We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Guess (GES) Up 7.8% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Guess (GES - Free Report) . Shares have added about 7.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Guess due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Guess? Q1 Loss Narrower Than Expected, Revenues Dip Y/Y
Guess? reported first-quarter fiscal 2024 results, wherein the top and bottom lines came ahead of their respective Zacks Consensus Estimate. However, both metrics declined year over year.
The company gained strength from its international business. This, along with robust product margins and cost-control measures, helped counter weakness in the Americas Retail business, which stemmed from soft customer traffic in stores. Guess’s focus on elevating brands, together with its strong global distribution and diversified business model, has been working well.
Management continues to expect low single-digit top-line growth for fiscal 2024, wherein it also expects strong profit performance and robust cash flow generation.
Results in Detail
Guess? posted an adjusted loss of 7 cents per share against adjusted earnings of 24 cents reported in the year-ago quarter. Earnings were adversely impacted by share buybacks, partly made up of the positive impact from currency translations. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 28 cents per share.
Net revenues amounted to $569.8 million, surpassing the consensus mark of $555 million. The metric fell 4% from the figure reported in the year-ago quarter. On a cc basis, net revenues fell 2%, mainly due to a decline in the Americas business.
The company’s gross margin contracted to 40.7% from 41.6% reported in the year-ago quarter. As a percentage of sales, SG&A expenses increased to 40.6% from 35.3% in the prior-year quarter’s level.
In the first quarter of fiscal 2024, adjusted earnings from operations came in at $1.9 million, down 95% from $41.7 million reported in the year-ago quarter. The adjusted operating margin contracted to 0.3% from 7% owing to escalated costs, reduced government subsidies, increased markdowns and currency headwinds, somewhat negated by increased initial markups.
Segment Performance
Revenues in the Americas Retail segment fell 14% year over year on a reported basis and 13% at cc. Retail comp sales (including e-commerce) dropped 12% on a reported basis and at cc.
Americas Wholesale revenues fell 25% on a reported basis and 26% at cc. The segmental operating margin was 2.5%, flat year over year.
The Europe segment’s revenues jumped 2% on a reported basis and rose 5% at cc. Retail comp sales (including e-commerce) climbed 10% on a reported basis and increased 13% at cc. The segmental operating margin dropped to 0.6% from 5.9%.
Asia revenues advanced 26% on a reported basis and rose 34% at cc. Retail comp sales (including e-commerce) rose 1% on a reported basis, while the same increased 8% at cc. The segmental operating margin contracted to 5.4% from 11.6%.
Licensing revenues tumbled 10% on a reported basis and at cc. The segmental operating margin was 93.3% compared with 92.6% in the year-ago quarter.
Other Updates
This Zacks Rank #3 (Hold) company exited the quarter with cash and cash equivalents of $298.6 million and long-term debt and finance lease obligations of $159.4 million. Stockholders’ equity was $452 million. Net cash used in operating activities for the three months ended Apr 29, 2023, was $12.7 million.
GES announced a hike in its quarterly dividend, taking it from 22.5 cents to 30 cents, payable on Jun 23, 2023, to shareholders on record as of Jun 7.
In April 2023, the company repurchased nearly 2.2 million shares, amounting to $42.8 million.
Guidance
For fiscal 2024, the company anticipates revenues to grow in the range of 2-4%. Adjusted operating margin is likely to be 8.2-8.8%. GAAP operating margin is likely to be 8.1-8.7%.
Management expects adjusted earnings per share (EPS) of $2.60-$2.90 in fiscal 2024 compared with $2.74 recorded in fiscal 2023. On a GAAP basis, EPS is envisioned in the range of $2.01-$2.25 compared with $2.18 reported in fiscal 2023.
For the second quarter of fiscal 2024, management expects revenue growth to be flat to decline 1.5%. The company expects both adjusted operating margin and GAAP operating margin of 5.2% and 6%, respectively. On an adjusted basis, the company expects EPS of 35-42 cents per share. On a GAAP basis, it expects EPS of 30-36 cents for the second quarter of fiscal 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -18.33% due to these changes.
VGM Scores
Currently, Guess has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Guess has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Guess is part of the Zacks Textile - Apparel industry. Over the past month, V.F. (VFC - Free Report) , a stock from the same industry, has gained 8.5%. The company reported its results for the quarter ended March 2023 more than a month ago.
V.F. reported revenues of $2.74 billion in the last reported quarter, representing a year-over-year change of -3%. EPS of $0.17 for the same period compares with $0.45 a year ago.
For the current quarter, V.F. is expected to post a loss of $0.14 per share, indicating a change of -255.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -167.1% over the last 30 days.
