Mizuho Securities Remains Sidelined as Guess? (GES) Highlights 3yr Plan

Mizuho Securities reiterated a Neutral rating and $17.00 price target on Guess (NYSE: GES) after meeting with management. GUE is making progress towards its plans to add $800mm of sales to $3bn, with 7.5% EBIT margin, by 2019. Management also reiterated the majority of store growth would be concentrated outside of the U.S.. Despite concerns over plans for 400 store openings over 3 years.

Analyst Betty Chen commented, "We hosted meetings in S.F. with GES senior management who emphasized execution towards the 3-yr plan outlined on 3/16/16 to grow sales by $800mm and retrace 7.5% EBIT margin via: 1) restoring sales and productivity from adjustments to in-store presentation & product assortment, 2) supply chain initiatives to reduce lead times and AUC, and 3) Int’l growth. Although reinvigorating the U.S. business may take time, we highlight relative European strength, nascent stages of Asia growth, coupled with the stock’s attractive dividend yield of ~5.8% and valuation of ~4x FY17 EBITDA and a strong B/S."

For an analyst ratings summary and ratings history on Guess click here. For more ratings news on Guess click here.

Shares of Guess closed at $15.41 yesterday.

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