- Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the stock of Guess?, Inc. GES with a price target of $23.
- Guess? will report first-quarter earnings on Wednesday, May 24, after the market close.
- Guess?'s 1Q23 will face a "tough" prior-year comparison that gained from COVID subsidies and favorable timing of shipments.
- Additionally, the analyst cautions that the company's overall outlook reflects a cautious consumer spending environment in the U.S. and uncertainties in Europe.
- Tighter inventories at retail could pressure the wholesale channel in the quarter to be reported, added the analyst.
- Guess? will also bear the brunt of the ongoing impact of macro and inflationary headwinds, evident in the company's cautious view of the year ahead.
- Overall, Dana sees "no real visibility" of an improved operating environment for Guess?.
- The analyst expects the company's sales to decline 6.5% Y/Y to $555 million, with 400 bps of gross margin contraction to 37.6%.
- Dana also forecasts 800 bps of operating margin contraction to 1.1% loss.
- However, the analyst sees the appointment of Markus Neubrand as CFO, effective August 1, as a positive as this will remove a layer of uncertainty within the senior management team going forward.
- Also Read: Guess? Inks Exchange & Subscription Agreements To Extend Maturity Of Significant Portion Of Debt To 2028
- Price Action: GES shares are trading lower by 2.85% at $17.53 on the last check Monday.
- Photo via Wikimedia Commons
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