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Guess? (GES) Gears Up for Q1 Earnings: What Should You Know?

Guess?, Inc. GES is likely to register a top-and-bottom-line decline when it reports first-quarter fiscal 2024 earnings on May 24. The Zacks Consensus Estimate for revenues is pegged at $555 million, suggesting a decrease of 6.4% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for the bottom line has remained unchanged in the past 30 days at a loss of 28 cents per share. The projection indicates a significant deterioration from earnings of 24 cents reported in the year-ago period quarter. Guess? has a trailing four-quarter negative earnings surprise of 2.1%, on average.

Guess?, Inc. Price, Consensus and EPS Surprise

Guess?, Inc. price-consensus-eps-surprise-chart | Guess?, Inc. Quote

Factors to Consider

Guess? has been bearing the brunt of global cost headwinds and foreign currency volatility. On its fourth-quarter fiscal 2023 earnings call, management stated that though inflationary pressure has been easing, it expects increased interest rates to affect consumer spending. In addition, uncertainty surrounding the Ukraine war poses threats to the global economy. Guess? continues to see labor and store occupancy cost inflation, per its fourth-quarter earnings call.

Guess? expects consumers to remain prudent regarding their spending during fiscal 2024. These factors raise concerns for the quarter under review. For the first quarter of fiscal 2024, management expects revenues to have decreased 7-6%. On an adjusted basis, the company expects a loss in the band of 31-25 cents per share. On a GAAP basis, it expects a loss in the band of 25-19 cents per share for the first quarter of fiscal 2024.

That being said, strength in the Europe business and a focus on six strategic initiatives bode well. The core strategies include organization and culture, functional capacities, brand relevance with three main consumer groups (heritage, Millennials and Generation Z customers), customer focus, product brilliance and international footprint. Moreover, GES has been benefiting from its solid digital business.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Guess? this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Guess? has an Earnings ESP of +9.09% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are three other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat:

Costco Wholesale COST currently has an Earnings ESP of +0.04% and a Zacks Rank #3. The company’s bottom line is expected to increase year over year when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly EPS is pegged at $3.32, suggesting 4.7% growth from the year-ago period figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Costco’s quarterly revenues is pegged at $54.6 billion, which implies a rise of 3.8% from the figure reported in the prior-year quarter. COST has a trailing four-quarter earnings surprise of 2.4%, on average.

Deckers Outdoor Corporation DECK currently has an Earnings ESP of +10.63% and a Zacks Rank of 3. DECK is likely to register a top-line decline when it reports fourth-quarter fiscal 2023 results. The Zacks Consensus Estimate for revenues is pegged at $703.6 million, suggesting a dip of 4.4% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for Deckers’ quarterly earnings has increased from $2.57 per share to $2.60 in the past 30 days. The consensus estimate indicates growth of 3.6% from the figure reported in the prior-year quarter. DECK has a trailing four-quarter earnings surprise of nearly 31%, on average.

lululemon athletica LULU currently has an Earnings ESP of +0.24% and a Zacks Rank of 3. LULU is expected to register a top-line and bottom-line improvement when it reports first-quarter fiscal 2023 numbers.

The Zacks Consensus Estimate for lululemon’s quarterly revenues is pegged at $1.9 billion, calling for growth of 19.3% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the quarterly EPS of $1.97 suggests growth of 33.1% from the figure reported in the year-ago fiscal quarter. LULU has a trailing four-quarter earnings surprise of 6.8%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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