Guess Shares Higher After Earnings Beat

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by Michael Dabai

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Shares of Guess Inc. rose 13% to $23.97 in afternoon trading on Wednesday after higher-than-expected quarterly results.

The maker of apparel, handbags, watches and other consumer products reported third-quarter revenue growth of $569.3 million to $643.1 million after the bell on Tuesday, beating the FactSet consensus forecast of $611.3 million. Adjusted earnings per share for the three months ended October 30 were 62 cents, higher than the FactSet consensus of 46 cents.

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The company also doubled its quarterly cash dividend to 22.5 cents per share.

“I firmly believe that our company is better positioned than ever to expand our distribution, gain market share and increase profitability. We have a strong balance sheet and solid cash generation to support the growth of our business. power, and return excess cash to our shareholders,” said Chief Executive Carlos Alberini during the company’s conference call.

NS. Riley Securities reiterated its buy recommendation and $38 price target on the stock.

“Management believes they have navigated strongly through the pandemic to transform the business into a more profitable company that is gaining share in key markets,” B Riley said in a research report. With each section seeing gradual improvement, B. Riley said he believes the Guess can continue its strong momentum next year.

B Riley said, “We remain buyers of GES as we believe the valuations are attractive and share in the benefits of the brand and the rest of the world as the world reopens in a post-Covid environment.”

Write to Michael Dabai at [email protected]

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