Piper Jaffray Reiterates Overweight on Guess

Piper Jaffray maintains its Overweight rating on Guess

following a travel through the company's Asia stores. Piper Jaffray notes, "Asia remains the highest sales growth vehicle across all major geographic regions. We view China as the most compelling opportunity within Asia driven by new store growth (from 150 by FY12E to 500 stores over time) and given that Chinese consumers will demand premium products. As the investment cycle begins to wane, we believe this segment carries the greatest potential for operating margin expansion. For FY13, we are projecting a 13% op margin rate for Asia and longer term, we believe a high-teens to low-20% rate is achievable. Every 100 bps incremental of op margin expansion in the Asian segment drives $0.02 EPS." GES closed at $28.84 per share on Friday.