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Guess Earnings Preview

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Guess (NYSE: GES) reports earnings after Wednesday's close.The forecast is for earnings of $0.29 a share on revenue of $617.9 million.

Topeka Capital Markets Dorothy Lanker is sounding cautious in front of the report:

"After delivering a slightly better 1Q in the challenging retail environment which continued into 2Q, GES put 2Q guidance much lower than expected: North America remained highly promotional, Europe better at retail vs.wholesale, Asia was slowing and licensed product had yet to deliver improved results. GES was making progress on strategic initiatives, with 2H14 to benefit from better product, lower costs, and extensive marketing. But as GES prepares to report 2Q on 8/27, news that its head of design, who was there little more than a year, willdepart keeps us cautious. GES remains Hold."

Similar tone of caution and challenges from Mizuho.

"GES – N– $26 PT – Expect in-line 2Q results and reiteration of FY14 as management guided late into the quarter and had set a relatively low bar amidst challenging trends in North America"

Short-term challenges remain, according to Wunderlich:

"We are reiterating our projections, price target and Buy rating on GUESS? (GES) with the company announcing 2QFY15 (July) results after the close on Wednesday. While we understand the recent departure of the Chief Designer is a key negative, and will put any material positives from a domestic turn in doubt, we believe the downside risk is already reflected in the stock. We continue to view the shift to less product and more fashion driven offerings as correct for the near and long term. We remain buyers of GES, but concede that the NT domestic turn story is now in doubt."

Piper Jaffray sees turnaround taking longer:

"Ernster's departure marks 2nd high-level merchant departure this summer, in addition to the 3 executive departures between Nov. 2012-Feb. 2013 Viewed Ernster as “fully engaged and involved” in global design process; “somewhat” concerned that there have been 2 high-level departures within last few mos.* Sees Guess Brand turnaround taking longer"

Posted-In: Piper Jaffray Topeka Capital Markets WunderlichEarnings News Previews Trading Ideas

 

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