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Guess? (GES) Benefits From Brand Strength & Key Strategies
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Guess? Inc. (GES - Free Report) is benefiting from ongoing momentum and strong customer response to its brand. The company is committed to its six key strategies and made remarkable progress against each of them. However, a volatile shopping environment globally remains a threat.
Let’s delve deeper.
Growth Efforts in Place
Guess? remains optimistic about its robust global platform, which will facilitate growth and expansion of the company’s Guess and Marciano businesses, alongside rag & bone, which will mark the company’s first acquisition. These factors aided the company’s solid fourth-quarter fiscal 2024 results, with the top and the bottom line increasing year over year and beating the Zacks Consensus Estimate.
Management is positive about fiscal 2025, wherein it expects to surpass $3 billion in revenues for the first time, supported by an impressive growth plan for its core business, the integration of rag & bone into its portfolio and the introduction of Guess Jeans to cater to the demand from Generation Z consumers. Guess? anticipates revenues to grow in the range of 11.5-13.5% in the fiscal 2025.
Image Source: Zacks Investment Research
Strategic Plan on Track
Guess? is encouraged about growth opportunities ahead. The company is focused on its strategic business plan. To this end, the company is committed to its six key strategies and has made remarkable progress against each of them. The core strategies include organization and culture, functional capacities, brand relevance with three main consumer groups (heritage, Millennials and Generation Z customers), customer focus, product brilliance and international footprint.
As part of its growth objective, Guess? recently acquired rag & bone, to expand its product offering and customer base. The acquisition reinforces its long-term growth strategy to make a bigger and more powerful business and deliver the best products to its customers. In an attempt to optimize its operations, management is on track to convert its distribution center operation in the United States to a third-party provider. The move is likely to have a positive impact on cost structure. As part of the Customer 360 project, management launched its CRM platform, which gives the company a 360 view of the customer and fuels improved personalization, marketing and promotional strategies.
In terms of brand elevation and category expansion, the company intends to utilize the strength of its Guess and Marciano brands. The company is enhancing the customer experience while implementing various upgrades to its store and e-commerce infrastructure to improve the ease of shopping and increase customer conversion. The company is on track with supply chain and inventory management to counter supply chain disruptions.
Hurdles on the Way
Guess? is operating in a volatile shopping environment globally, stemming from inflationary headwinds and a high-interest rate environment. Concurrently, the company is witnessing persistent weakness across its Americas retail business amid a dynamic macroeconomic environment.
Rising operating costs and expenses are major threats to Guess?. During the second quarter of fiscal 2024, the company’s adjusted SG&A expense increased 8% (up 7% at cc) to $275 million. We note that the company is seeing moderate inflationary pressures on its cost structure. In its last earnings call, management highlighted that it is battling supply-chain bottlenecks stemming from the Red Sea crisis.
That being said, the company’s upsides mentioned are likely to keep offering respite. The Zacks Rank #3 (Hold) company’s shares have surged 33.4% in the past three months against the industry’s decline of 13.4%.
Top 3 Picks
Ralph Lauren (RL - Free Report) , which designs, markets and distributes lifestyle products, currently sports a Zacks Rank #1 (Strong Buy). RL has a trailing four-quarter earnings surprise of 18.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year sales and earnings indicates growth of 2.7% and 22.7%, respectively, from the year-ago reported number.
Crocs (CROX - Free Report) , which designs, develops, manufactures, markets, distributes and sells casual lifestyle footwear and accessories, currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Crocs’ current fiscal-year sales and earnings suggests growth of 3.9% and 2.9%, respectively, from the year-ago reported numbers. CROX has a trailing four-quarter earnings surprise of 14.2%, on average.
Gildan Activewear Inc. (GIL - Free Report) , a manufacturer and marketer of premium quality branded basic activewear, carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Gildan Activewear’s current financial-year sales and earnings suggests growth of 1.7% and 14.4% from the year-ago period’s reported figure. GIL has a negative trailing four-quarter earnings surprise of 0.7%, on average.
