Why Guess Is Thursday's Biggest Winner

When Guess? Inc. (NYSE: GES) released its fiscal fourth-quarter earnings report after the markets closed on Wednesday, the retailer said that it had $ 0.62 in earnings per share (EPS) on $792.2 million in revenue. Consensus estimates had called for $0.54 in EPS on $756 million in revenue. The same period of last year reportedly had EPS of $0.43 and $674.0 million in revenue.

During the quarter, Americas Retail revenues decreased 6.1% in U.S. dollars and 7.2% in constant currency. Retail comp sales including e-commerce decreased 4% in U.S. dollars and 5% in constant currency. Wholesale revenues increased 3.8% in U.S. dollars and 0.9% in constant currency.

In terms of its segments, Guess reported as follows:

  • Americas Retail revenues decreased 6% year over year to $271.17 million.
  • Americas Wholesale revenues increased 4% to $36.2 million.
  • Europe revenues increased 40% to $356.8 million.
  • Asia revenues increased 40% to $108.5 million.
  • Licensing revenues increased 11% to $19.5 million.

Looking ahead to the fiscal first quarter, the company expects to see a net loss of $0.27 to $0.24 per share and revenues rising in the range of 11.0% to 12.5%. The consensus estimates call for a net loss of $0.20 per share on $477.65 million in revenue.

On the books, Guess cash and cash equivalents totaled $367.4 million at the end of the quarter, down from $396.1 million in the same period of last year.

Victor Herrero, Guess CEO, commented:

I am pleased to report that the overall results of the fourth quarter finished above the high-end of our expectations, with higher sales, higher adjusted operating profit and higher adjusted earnings per share. This quarter concludes a year where we saw revenue increase, operating profit growth, adjusted operating margin expansion and adjusted EPS growth of 52%. I believe that this year marks the beginning of a turnaround for the Company.

Shares of Guess were last seen up 27% at $19.77 on Thursday. The consensus analyst price target is $16.60, and the 52-week trading range is $9.56 to $19.97.