V.F. has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Guess (GES) Up 7.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Guess (GES - Free Report) . Shares have added about 7.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Guess due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Guess? Q1 Loss Narrower Than Expected, Revenues Dip Y/Y
Guess? reported first-quarter fiscal 2024 results, wherein the top and bottom lines came ahead of their respective Zacks Consensus Estimate. However, both metrics declined year over year.
The company gained strength from its international business. This, along with robust product margins and cost-control measures, helped counter weakness in the Americas Retail business, which stemmed from soft customer traffic in stores. Guess’s focus on elevating brands, together with its strong global distribution and diversified business model, has been working well.
Management continues to expect low single-digit top-line growth for fiscal 2024, wherein it also expects strong profit performance and robust cash flow generation.
Results in Detail
Guess? posted an adjusted loss of 7 cents per share against adjusted earnings of 24 cents reported in the year-ago quarter. Earnings were adversely impacted by share buybacks, partly made up of the positive impact from currency translations. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 28 cents per share.
Net revenues amounted to $569.8 million, surpassing the consensus mark of $555 million. The metric fell 4% from the figure reported in the year-ago quarter. On a cc basis, net revenues fell 2%, mainly due to a decline in the Americas business.
The company’s gross margin contracted to 40.7% from 41.6% reported in the year-ago quarter. As a percentage of sales, SG&A expenses increased to 40.6% from 35.3% in the prior-year quarter’s level.
In the first quarter of fiscal 2024, adjusted earnings from operations came in at $1.9 million, down 95% from $41.7 million reported in the year-ago quarter. The adjusted operating margin contracted to 0.3% from 7% owing to escalated costs, reduced government subsidies, increased markdowns and currency headwinds, somewhat negated by increased initial markups.
Segment Performance
Revenues in the Americas Retail segment fell 14% year over year on a reported basis and 13% at cc. Retail comp sales (including e-commerce) dropped 12% on a reported basis and at cc.
Americas Wholesale revenues fell 25% on a reported basis and 26% at cc. The segmental operating margin was 2.5%, flat year over year.
The Europe segment’s revenues jumped 2% on a reported basis and rose 5% at cc. Retail comp sales (including e-commerce) climbed 10% on a reported basis and increased 13% at cc. The segmental operating margin dropped to 0.6% from 5.9%.
Asia revenues advanced 26% on a reported basis and rose 34% at cc. Retail comp sales (including e-commerce) rose 1% on a reported basis, while the same increased 8% at cc. The segmental operating margin contracted to 5.4% from 11.6%.
Licensing revenues tumbled 10% on a reported basis and at cc. The segmental operating margin was 93.3% compared with 92.6% in the year-ago quarter.
Other Updates
This Zacks Rank #3 (Hold) company exited the quarter with cash and cash equivalents of $298.6 million and long-term debt and finance lease obligations of $159.4 million. Stockholders’ equity was $452 million. Net cash used in operating activities for the three months ended Apr 29, 2023, was $12.7 million.
GES announced a hike in its quarterly dividend, taking it from 22.5 cents to 30 cents, payable on Jun 23, 2023, to shareholders on record as of Jun 7.
In April 2023, the company repurchased nearly 2.2 million shares, amounting to $42.8 million.
Guidance
For fiscal 2024, the company anticipates revenues to grow in the range of 2-4%. Adjusted operating margin is likely to be 8.2-8.8%. GAAP operating margin is likely to be 8.1-8.7%.
Management expects adjusted earnings per share (EPS) of $2.60-$2.90 in fiscal 2024 compared with $2.74 recorded in fiscal 2023. On a GAAP basis, EPS is envisioned in the range of $2.01-$2.25 compared with $2.18 reported in fiscal 2023.
For the second quarter of fiscal 2024, management expects revenue growth to be flat to decline 1.5%. The company expects both adjusted operating margin and GAAP operating margin of 5.2% and 6%, respectively. On an adjusted basis, the company expects EPS of 35-42 cents per share. On a GAAP basis, it expects EPS of 30-36 cents for the second quarter of fiscal 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -18.33% due to these changes.
VGM Scores
Currently, Guess has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Guess has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Guess is part of the Zacks Textile - Apparel industry. Over the past month, V.F. (VFC - Free Report) , a stock from the same industry, has gained 8.5%. The company reported its results for the quarter ended March 2023 more than a month ago.
V.F. reported revenues of $2.74 billion in the last reported quarter, representing a year-over-year change of -3%. EPS of $0.17 for the same period compares with $0.45 a year ago.
For the current quarter, V.F. is expected to post a loss of $0.14 per share, indicating a change of -255.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -167.1% over the last 30 days.
V.F. has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.