What To Expect From Guess’ Stock Following Results?

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Looks like stock (NYSE: GES), a retailer that designs, markets, distributes and licenses apparel and accessories for men, women and children, is scheduled to report its fiscal first-quarter results on Wednesday, May 25. We expect GES stock to likely trade higher with post fiscal Q1 results coming in line with revenue and earnings marginally beating estimates. In fiscal year 2022 (year ended January 22), the retailer’s margins benefited from consumer retail activity and cost-cutting initiatives and increased to 12% from pre-pandemic levels of 5%. As a result, the company’s earnings per share also doubled from pre-pandemic levels in FY22. However, due to some permanent store closures, the company’s revenue declined 3% during this period. Going forward, we expect the upcoming Q1 to be driven by the rapid growth of Guess
Profitable wholesale business and increased digital sales. But rising inflationary pressures and supply chain constraints will also have a meaningful impact on the company’s top and bottom levels. It should be noted that the company’s stock has been trading lower lately due to concerns over rising cotton prices and higher overall manufacturing costs in Asian countries such as Vietnam and China.

Our forecast suggests the company’s valuation is $20 per share, which is approximately 4% higher than its current market price. View our interactive dashboard analysis make a guess’ Earnings Preview: What to expect in fiscal Q1? for more information.

(1) Revenue likely to come in line

Trefis estimates GES’s FQ1 revenue to be approximately $586 million, which is in line with market expectations of $584 million. In Q4, the company’s revenue grew 23% year-over-year (yoy) to $800 million and was down 5% compared to pre-pandemic levels. These results were driven by European wholesale, US retail and licensing businesses across the board. Looking ahead, first-quarter revenue is expected to grow in the low-teens, driven primarily by last year’s temporary store closures, wholesale growth and positive store comps. Q1 2023 will also benefit from the transfer of European bulk shipments from the fourth quarter of 2022 to the first quarter. For the full year 2023, the company expects revenue and operating margin to reach roughly 10.5% in the low single digits annually. we predict Estimate ‘Revenue’ would grow 3% annually to $2.7 billion. The outlook for the first quarter and year shows significant disruptions in Russia.

(2) EPS likely to be slightly above consensus estimates

GES’s FQ1 2023 earnings per share is expected to be 30 cents per Trefis analysis, slightly ahead of the consensus estimate of 29 cents. In Q4, the retailer’s operating margin increased 460 basis points to 15.7%. The increase was linked to the overall benefit of expenses, lower markdowns and higher initial markups, partially offset by the prior year’s rent relief and government subsidies. However, the company earned $1.04 per share in Q4 2022, down from $1.08 in fiscal 2021 and $1.18 in fiscal 2020 — driven by the unfavorable impact of negative comp sales in Europe.

(3) Estimated stock price is higher than the current market price

By our estimate, with earnings per share of approximately $3.06 in fiscal 2021 and a P/E multiplier of approximately 6.6x, this translates to a price of $20, which is approximately 4% higher than the current market price.

It’s helpful to see how its mates stack up. it seems comrades Shows how Guess compares against its peers on the metrics. You’ll find other useful comparisons for companies across industries here. peer comparison,

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