UPDATE: Piper Jaffray Downgrades Guess? on Choppy US Retail Environment

In a report published Friday, Piper Jaffray analyst Erinn E. Murphy downgraded the rating on Guess? GES from Overweight to Neutral, and lowered the price target from $35.00 to $31.00. In the report, Piper Jaffray noted, “While we flagged near-term concern in early August by lowering our 2H estimates for GES on increasing concerns about U.S. traffic trends, the recent barrage of lackluster specialty retail reporters has caused us to rethink our fundamental rating behind GES shares and lower our rating to Neutral. Our long-term view remains unchanged: GES is a turnaround candidate and margins should recover from the 8%-range to mid-teens over time, with improved product and execution, stability in Europe and growth in emerging markets. That said, given the significant volatility in the US retail environment (42% of sales), we believe the turnaround timeline is extended. We are trimming our EPS for Q2 to $0.34, lowering our FY14 EPS from $1.76 to $1.70 and our FY15 EPS from $2.32 to $2.10, and adjusting our PT from $35 to $31.” Guess? closed on Thursday at $28.78.