Wunderlich Says 'Damn' The Guess Headwinds, 'Full Speed Ahead'

In a report published Wednesday, Wunderlich analyst Eric Beder maintained a Buy rating on

, with a price target of $20. Guess reported its 1Q EPS ahead of expectations, despite a revenue miss. The company's first quarter revenue was adversely impacted by earlier fashion misses and currency headwinds. The company's North American comps came in at -5.9 percent, missing the guidance, on account of disruptions caused by the West Coast port issue and extreme weather in the East Coast and Canada. eCommerce generated robust results for the quarter, with 14 percent top-line growth, marking the 15th consecutive quarter of growth. Attempting to offset the currency drag, Guess introduced better assortments, tightly managed inventory levels, and began to optimize the store fleet. "Unfortunately, in the near term FX, as we have seen for other multinational plays, has obscured any progress," analyst Eric Beder said. "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. We reiterate our Buy rating and believe management has enough momentum on its side to offset major FX declines," Beder wrote.