Q4 Preview: Strong Holiday Sales, Pricing Should Keep Guess? (GES) 'Wrinkle Free'

Guess?, Inc. (NYSE: GES) shares are showing some weakness heading into its fourth-quarter 2012 report Wednesday, expected out after the market closes.

The Street sees a slight drop in Guess? earnings from $1.06 in the same period last year to $1.02. Revenue in the quarter should grow about 2.9 percent to $778.8 million.

Shares of Guess? moved 8.4 percent lower to $30.00 at the end of January. The stock is up 22 percent since then and 22.7 percent for 2012. Guess? shares have traded within a range of $25.66 to $45.73 over the last 52-week time frame.

Traders might be taking a hint from Urban Outfitters (Nasdaq: URBN) heading into Guess? numbers. After the market closed Tuesday, Urban reported Q4 EPS of $0.27, $0.02 worse than the analyst estimate of $0.29. Revenue for the quarter came in at $730.6 million versus the consensus estimate of $741.35 million. Comparable retail segment net sales, which include the Direct-to-Consumer channels, increased 2 percent for the quarter, while comparable store net sales decreased 1 percent for the quarter.

Data from Bloomberg has six analysts at Buy on Guess?, seven with a Hold, and one at Sell. The Street's price target average is $40.50, with a range of $31 to $55.

Analyst Comments

• Wedbush sees EPS of $1.05 on revs of $789.9 million. North American comps should be negative 3 percent with operating margin dipping 100 basis points to 11 percent and a 60 basis point contraction in gross margins.
  
  The firm commented, "we note more encouraging Spring reads from our Retail Specialists as well as cleaner inventory levels in NA, the focus on elevating the customer experience and protecting margins by pulling back promotions in NA suggests comps may remain negative until Q2:F12...we note additional expenses from ongoing investments in the lower-margin Asian segment to expand the South Korean and Chinese markets."
  
  
• Brean Murray Carret & Co. sees earnings of $1.06 per share. Amid the EPS estimate, Brean still sees its number as conservative on stronger domestic sales coupled with robust margins. For Holiday 2011, the firm sees Guess? as being a winner with lower inventory levels and firm pricing.
  
  The firm sees the Street missing about 4 cents to 6 cents per share of EPS impact from last quarter when Guess? decided to sever its relationship with a material number of European jewelry sellers. Brean would be a buyer on any weakness following first-quarter guidance. Brean said the first quarter should see the worst comps in terms of foreign exchange and costing issues.

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 Guess?'s past performance at Streetinsider's Guess?'s Income Statement.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• AGNC Investment Corp (AGNC) PT Lowered to $10.25 at Jones Trading
• FirstEnergy Corp. (FE) PT Raised to $35 at BofA Securities
• Zillow Group (ZG) PT Lowered to $53 at BofA Securities