Retail Stock Red Hot as Earnings Loom

Guess will report earnings on St. Patty's Day next week

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Retailer Guess?, Inc. (NYSE:GES) recently announced a marketing partnership with social media personality, Jen Selter. The social media star will be featured as the face of the Guess? Spring 2021 activewear advertising campaign in a bid to further expand the company’s brand.

GES has not just endured the pandemic, but thrived. The stock is up 216% year-over-year, with its ascending 40-day moving average containing pullbacks in the new year. Despite the channel of higher highs, a healthy 15.8% of GES' total available float is sold short.  

GES Stock Chart

Guess will step into the earnings confessional next week after the market closes on Wednesday, March 17. The fashion retailer has managed to outperform earnings expectations on three of its four latest earnings reports. For the fourth quarter of 2019, the retailer beat analyst estimates by a margin of $0.10 and reported an earnings per share (EPS) of $1.12. For the second quarter of 2020, Guess beat estimates by a margin of $0.56. In the most recent quarter reported, Guess posted an EPS of $0.58, beating expectations by $0.53.

These encouraging reports have netted post-earnings reactions of 124%, 11.6%, and 10.8%, respectively. This time around, the options market is pricing in a post-earnings move of 14.6%, regardless of direction.

Guess includes a forward dividend of $0.45, equating to a dividend yield of 1.64% and a debt total of $1.28 billion. Their balance sheet also carries $365.26 million in cash. The retail company’s revenues have fallen by roughly $275 million, adding up to $2.4 billion over the past year. Its net income has also decreased by $135 million, which a brings Guess down to $40 million in net losses over the past twelve months.

 

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