Guess? (GES) Stock Forecast & Price Target

Guess?, Inc. demonstrated strong financial performance with total sales increasing by 7.2% year-over-year to $791 million, surpassing consensus expectations. Notably, the company's wholesale revenue in the Americas experienced a remarkable 26.5% growth year-over-year, indicating robust demand within this segment. Additionally, Europe contributed significantly to the overall results, with total sales rising 9.7% year-over-year to $404.1 million, further solidifying the company's positive growth trajectory across multiple regions.

The financial analysis indicates a troubling outlook for Guess? Inc, highlighted by a 110 basis point decline in operating margin to 4.7%, despite being slightly better than market consensus. The company's gross margin also contracted by 110 basis points to 42.5%, undershooting the consensus expectation of 42.8%, further exacerbated by a 3% year-over-year decline in retail comparable sales, driven largely by decreased eCommerce performance. Additionally, the company's cash and cash equivalents decreased to $154 million from $190 million in the previous quarter, reflecting potential liquidity concerns alongside pressure from a higher tax rate, which is projected to negatively affect earnings per share.