Guess? (GES) Rises 42.8% in a Year: What's Driving the Stock?
Shares of Guess? Inc. GES have rallied 42.8% over the past year. The company’s focus on strategic initiatives, business strength, solid pricing actions and shareholder-friendly moves appear to have boosted sentiments for the stock.
Based in Los Angeles, Guess? belongs to the Zacks Textile - Apparel industry, which comes under the ambit of the Zacks Consumer Discretionary sector.
The company has a $1.2 billion market capitalization and currently sports a Zacks Rank #1 (Strong Buy).
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Over the past year, the company’s shares have outperformed the industry’s growth of 1.6%. The S&P 500 has risen by 19.2%, while the sector increased by 14.6% during the same period.
Catalysts Behind the Share Price Gain
Guess? has been benefiting from robust demand in retail end markets across Europe and Asia. The company’s Europe segment has been witnessing solid retail store sales, whereas increased consumer activity in Korea has been driving its Asia segment. In the second quarter of fiscal 2024, revenues from the Europe segment increased by 9% and the same for the Asia unit jumped by 19%.
Driven by strength across its businesses, Guess? expects revenue growth in the range of 2.5-4% in fiscal 2024. The company anticipates adjusted earnings of $2.88-$3.08 per share, higher than $2.74 recorded in fiscal 2023.
GES remains focused on improving its customers’ experiences by upgrading its store and e-commerce infrastructure to increase customer conversion. It upgraded its store infrastructure, including implementing mobile point-of-sale check-out, Salesforce Customer 360 and a real-time inventory and sales dashboard.
Guess? has also been improving e-commerce operations by undertaking efforts such as better data capture, improved customer profiling, personalized marketing and relationship management. These efforts are expected to help the company enhance its customer base and enrich its experience, which, in turn, is likely to aid sales.
The company rewards its shareholders through dividend payouts and share buybacks. For instance, in the fiscal second quarter, it repurchased 2.2 million shares, amounting to $42.8 million. In fiscal 2023, it repurchased nearly 9 million shares for $186.7 million. Also, in May 2023, management approved a 33% hike in its quarterly dividend, which increased to 30 cents per share.
GES also remains focused on streamlining its cost structure to boost its operating model and reduce SG&A expenses. The company targets reinvesting these cost savings in enhancing marketing and omnichannel capabilities.
Other Key Picks
Some other top-ranked companies from the same space are GIII Apparel Group GIII, PVH Corp. PVH and lululemon athletica LULU.
GIII Apparel flaunts a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
It delivered a trailing four-quarter earnings surprise of 526.6%, on average. The Zacks Consensus Estimate for GIII’s current fiscal year sales and EPS implies growth of 2.4% and 14.7%, respectively, year over year.
PVH carries a Zacks Rank #2 (Buy) at present. It delivered a trailing four-quarter earnings surprise of 22.8%, on average. The Zacks Consensus Estimate for PVH’s current fiscal year sales and EPS implies growth of 3.7% and 15.2%, respectively, year over year.
lululemon currently carries a Zacks Rank #2 at present. LULU has a trailing four-quarter earnings surprise of 6.8%, on average. The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 18.1% and 20.5%, respectively, from the year-ago corresponding figures.
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Guess?, Inc. (GES) : Free Stock Analysis Report
lululemon athletica inc. (LULU) : Free Stock Analysis Report
PVH Corp. (PVH) : Free Stock Analysis Report
G-III Apparel Group, LTD. (GIII) : Free Stock Analysis Report
