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Guess?, Inc. GES appears to be well placed on the back of its strategic growth endeavors. Notably, this Zacks Rank #1 (Strong Buy) stock has surged 63.9% in the past three months compared with the industry’s growth of 18.2%. Moreover, the stock has outperformed the Zacks Consumer Discretionary sector’s increase of 16.6% during the same period. Let’s discuss the factors, which are likely to continue aiding the company’s growth.
Factors Narrating Guess?’s Growth Story
Guess? is on track to enhance operating margin through cost-saving efforts and operational efficiencies. Moreover, it is focusing on customer-centric initiatives that include global e-commerce strategy, salesforce implementation and omnichannel experience redesign projects. In its last earnings call, management stated that it has completed the implementation of the salesforce platform in the United States, Canada and Europe except Russia. It plans to implement the platform in Russia during February 2021. Guess? is impressed with the performance of the platform that enables better customer experience and improved conversion as well as engagement. Also, it expects to see solid online growth via these platforms.
Guess? is progressing well with its customer 360 project to enhance personalization, customer data integration, journey engagement as well as results analysis. In fact, management expects to conclude the full implementation of the Customer 360 project by the end of 2021.
Apart from these, Guess? is benefitting from its solid digital efforts. Notably, the company’s e-commerce business in North America and Europe increased 19% in the third quarter of fiscal 2021. Prior to this, Guess?’s e-commerce business in these regions rose 9% in fiscal second quarter. Moreover, management is optimistic about its online growth in fiscal fourth quarter.
Well, Guess? is on track with its digital-first initiative and investing in brand building through social media platforms. Further, the company is focused on integrating brick-and-mortar stores, e-commerce and mobile sales to improve online operations. These efforts are helping customers reserve merchandise online and pick them up in stores. In order to augment its e-commerce operations, the company is also resorting to data capturing, customer profiling and personalized marketing. Also, it is undertaking robust efforts to enhance its brand.
All said, we believe that strength in its digital business along with other growth efforts is likely to help Guess? sustain its momentum going forward.
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Deckers Outdoor Corporation DECK,which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 18.6%.You can see the complete list of today’s Zacks #1 Rank stocks here.
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