Guess Stock Slides On Earnings Miss As Wall Street, Retail Sentiment Sours

Guess Inc. ($GES) stock was down more than 5% on Wednesday (12:40 p.m. ET) after the company posted disappointing third-quarter earnings, dampening retail sentiment.

Earnings per share came in at $0.34, below the $0.37 expected by Wall Street analysts. Revenues stood at $738.52 million, missing consensus estimates of $747.36 million, according to Stocktwits data. It posted a 13% jump in revenues to $739 million compared to the same period last year, which was primarily due to the acquisition of rag & bone.

“All of our operating segments posted revenue growth, except for our Licensing segment, which was impacted by the internalization of our outerwear business and delivered flat revenues,” Carlos Alberini, CEO of Guess said in a statement.
Guess issued EPS outlook for the fourth quarter to fall between $1.37 and $1.52. For the full year, its EPS expectation for EPS is between $1.85 and $2.00.

Retail sentiment on the stock worsened to ‘bearish’ (43/100) from ‘extremely bullish’ (82/100) a day ago, while chatter remained ‘extremely high’. 

GES sentiment and message volumes on Nov 27 as of 12:50 pm ET

Telsey Advisory lowered its price target on Guess to $18 from $21 while keeping a ‘Market Perform’ rating. 
The brokerage cited "disappointing sales in Q3, offsetting a slightly better gross margin and expense control," TheFly reported, quoting the analyst. It noted pressures in retail traffic in the Americas and Asia despite the company's marketing efforts.

Meanwhile, UBS also lowered its price target on Guess to $16 from $18 but kept a 'Neutral' rating, citing continuous challenges, particularly across its retail segments. 

"While there is the potential for Guess to deliver on its long-term double-digit operating margin target," UBS echoed Telsey’s concerns around negative comp sales in the Americas and Asia, and forex, TheFly reported. 

The company’s stock is down 31.3% year-to-date. 

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