Guess Stock (NYSE: GES) has been performing well so far this year, outperforming the S&P 500 with a 14% increase year-to-date to around $27. This growth can be attributed to an upbeat Q4 earnings report and the recent acquisition of Rag & Bone. Guess, along with WHP Global, agreed to acquire the New York-based fashion brand, with Guess owning all operating assets but sharing 50% of the brand value with WHP Global. This move marks Guess’s first acquisition in its history. In Q4, Guess saw a 9% increase in sales year-over-year to around $891 million, with growth in various segments including American Wholesale, Asia, Europe, Licensing, and Americas Retail. The company also reported a 16% increase in adjusted earnings from the prior year and expects further growth in fiscal 2025.
While GES stock has seen little change over the past few years, moving slightly from $25 in early 2021 to around $26 now, the company’s performance has been lackluster compared to the S&P 500. Returns for GES stock were 5% in 2021, -13% in 2022, and 11% in 2023, underperforming the S&P 500 in 2021 and 2023. In contrast, the Trefis High Quality Portfolio, consisting of 30 stocks, has outperformed the S&P 500 each year over the same period. Given the current uncertain macroeconomic environment, it remains to be seen if Guess will continue to underperform the S&P in the next 12 months or see a strong jump in performance.
Looking ahead, analysts forecast Guess’s revenues to reach $3.1 billion for fiscal year 2025, up 13% year-over-year, with earnings per share expected to come in at $2.86. Based on these forecasts, the company’s valuation has been revised to $32 per share. Despite this, the stock appears cheaply priced at current levels. It is also important to compare Guess with its peers to gain a better understanding of its performance in the market. By assessing metrics that matter, investors can make informed decisions about investing in Guess and other companies in the industry.
Overall, Guess has shown strong growth in sales and earnings, supported by its recent acquisition and positive outlook for fiscal 2025. While the stock has underperformed the S&P 500 in recent years, it remains to be seen if Guess will be able to turn the tide and deliver better returns moving forward. Investors should consider the company’s valuation, its performance compared to peers, and the overall market conditions before making investment decisions. With a focus on growth and profitability, Guess is positioning itself for success in the competitive retail industry.
