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Guess? Extends Store Closures Due to Rising Coronavirus Fears

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The coronavirus outbreak is spreading at an alarming rate. The pandemic has infected more than 600,000 people worldwide and the death toll has crossed 29,000. The retail sector is under major pressure with companies shutting stores, limiting store hours and withdrawing their guidance. In fact, companies are bound to keep stores shut for extended durations as the situation keeps getting worse with each day.

In connection with this, apparel and accessories retailer, Guess?, Inc. GES, recently provided an update related to its store closures. The company stated that it will prolong its temporary store closure plan across the United States and Canada till further notice.

The company had originally closed all its stores across these regions till Mar 27. Moreover, company-operated stores in various countries across Europe were also shuttered in the past. Nevertheless, management stated that customers can continue to make online purchases via the Guess, Marciano, Guess Factory and gbyguess websites.

Well other retailers like Nordstrom, Inc. JWN, Tailored Brands, Inc. TLRD and L Brands, Inc. LB have also taken similar steps to contain the further spread of the deadly coronavirus. Nordstrom noted that it will prolong its temporary store closure plan across the United States and Canada for at least a week until Apr 5. While Tailored Brands will extend the temporary closure of its retail stores until at least May, L Brands stated that its stores in the United States and Canada will remain closed beyond the end of March.



Meanwhile, Guess? has long been witnessing softness in the Americas Retail segment due to macroeconomic factors. During the fourth quarter of fiscal 2020, revenues in the segment declined 4.1% year over year and 4.4% at constant currency (cc). Moreover, retail comp sales, including e-commerce, declined 3% each year over year and at cc due to negative traffic. We believe that persistence of this trend along with recent store closures stemming from the outbreak might affect the region’s performance in the future.

Shares of this Zacks Rank #3 (Hold) company have slumped 61.3% in the past six months compared with the industry’s decline of 30%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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Guess?, Inc. (GES) : Free Stock Analysis Report
 
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