Cost Woes Likely To Hinder Guess?'s (GES) Earnings In Q2
Zacks Investment Research | Aug 21, 2019 09:16PM ET
Guess?, Inc. ( (NYSE:GES) ) is scheduled to release second-quarter fiscal 2020 results on Aug 28. This renowned apparel and accessories company has a mixed record of earnings surprises in the trailing four quarters. Earnings surpassed estimates in the last reported quarter by nearly 3.9%.
Let’s see what’s in store for the company this time around.
Strong European Business & Other Upsides
Expanding operations in Europe have been boosting Guess?’s top line for a while. Business in this region is gaining from constant store openings and e-commerce advancements. The company expects to sustain its impressive performance in the region, which will likely drive revenues in the second quarter.
Moreover, revenues from the Americas region have been improving, backed by strong comparable store sales (comps) and rise in e-commerce operations. Speaking of e-commerce, Guess?’s online business is yielding across most regions and driving comps. The company is on track with digital-first initiative and investing toward brand building through various social media platforms. Further, it focuses on linking brick-and-mortar stores, e-commerce and mobile sales to improve online operations. This is aiding easy merchandise delivery. We expect that growth in the digital realm will aid performance in the quarter to be reported.
Apart from these factors, the company is striving to improve margins through initial markups or IMU improvement and realignment of prices. Further, the company is progressing well with cost-structure improvement. Other key priorities include efficient capital allocation, product development, distribution optimization and customer-centric focus. These efforts are likely to support performance in the to-be-reported quarter.
Guess?, Inc. Price, Consensus and EPS Surprise
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