QUOTE AND NEWS
SeekingAlpha  Sep 6  Comment 
By Amal Singh: Apparel retailer Guess (NYSE:GES) has disappointed investors by losing 25% of its value this year, and there seems to be no respite going forward. The company reported weak second-quarter results, revealing a significant drop in its...
Forbes  Sep 5  Comment 
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy -- they expect to make money.  So let's look at two noteworthy recent insider buys.
Benzinga  Sep 5  Comment 
Guess?, Inc. (NYSE: GES) shares spiked Friday after a company director reported acquiring 15,000 shares at $23.61 a piece. The director, 67-year-old Joseph R. Gromek was named to the Guess board in April. Gromek paid $354,000 in the stock...
SeekingAlpha  Sep 1  Comment 
By Options Calling: After having reported a 45% decrease in earnings for the second quarter for FY 2015, shares of Guess (NYSE:GES) slumped by almost 8%. Based on these reports, the company also slashed its guidance for the third quarter and the...
SeekingAlpha  Aug 30  Comment 
By The Value Investor: Unlike many other (teen) retailers, shares of Guess (NYSE:GES) did not manage to benefit from a strong momentum in shares for retailers in the month of August. Worse, management anticipates things will not get any better...
Motley Fool  Aug 28  Comment 
Shareholders are left guessing when management will turn things around. Guess? came in below even pessimistic expectations for its second-quarter results. Let's take a closer look at Guess?'s Q2 results.
Forbes  Aug 28  Comment 
In trading on Thursday, apparel stores shares were relative laggards, down on the day by about 1.6%.  Helping drag down the group were shares of Gordmans Stores (GMAN), off about 10.6% and shares of Guess (GES) off about 8.8% on the day.
Benzinga  Aug 28  Comment 
Guess? (NYSE: GES) shares touched a new 52-week low of $23.40 after the company reported weaker-than-expected second-quarter results and issued a downbeat outlook. Sungy Mobile (NASDAQ: GOMO) shares reached a new 52-week low of $8.26 after the...
Benzinga  Aug 28  Comment 
In a report published Thursday, Wunderlich Securities analyst Eric Beder reiterated a Buy rating on Guess (NYSE: GES), but lowered the price target from $31.00 to $27.00. In the report, Wunderlich Securities noted, “We are reducing our price...
TheStreet.com  Aug 28  Comment 
Story updated at 9:50 a.m. to reflect market activity. NEW YORK (TheStreet) --aJefferies lowered its price target for Guess to $25 from $27 Thursday, reiterating its "hold" rating. Shares of Guess fell -8.8% to $23.38 in morning trading. The...




 
TOP CONTRIBUTORS

A pioneer in the designer jeans industry, Guess? (NYSE: GES). makes a variety of fashion-conscious men's and women's clothing. You can find Guess? in over 350 retail stores through out the U.S. and Europe, not to mention popular department stores like Macy's and Bloomingdale's. The company also distributes its clothing through its website.

Guess? was one of the most popular denim brands of the 1980s. The company ran into a few issues, however, during the 1990s: namely pricing pressure from department stores and a trend towards baggier jeans. The latter is decidedly at odds with Guess' more European style. As Guess? struggled to adjust to changing market conditions, competing brands like, Polo Ralph Lauren, Tommy Hilfiger, and Calvin Klein were poised to capitalize on the company's weakness.

In an effort to turn around its flagging fortunes, the company has begun a major push into Europe. The company's presence on the continent continues to grow rapidly; its European revenues which increased by a factor of 9 from 2003 through 2006 [1] and it expects to increase its number of European retail stores by more than 33% by the end of 2007. Guess? is also focusing on improving its margins by shifting its jeanswear business towards retail and concentrating on trendier(read higher-priced) offerings.

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Trends and Forces

Dependency on Department Stores

Department stores in the United States have undergone significant changes in recent years. In response to declining margins, stores have implemented tighter inventory controls and have scaled back the quantities of merchandise that they purchase and/or license from companies like Guess?. As a means of increasing market share, companies have also sought to differentiate themselves from the competition by demanding exclusive contracts and store-specific private labels (e.g. Ralph Lauren's "American Living" line for J.C. Penney). [2] Such dealings could weaken the control Guess? has over its brand's image.

In addition, a series of mergers and acquisitions in the industry (e.g. Federated Department Stores' 2005 takeover of Marshall Field's) give the businesses that remain potentially greater power to negotiate lower prices with Guess?, thereby lowering profit margins. For example by 2002, department stores had forced brands like Guess? to slash their prices, reducing the average price of a pair of jeans by over 50%.[3] However, Guess? may be less vulnerable to such changes as it has increased its retail operations and is now less dependent on wholesale business.

Volatility of Fashion Trends

Trends in the fashion world tend to change very quickly. Consumer tastes can vary widely from one season to the next, leading to large swings in a company's profits. As Guess? seeks to increase earnings by producing cutting-edge styles, it opens itself up to the significant risk that comes with following trends. Guess? has already experienced this firsthand, when its extremely popular jeanswear failed to transition from the skinny denim silhouette of the eighties to the baggy, urban fit of the nineties.

U.S. Economic Conditions

As over two-thirds of Guess? revenue comes from its North American operations, its bottom line is susceptible to shifts in the region's economy, especially in the United States. As rocky economic forecasts tend to damper consumer spending, the company's recent rapid growth could decline. However, as Guess? seeks to expand its growth abroad, the brand's significant international business may serve as a hedge against decreases in domestic consumer spending. With the dollar at record-low levels against the euro, the company's strong European earnings may look even attractive on its U.S. balance sheets for some time to come.

==Competilike Gap base their business on providing wardrobe basics. Brands like Polo Ralph Lauren supply consumers with a fuller range of both wardrobe staples and trendier apparel.

Within the denim business, Guess? faces fierce competition from very popular brands like Seven For All Mankind, True Religion, and Diesel. Guess? is increasingly following the industry trend towards higher-end jeanswear as it increases both the quality and the price of its denim.

Guess? vs. Competitors(2006)[4]
Guess? Gap Polo Ralph Lauren Levi Strauss & Co. [5]
Revenue (ttm) $1.47B $16.03B $4.54B $4.19B
Net income (ttm) $157.71M $759.00M $387.30M $239.00B
Quarterly revenue growth (yoy) 48.20% -0.10% 11.30% -
Gross margin (ttm) 44.82% 35.33% 54.12% 47.00%
Operating margin (ttm) 16.78% 7.57% 14.22% 15.00%
Change in same-store sales [6] 16.2%[7] 0%[8] 7.9% [9] -


  1. Guess? 2005 10K (released March 13, 2006) p. 7 and Guess? 2006 10K (released March 1, 2007) p. 7
  2. "Top fashion designers go down-market", USA Today (published September 25, 2007)
  3. How Guess Got Its Groove Back, BusinessWeek' (December 18, 2006)
  4. Unless otherwise noted, these figures were taken from Yahoo! Finance.
  5. Data from the company's 2006 10-K(released February 13, 2007)
  6. Figures compare Q2 2007 sales to Q2 2006 sales.
  7. Guess? press release: "GUESS?, INC. REPORTS RECORD SECOND QUARTER 2008 REVENUES", (released September 4, 2007)
  8. Gap press release: "GAP INC. REPORTS SECOND QUARTER EARNINGS PER SHARE OF $0.19", (released August 23, 2007)
  9. Polo Ralph Lauren Wikinvest article



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