Retail apparel store operator Guess? (NYSE: GES) shares were hammered by investors in the extended hours of trading on Wednesday resulting in decline of over 12 percent due to weak outlook for the first quarter. Let's take a look at how its rivals have performed during the just concluded quarter and what their outlook is?
Guess is looking to earn 25 – 28 cents a share for the first quarter on revenues of $560 - $575 million. This guidance is significantly lower than analysts' earnings estimation of 48 cents a share on $609.7 million revenues.
For fiscal year 2013 too, the company's projection for earnings of $2.50 - $2.65 a share and revenues of $2.74 - $2.78 billion fell short of Street analysts' prediction for earnings of $3.18 a share on $2.83 billion revenues.
For the fourth quarter, the company earned 7 percent lower net income at $95.9 million versus $103.3 million and earnings dipped 5.4 percent to $1.05 a share from $1.11 a share in the year-ago quarter. Revenues grew 2.5 percent to $775.84 million from $756.92 million in the previous year quarter. While earnings met analysts' predictions, revenue fell shy of estimations.
Guess' rival Abercrombie & Fitch (NYSE: ANF) is looking to earn $3.50 $3.75 a share for fiscal 2013. Currently, analysts' surveyed by Thomson Reuters expect the company to report $3.50 a share. Before the company announced its outlook, analysts' were estimating $3.48 a share.
The company reported adjusted earnings of $1.12 a share, down 19 percent from $1.38 a share in the year earlier quarter. On a GAAP basis, it earned $19.5 million or 22 cents a share, significantly lower than $92.50 million or $1.03 a share in the previous year quarter. However, net sales increased 16 percent to $1.33 billion. Both earnings and revenues were in line with expectations.
Rival Ralph Lauren (NYSE: RL) disclosed earlier that it is expecting consolidated revenues to grow around 20 percent for fiscal 2012, compared to its earlier estimation of high-tees-to-low twenty percent growth. Analysts' are estimating revenue upside of 20.7 percent.
The company reported net income of $169 million for the third quarter, up from $168.4 million and earnings rose to $1.78 a share from $1.72 a share in the prior year quarter. Net revenues were $1.81 billion, 17 percent higher than $1.55 billion generated in the prior year quarter. The company's earnings as well as revenues came in above Street analysts' expectations of $1.67 a share on revenues of $1.75 billion.
Looking at the outlook and performance, Guess appears to be missing the bus. All the companies' were unfavorably impacted by margin compression. This could be seen from the difference between revenue growth and earnings.
Let's also look at the closing price of these three stocks along with 52-week high and low.
Share price as on 14.3.2012
% of Diff. Vs. 52-week high
% of Diff. Vs. 52-week Low
The above data presents a different picture. All the three stocks are trading significantly higher from its 52-week low and S&P 500's low in terms of percentage. But, looking from the yearly high, Guess price difference is close to minus 20 percent compared to S&P 500's minus 0.37 percent difference only. Ralph Lauren stock difference is also minus 2.16 percent.
One thing seems to be clear. Guess' near term will see pressures. The company will certainly need to do well to regain investors' confidence. It does not mean that the stock needs to be dumped, though, it is not advisable to enter a new position at this time.