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Guess?'s (GES) Digital Operations Aiding Growth Amid Soft Traffic
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Guess?, Inc. (GES - Free Report) is benefiting from its solid digital operations. Moreover, the company’s customer-centric initiatives, undertaken to drive growth, among others bode well. However, Guess? is grappling with pandemic-induced hurdles like reduced customer traffic in stores. Let’s discuss.
What’s Working in Guess?’s Favor?
Guess?’s impressive e-commerce business has been yielding amid pandemic-induced social distancing trends. Notably, its e-commerce business in North America and Europe increased 19% year over year in the third quarter of fiscal 2021. In fiscal second quarter, Guess?’s e-commerce business in these regions rose 9%. Moreover, management is optimistic about its online growth in fiscal fourth quarter.
Well, Guess? is on track with its digital-first initiative and investing in brand building through social media platforms. Further, the company is focused on integrating brick-and-mortar stores, e-commerce and mobile sales to improve online operations. These efforts are helping customers reserve merchandise online and pick them up in stores. In order to augment its e-commerce operations, the company is also resorting to data capturing, customer profiling and personalized marketing as well as undertaking efforts to enhance its brand.
Further, Guess? has been committed to enhance operating margin through cost-saving efforts and operational efficiencies. Moreover, it is focusing on customer-centric initiatives that include global e-commerce strategy, salesforce implementation and omnichannel experience redesign projects. In its last earnings call, management stated that it has completed the implementation of the salesforce platform in the United States, Canada and Europe except Russia. The company had also highlighted its plans of implementing the platform in Russia during February 2021. Guess? is impressed with the performance of the platform that enables better customer experience and improved conversion as well as engagement. Also, it expects to see solid online growth via these platforms.
Guess? is progressing well with its customer 360 project to enhance personalization, customer data integration, journey engagement as well as results analysis. In fact, management expects to conclude the full implementation of the Customer 360 project by the end of 2021.
Pandemic-Induced Hurdles
Guess?’s net revenues declined 7.6% in the third quarter of fiscal 2021, thanks to lower demand stemming from the coronavirus pandemic. Per the last earnings call, the company anticipates sales in the fiscal fourth quarter to have declined in low to mid-twenties. Lower customer traffic in stores and temporary government-mandated store closures, especially in Europe and Canada, due to the coronavirus outbreak are likely to have affected sales. Also, permanent store closures are likely to have negatively impacted the company’s performance.
Nevertheless, we believe that the aforementioned upsides are likely to help Guess? stay poised amid these barriers. Notably, this Zacks Rank #3 (Hold) company’s stock has rallied 24.9% in the past three months compared with the industry’s growth of 5.1%.
PVH Corp. (PVH - Free Report) , which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 18%.
Crocs, Inc (CROX - Free Report) , which carries a Zacks Rank #2, has a long-term earnings growth rate of 15%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Guess?'s (GES) Digital Operations Aiding Growth Amid Soft Traffic
Guess?, Inc. (GES - Free Report) is benefiting from its solid digital operations. Moreover, the company’s customer-centric initiatives, undertaken to drive growth, among others bode well. However, Guess? is grappling with pandemic-induced hurdles like reduced customer traffic in stores. Let’s discuss.
What’s Working in Guess?’s Favor?
Guess?’s impressive e-commerce business has been yielding amid pandemic-induced social distancing trends. Notably, its e-commerce business in North America and Europe increased 19% year over year in the third quarter of fiscal 2021. In fiscal second quarter, Guess?’s e-commerce business in these regions rose 9%. Moreover, management is optimistic about its online growth in fiscal fourth quarter.
Well, Guess? is on track with its digital-first initiative and investing in brand building through social media platforms. Further, the company is focused on integrating brick-and-mortar stores, e-commerce and mobile sales to improve online operations. These efforts are helping customers reserve merchandise online and pick them up in stores. In order to augment its e-commerce operations, the company is also resorting to data capturing, customer profiling and personalized marketing as well as undertaking efforts to enhance its brand.
Further, Guess? has been committed to enhance operating margin through cost-saving efforts and operational efficiencies. Moreover, it is focusing on customer-centric initiatives that include global e-commerce strategy, salesforce implementation and omnichannel experience redesign projects. In its last earnings call, management stated that it has completed the implementation of the salesforce platform in the United States, Canada and Europe except Russia. The company had also highlighted its plans of implementing the platform in Russia during February 2021. Guess? is impressed with the performance of the platform that enables better customer experience and improved conversion as well as engagement. Also, it expects to see solid online growth via these platforms.
Guess? is progressing well with its customer 360 project to enhance personalization, customer data integration, journey engagement as well as results analysis. In fact, management expects to conclude the full implementation of the Customer 360 project by the end of 2021.
Pandemic-Induced Hurdles
Guess?’s net revenues declined 7.6% in the third quarter of fiscal 2021, thanks to lower demand stemming from the coronavirus pandemic. Per the last earnings call, the company anticipates sales in the fiscal fourth quarter to have declined in low to mid-twenties. Lower customer traffic in stores and temporary government-mandated store closures, especially in Europe and Canada, due to the coronavirus outbreak are likely to have affected sales. Also, permanent store closures are likely to have negatively impacted the company’s performance.
Nevertheless, we believe that the aforementioned upsides are likely to help Guess? stay poised amid these barriers. Notably, this Zacks Rank #3 (Hold) company’s stock has rallied 24.9% in the past three months compared with the industry’s growth of 5.1%.
Some Solid Picks
G-III Apparel Group, Ltd. (GIII - Free Report) , which sports a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 11.6%.You can see the complete list of today’s Zacks #1 Rank stocks here.
PVH Corp. (PVH - Free Report) , which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 18%.
Crocs, Inc (CROX - Free Report) , which carries a Zacks Rank #2, has a long-term earnings growth rate of 15%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>