Guess? Inc. (NYSE: GES) designs,
markets, distributes and licenses a trendy, upscale collection of contemporary apparel, accessories and related consumer products. The company operates 373 retail stores in the United States and Canada and also distributes its products through department and specialty stores around the world. Competitors include Gap Inc. (NYSE: GPS) and Abercrombie & Fitch (NYSE: ANF).
Guess? surprised investors last week, when it reported Q4 EPS of 59 cents and revenues of $514.6 million. Both totals were company records. Analysts had been looking for 57 cents and $470 million. Management also issued Q1 and FY09 estimates that were essentially in-line with Street views and the Board approved a $200 million share repurchase program. Wedbush Morgan subsequently reiterated its "buy" recommendation on the stock.
The shares
popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the issue with five "strong buys" and three "buys". Analysts expect a 24% average annual growth rate, through the next five years. The GES Sales Growth rate (29.88%), EPS Growth rate (18.00%), Return on Assets (18.52%), Return on Investment (27.96%) and Return on Equity (34.28%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 66% of the outstanding shares. Over the past fifty-two weeks, the stock has traded between $30.00 and $57.20. A stop-loss of $34.35 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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