Citi Lowering Estimates On Guess (GES)

Citi Investment Research is lowering its estimates on Guess GES. It has a Hold rating and a $46 price target on shares. In a note to clients, Citi writes, "We have received a number of questions on GES and thought it would be timely to lay out the business by division, provide updated thoughts and a review of the 10K. While GES is well positioned in Europe and has a strong growth profile in Asia, we see product issues in the U.S. that could require a multi quarter fix. 1Q11 guidance is likely achievable, though full-year guidance assumes an improvement in gross margin trends in the back half and SG&A growth well below the rate of unit growth. We think that's optimistic given a rockier 1Q, cost headwinds in 2H and double digit unit expansion; we don't rule out the possibility of a guide-down. We are lowering our full year estimate to $3.10 versus consensus of $3.43 and guidance of $3.30 to $3.50. The stock will likely trade in-line with retailers with European exposure NT, but estimate revisions appear biased lower and, all else equal, we would be more positive on the stock in the mid-$30s." Shares of GES lost 18 cents yesterday to close at $40.31, a loss of 0.44%.