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Guess? (GES) Looks Solid: Surges More Than 20% in a Year

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·4 min read
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Guess?, Inc. GES looks well positioned, courtesy of focus on its strategic business plan, unveiled in December 2019. The well-known apparel and accessories company has been benefitting from its solid digital business. Such upsides have aided the company’s third-quarter fiscal 2022 results, with the top and the bottom line increasing year over year and surpassing their respective Zacks Consensus Estimates.

The Zacks Consensus Estimate for Guess?’s current financial-year sales suggests growth of 38.6%, while the same for earnings per share indicates an improvement from the year-ago period’s levels. Shares of the Zacks Rank #1 (Strong Buy) company have rallied 21.4% in a year compared with the industry’s growth of 11.9%.

Zacks Investment Research
Zacks Investment Research

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Let’s delve deeper.

Sturdy Digital Wing

Guess? is gaining from growth in the digital business, which continued to perform well in third-quarter fiscal 2022. The company’s e-commerce business in North America and Europe rose 15% year on year and 37% from third-quarter fiscal 2020 levels. Guess? is on track with its customer-centric initiatives, including omnichannel capabilities as well as advanced data analytics and customer segmentation. The company is on track to roll out omnichannel and ship-from-store capabilities in every country across Europe. Guess? is bettering e-commerce operations through efforts like better data capturing, improving customer profiling and personalizing marketing and relationship management. These efforts are expected to help the company enhance its customer base and enrich the experience, which is likely to aid sales.

Startegic Growth Plans

Guess? has been focused on its strategic business plan. To this end, the company is committed to its six key strategies and has made remarkable progress against each of them. The core strategies include organization and culture, functional capacities, brand relevance with three main consumer groups (heritage, Millennials and Generation Z customers), customer focus, product brilliance and international footprint. In relation to its customer-centric initiative, the company implemented the salesforce platform in the United States, Canada and Europe in the past year and was encouraged with the initial results. With respect to its salesforce and omnichannel capacity rollout, Guess? is focused on implementing Customer 360, which is a solution developed by salesforce for personalized marketing, customer data optimization and customers’ journey engagement, among other objectives.

The company is also focusing on brand-elevation strategy, which includes enhancing product quality, visual merchandising and boosting customers’ shopping experience across stores and online. It is rationalizing its store portfolio across retail and wholesale by shutting unproductive stores and accounts while lowering product offerings to develop a single business with more productive SKUs. Further, management is on track to streamline its cost structure to enhance operating model and reduce SG&A expenses. The company expects to reinvest these cost-savings to enhance marketing and omnichannel capabilities.

Wrapping up, the company’s growing online sales and other well-chalked moves are likely to keep Guess? well placed in the times ahead.

Eye These Solid Picks

Delta Apparel DLA, the manufacturer of activewear and lifestyle apparel products, sports a Zacks Rank #1 at present. The stock has surged 24.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Delta Apparel’s current financial-year sales and earnings per share (EPS) suggests growth of 11.6% and 9.4%, respectively, from the year-ago period’s figures. DLA has a trailing four-quarter earnings surprise of 95.5%, on average.

PVH Corp. PVH, a leading apparel company, currently sports a Zacks Rank of 1. PVH has a trailing four-quarter earnings surprise of 72.3%, on average. Shares of PVH have gained 4.1% in the past year.

The Zacks Consensus Estimate for PVH Corp.’s current-year sales and EPS suggests growth of 27.6% and 571.6%, respectively, from the year-ago period’s corresponding readings. PVH has an expected EPS growth rate of 37.5% for three-five years.

Gildan Activewear GIL, manufacturer and seller of apparel products, currently sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of almost 85%, on average. Shares of GIL have gained 47.3% this year.

The Zacks Consensus Estimate for Gildan’s current financial-year sales suggests growth of 43.6%, while the same for EPS indicates an increase from the year-ago period’s levels. GIL has an expected EPS growth rate of 9% for three-five years.


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

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Delta Apparel, Inc. (DLA) : Free Stock Analysis Report

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