 

Guess, Inc. Price and EPS Surprise

Guess, Inc. price-eps-surprise | Guess, Inc. Quote

 

Key Factors to Note

Guess? is witnessing rising selling, general and administrative expenses, as a percentage of sales, for a while now. Incidentally, the metric expanded 570 basis points from the year-ago quarter’s level during fiscal second quarter. Also, the company is battling strained gross margin for quite some time. Apart from these, in the last earnings call, management highlighted that it expects sales decline in mid-teens range in the fiscal third quarter. We note that coronavirus-induced social distancing is adversely impacting productivity in the company’s retail locations.

Nevertheless, Guess? is benefiting from its online business, especially amid the pandemic. Incidentally, the company has been increasing its marketing investment, repositioning product offerings along with finishing the implementation of Salesforce platform to boost online growth. Further, management is undertaking actions to curb expenses like reducing discretionary expenses amid the pandemic.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Guess? this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Guess? carries a Zacks Rank #4 (Sell) and an Earnings ESP of +60.00%.

Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

PVH Corp. (PVH - Free Report) currently has an Earnings ESP of +179.29% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carnival Corporation (CCL - Free Report) currently has an Earnings ESP of +12.14% and carries a Zacks Rank #3.

Lululemon Athletica (LULU - Free Report) currently has an Earnings ESP of +0.88% and a Zacks Rank of 3.

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