Earnings Preview: Guess? Inc. - Analyst Blog
November 29 2011 - 4:45AM
Zacks
Guess? Inc. (GES), one of the world’s leading
designer and distributor of lifestyle apparels, is scheduled to
report its third quarter 2012 financial results before the opening
bells on November 30, 2011.
The current Zacks Consensus Estimate for the quarter’s earnings
is pegged at 74 cents a share. The Zacks Consensus Estimate
projects revenues for the quarter to come in at $658 million.
Second Quarter 2012 Recap
Guess? Inc., which faces stiff competition from
Abercrombie & Fitch Co.(ANF) and Gap
Inc. (GAP), posted second quarter 2012 adjusted earnings
per share (EPS) of 84 cents, which surpassed the Zacks estimate by
3 cents. It also exceeded the year-ago earnings of 72 cents by
16.7%.
Revenues in the quarter soared 17.3% year over year to $677.2
million. In constant dollar terms, net revenue went up 9.5% from
the previous year.
Operating income grew 17.3% to $113.0 million, reflecting
favorable currency, volume/mix gains and lower overheads.
Operating Income margin remained flat with the prior year
quarter at 16.7%. Product margin climbed up owing to higher
relative occupancy, distribution and selling expenses.
Read The Whole Story at Guess? Beats; Profits Overseas
Management Guidance
Based on the results posted in the second quarter, the company
estimated the third quarter diluted earnings to be in the range of
71 cents to 74 cents. For fiscal 2012, the company expects earnings
in the range of $3.25 to $3.35 and GAAP diluted earnings per share
between $3.06 and $3.16.
Third-Quarter 2012 Zacks Consensus
Earnings estimates for the third quarter of 2012, as provided by
the analysts, range from a low of 70 cents to a high of 77 cents.
Thus, the current Zacks Consensus Estimate for the quarter is
pegged at 74 cents per share, reflecting a year-over-year decline
of one penny.
Over the past 30 days, none of the analysts have revised the
earnings estimate. Hence, the Zacks Consensus Estimate did not
change. However, the estimate increased by 1 penny over the last 90
days.
Earnings History: Ahead of Zacks
With respect to earnings surprises, Guess? topped the Zacks
Consensus Estimate in all the preceding four quarters. Over the
last four quarters, the earnings surprise ranged from 3.70% to
27.12%, with the average earnings surprise being 15.14%, suggesting
that Guess? has always outperformed the Zacks Consensus Estimate
over that period.
Recommendation
The company’s in-house team of dedicated designers and product
specialists enable the company to stay ahead in the face of
changing lifestyle and fashion trends by bringing innovative and
unique products to its customers. However, stiff competition from
numerous manufacturers, importers and distributors; having
significantly greater financial, distribution, advertising and
marketing resources concerns us.
Currently, we prefer to rate the stock as Neutral. However,
Guess? holds the Zacks #4 Rank, which translates into a short-term
'Sel'l rating.
ABERCROMBIE (ANF): Free Stock Analysis Report
GUESS INC (GES): Free Stock Analysis Report
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