Piper Jaffray Remains Overweight On Guess Following Earnings Report

On Wednesday evening Guess GES reported FQ4 EPS of $1.11, ahead of Piper Jaffray and consensus ests of $1.06. However, FQ4 benefited from timing shifts and loyalty breakage and FQ1 guidance was significantly below expectations. FY12 EPS guidance of $3.30-3.50 was below Piper's $3.56 estimates.

Piper is lowering the PT from $53 to $48 based on 14x FY12E EPS of $3.45. Piper is maintaining its Overweight rating as int'l and marketing investments will limit EPS growth in FY12, but should drive topline growth and margin expansion in FY13.

FQ4 revenue of $757M beat our est of $732M, however $24M came from early shipment of spring product. Loyalty breakage contributed another $7M which was in line with mgmt's expectations. Looking to FY12, the company plans to invest in infrastructure for Asia and will spend more on demand-creation programs which are likely to limit operating margin expansion.

GES closed Wednesday at $43.87