Guess? (GES) Stock Forecast & Price Target

Guess? Inc has demonstrated robust growth, with total sales increasing by 5.5% year-over-year to $773 million, surpassing both the consensus estimate and internal guidance. Notably, the European segment, which constitutes 57% of second-quarter sales, recorded a remarkable 14% year-over-year growth, indicating strong performance despite previous challenges. Additionally, licensing margins improved significantly, up 210 basis points to an impressive 95.4%, reflecting the company's effective management and operational strength.

The analysis of Guess? Inc.'s recent financial performance reveals a concerning decline in profitability, with the operating margin dropping 150 basis points to 3.7%, which, despite being better than some forecasts, still indicates underlying weakness. The Americas wholesale segment experienced a significant sales decline of 10.9% year-over-year, exacerbated by a gross margin contraction of 120 basis points, further reflecting challenges in maintaining profitability amidst increasing SG&A expenses. Additionally, retail comparable store sales fell 5% year-over-year, with eCommerce contributing to this decline, while adverse impacts from tariffs and a difficult business mix compound the negative financial outlook for the company.