Q3 Preview: Analysts Cautious on Guess? (GES) into Numbers as Margins, Europe Weigh

Shares of Guess? (NYSE: GES) are trading higher Wednesday heading into its third-quarter earnings release, set for after the market closes.

Revenue in the quarter is expected to be $654.17 million, while earnings per share will be around 73 cents.

Shares of Guess? fell 13 percent in the quarter and are down about 16 percent since. The stock is down about 40 percent this year. Guess? has traded within a range of $25.99 to $49.90 over the last 52-week period.

Excluding cash, Guess? is trading for 6.3 times next year's earnings expectations, compared with 12.1 times for Aeropostale (NYSE: ARO), and 10.8 times for American Eagle Outfitters (NYSE: AEO).

Data from Bloomberg shows that eight analysts have a Buy ratings on Guess?, six maintain a Hold, and one has a Sell. The analyst price target average is $45.90, with a low of $35 and high of $60.

Analyst Comments

• Brean Murray is modeling for earnings of 64 cents per share. The firm is concerned Guess?'s business model might be showing some weakness in Europe, Canada, and domestic markets. Additionally, aggressive price cutting by competitors forced Guess? to do the same, hampering margins even further.
  
  Despite Brean seeing bad news continuing in the near-term, it maintains a Buy rating and $39 price target on Guess?
  
  
• Wedbush sees earnings of 72 cents per share, though comps are expected to be negative 4 percent. Wedbush believes infrastructure improvements will offset a gross margin increase, expected to be about 60 basis points. Wedbush cautions of near-term volatility and uncertainty in Europe, with management guidance falling in-line with views.

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Campbell's past performance at Streetinsider's Campbell's Income Statement.

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