Guess Reports Q1 Earnings Beat, Here's What Two Analysts Are Saying

by Jayson Derrick

June 3, 2015 11:51 AM | 2 min read | Make a Comment

Guess?, Inc.GES

on Tuesday reported its

first quarter results. By Wednesday morning, two of Wall Street's top analysts commented on the print. Wunderlich: ‘Full Speed Ahead' Eric Beder of Wunderlich commented in a note that Guess' Q1 EPS beat and revenue miss was attributed to currency headwinds. The analyst noted that management introduced better assortments (and highly average unit revenues), tightly management inventory levels, and began to optimize the store fleet. Revenue was also "dragged" down due to earlier fashion misses that the analyst noted is "now fixed." North American comps of negative 5.9 percent was attributed to the disruptions caused by the West Coast port issue and weather issues in the East Coast and Canada. On the other hand, eCommerce performed well with top-line growth of 14 percent in the quarter, marking the 15th consecutive quarter of growth. "Management did not despair and told investors that it is going full speed ahead with robust eCommerce growth, expansion of the Marciano line, and even better denim-driven assortment," Beder commented in his note. "We reiterate our Buy rating and believe management has enough momentum on its side to offset major foreign exchange declines." Beder continued that in the near term foreign exchange will continue obscuring any progress, although this is an industry-wide issue and not specific to Guess. Bottom line, Guess phased out its old inventory that failed to connect with consumers. With a new and improved inventory, the company saw "solid" sales trends, driven by dresses, denim, and women's woven tops. Moving forward, the improved product offerings should positively impact results in the back half of the year as a new and "sexier" marketing campaign should bring attention to the product. Shares remain Buy rated with a $20 price target. B Riley: Maintains At Neutral Following Guess' print, Jeff Van Sinderen of B. Riley & Co. maintained a Neutral rating with an unchanged $21 price target. In a brief note, the analyst noted that the company's reported revenue of $479 million missed consensus estimates of $484 million while its earnings per share of $0.04 exceeded the loss of $0.05 per share analysts were expecting. In addition, Guess' second quarter earnings per share guidance of $0.12 to $0.16 falls short of the consensus estimate of $0.17.

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Posted In: Analyst Color Analyst Ratings B. Riley Eric Beder fashion Guess Jeff Van Sinderen retailers Wunderlich

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