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Guess? (GES) Benefits From Brand Strength & Key Strategies
Guess? Inc. (GES - Free Report) is benefiting from ongoing momentum and strong customer response to its brand. The company is committed to its six key strategies and made remarkable progress against each of them. However, a volatile shopping environment globally remains a threat.
Let’s delve deeper.
Growth Efforts in Place
Guess? remains optimistic about its robust global platform, which will facilitate growth and expansion of the company’s Guess and Marciano businesses, alongside rag & bone, which will mark the company’s first acquisition. These factors aided the company’s solid fourth-quarter fiscal 2024 results, with the top and the bottom line increasing year over year and beating the Zacks Consensus Estimate.
Management is positive about fiscal 2025, wherein it expects to surpass $3 billion in revenues for the first time, supported by an impressive growth plan for its core business, the integration of rag & bone into its portfolio and the introduction of Guess Jeans to cater to the demand from Generation Z consumers. Guess? anticipates revenues to grow in the range of 11.5-13.5% in the fiscal 2025.
Image Source: Zacks Investment Research
Strategic Plan on Track
Guess? is encouraged about growth opportunities ahead. The company is focused on its strategic business plan. To this end, the company is committed to its six key strategies and has made remarkable progress against each of them. The core strategies include organization and culture, functional capacities, brand relevance with three main consumer groups (heritage, Millennials and Generation Z customers), customer focus, product brilliance and international footprint.
As part of its growth objective, Guess? recently acquired rag & bone, to expand its product offering and customer base. The acquisition reinforces its long-term growth strategy to make a bigger and more powerful business and deliver the best products to its customers. In an attempt to optimize its operations, management is on track to convert its distribution center operation in the United States to a third-party provider. The move is likely to have a positive impact on cost structure. As part of the Customer 360 project, management launched its CRM platform, which gives the company a 360 view of the customer and fuels improved personalization, marketing and promotional strategies.
In terms of brand elevation and category expansion, the company intends to utilize the strength of its Guess and Marciano brands. The company is enhancing the customer experience while implementing various upgrades to its store and e-commerce infrastructure to improve the ease of shopping and increase customer conversion. The company is on track with supply chain and inventory management to counter supply chain disruptions.
Hurdles on the Way
Guess? is operating in a volatile shopping environment globally, stemming from inflationary headwinds and a high-interest rate environment. Concurrently, the company is witnessing persistent weakness across its Americas retail business amid a dynamic macroeconomic environment.
Rising operating costs and expenses are major threats to Guess?. During the second quarter of fiscal 2024, the company’s adjusted SG&A expense increased 8% (up 7% at cc) to $275 million. We note that the company is seeing moderate inflationary pressures on its cost structure. In its last earnings call, management highlighted that it is battling supply-chain bottlenecks stemming from the Red Sea crisis.
That being said, the company’s upsides mentioned are likely to keep offering respite. The Zacks Rank #3 (Hold) company’s shares have surged 33.4% in the past three months against the industry’s decline of 13.4%.
Top 3 Picks
Ralph Lauren (RL - Free Report) , which designs, markets and distributes lifestyle products, currently sports a Zacks Rank #1 (Strong Buy). RL has a trailing four-quarter earnings surprise of 18.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year sales and earnings indicates growth of 2.7% and 22.7%, respectively, from the year-ago reported number.
Crocs (CROX - Free Report) , which designs, develops, manufactures, markets, distributes and sells casual lifestyle footwear and accessories, currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Crocs’ current fiscal-year sales and earnings suggests growth of 3.9% and 2.9%, respectively, from the year-ago reported numbers. CROX has a trailing four-quarter earnings surprise of 14.2%, on average.
Gildan Activewear Inc. (GIL - Free Report) , a manufacturer and marketer of premium quality branded basic activewear, carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Gildan Activewear’s current financial-year sales and earnings suggests growth of 1.7% and 14.4% from the year-ago period’s reported figure. GIL has a negative trailing four-quarter earnings surprise of 0.7%, on average.