Advertisement
Singapore markets closed

  • Straits Times Index

    3,280.10
    -7.65 (-0.23%)
     

  • Nikkei

    37,934.76
    +306.28 (+0.81%)
     

  • Hang Seng

    17,651.15
    +366.61 (+2.12%)
     

  • FTSE 100

    8,139.83
    +60.97 (+0.75%)
     

  • Bitcoin USD

    63,617.85
    -829.52 (-1.29%)
     

  • CMC Crypto 200

    1,325.86
    -70.67 (-5.06%)
     

  • S&P 500

    5,107.98
    +59.56 (+1.18%)
     

  • Dow

    38,295.49
    +209.69 (+0.55%)
     

  • Nasdaq

    15,948.29
    +336.54 (+2.16%)
     

  • Gold

    2,346.40
    +3.90 (+0.17%)
     

  • Crude Oil

    83.94
    +0.37 (+0.44%)
     

  • 10-Yr Bond

    4.6670
    -0.0390 (-0.83%)
     

  • FTSE Bursa Malaysia

    1,575.16
    +5.91 (+0.38%)
     

  • Jakarta Composite Index

    7,036.08
    -119.22 (-1.67%)
     

  • PSE Index

    6,628.75
    +53.87 (+0.82%)
     

Guess? (GES) Issues Fiscal 2025 Guidance With Strategic Plan

Zacks Equity Research

Guess, Inc. GES has been gaining from sturdy growth in Europe business for a while. Also, the company’s focus on its digital-first initiative, efficient capital allocation, cost-containment efforts and focus on product development are driving its performance. On the back of these upsides, this Zacks Rank #3 (Hold) stock has increased 16.2% in the past six months against the industry’s decline of 6.1%.



Guess? is undertaking initiatives to grow its business. Evidently, the company unveiled a five-year strategic plan that includes global expansion, profit growth and value creation for its shareholders.

To this end, Guess? plans to keep its brand relevant by focusing on strategic collaborations to enhance customer engagement. Further, the company intends to be customer centric and provide differentiated products to its buyers.  Moreover, management is committed to search for efficiencies in its global model to optimize operations and penetrate into untapped markets worldwide.

Guidance Reveal Bright Prospects

Strength in the Europe and Americas Wholesale segments as well as solid cost-control measures encouraged the company to raise earnings view for fiscal 2020 during its third-quarter fiscal 2020 earnings call. This guidance along with management’s sales and operating margin projections were reiterated when the company revealed its five-year strategic plan on Dec 3, 2019.

Additionally, the company stated that it expects gross margin to increase 160 basis points (bps) year over year in fiscal 2020. Free cash flow is forecast in the range of $57-$62 million compared with negative $28 million reported in fiscal 2019.

Further, the company provided a fresh outlook for the fiscal 2021 to fiscal 2025 period. Sales are expected to rise by low single-digits CAGR, whereas earnings are likely to increase high-teens digit on a CAGR basis. Guess? expects operating profit to increase by a mid-teens number on a CAGR basis and operating margin to rise 90 bps annually on an average during the same time period. Moreover, management envisions gross margin to increase 80 bps annually on an average.

Free cash flow is forecast to be up by low-twenties on a CAGR basis from fiscal 2021 through fiscal 2025.

Apart from this, net revenues in all the segments are likely to increase by low single digits in fiscal 2025 compared with fiscal 2020 figures.

We believe that the company’s newly-unveiled strategic plan will likely strengthen its position and help it stay in investors’ good books.

Key Picks

Deckers Outdoor Corporation DECK has a long-term earnings growth of 12.2% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Crocs, Inc CROX delivered average positive earnings surprise of 38.04% in the trailing four quarters. It currently sports a Zacks Rank #1.

Tailored Brands, Inc TLRD delivered average positive earnings surprise of 16.23% in the trailing four quarters. It currently carries a Zacks Rank #2 (Buy).

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
 
Guess?, Inc. (GES) : Free Stock Analysis Report
 
Crocs, Inc. (CROX) : Free Stock Analysis Report
 
Tailored Brands, Inc. (TLRD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.