Strong licensing business offsets weakness in direct-to-consumer segment and weak traffic in the Americas

  • Guess’s stock slides 8% after earnings fall short and company lowers guidance
  • Strong licensing business offsets weakness in direct-to-consumer segment
  • Weak traffic in the Americas contributes to decline in revenue
  • Adjusted per-share earnings below consensus
  • Full-year adjusted EPS and revenue guidance lowered
  • Plan to launch new Guess jeans offering targeting male customers in 2024
  • European business promoted by Spanish-Argentine influencer
  • Chinese consulting firm engaged to promote brand in China
  • Jefferies analysts maintain buy rating but lower price target

Guess Inc.’s stock tumbled 8% after the company reported worse-than-expected third-quarter earnings and reduced its guidance. The company’s strong licensing business helped to offset weakness in its direct-to-consumer segment and drove flat earnings from operations. However, slow customer traffic in the Americas contributed to a decline in revenue. Adjusted per-share earnings fell below consensus, leading to a decrease in the full-year adjusted EPS and revenue guidance. In an effort to reclaim the company’s denim legacy, Guess announced plans to launch a new Guess jeans offering in 2024, targeting male customers and focusing on sustainable manufacturing. The brand will be promoted globally through various channels, including wholesale markets, direct-to-consumer channels, and the company’s own stores and website. Additionally, the company is partnering with influencers and consulting firms to promote its European business and expand its presence in China. Despite the decline in stock price, Jefferies analysts maintain a buy rating on Guess’s stock, citing potential for margin expansion and continued revenue growth.

Factuality Level: 7
Factuality Justification: The article provides information about Guess Inc.’s third-quarter earnings and guidance, including the company’s net income, adjusted per-share earnings, and revenue. It also mentions the performance of different regions and product categories. The article includes quotes from the company’s CEO and analysts. However, the article lacks in-depth analysis and context, and it does not provide a comprehensive overview of the company’s financial situation.
Noise Level: 3
Noise Justification: The article provides information on Guess Inc.’s stock performance, earnings, and guidance. It includes quotes from the CEO and analysts. However, there is some repetitive information and the article does not provide a thoughtful analysis or actionable insights.
Financial Relevance: Yes
Financial Markets Impacted: Guess Inc.’s stock
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to the financial performance of Guess Inc., with the company’s stock declining after posting worse-than-expected earnings and cutting its guidance. There is no mention of any extreme event.
Public Companies: Guess Inc. (GES)
Key People: Carlos Alberini (Chief Executive), Georgina Rodríguez (Influencer), Corey Tarlowe (Analyst)

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