Guess? To Feel The Pinch Of Currency Headwinds, Says Analyst

Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Guess? Inc GES with a price target of $23.00.
The analyst said the company’s Q2 earnings downside was primarily driven by a higher tax rate that negatively impacted EPS.
The downbeat guidance issued by GES was driven by currency headwinds and a more difficult prior-year COVID-relief-driven comparison.
With currencies having an increasingly unfavorable impact on both sales and operating income, the updated outlook now assumes a roughly 800 basis point sales headwind and a $55 million impact on operating profit, the analyst noted.
The analyst also mentioned that the macro challenges and uncertainties persist with no real visibility of an improved operating environment.
Telsey added that both the quarterly and annual outlooks disappointed relative to prior expectations, primarily reflecting increased FX pressure in the back half of the year.
Price Action: GES shares are trading lower by 3.59% at $18.55 on the last check Thursday.