Guess?: Own It For The 5.7% Yield Or Not At All

Guess? (NYSE: GES) has had a rough go of it for the past several quarters now. The company is trying to reinvent itself to stave off a growing set of micro and macro headwinds but so far, it just continues to struggle. In April I said the stock's 5% yield would keep it afloat while the turnaround effort was implemented and while the stock is down marginally since then, it has mostly held true. If it's true that the yield will buy GES some time, it changes the landscape of the stock for the rest of this year and that's a good thing. The reason is because the company continues to have to revise previous guidance due to poor results and did so in FQ1 once again. But investors are surely beginning to lose patience so what does GES look like for the rest of the year with the poor Q1 built in?

GES' chart is ugly but the company has earned it every sense of the word. We continue to see razor-thin or negative operating margins and sales numbers that cannot get out of their own way. GES is not alone among an apparel retailer landscape littered with stories just like this but in times of softness, the weaker players produce results like what we've seen from GES and if you own it, the fact that others are feeling your pain is surely of little consolation.
Q1 unfortunately made things worse as GES reported an even weaker quarter than it expected. Revenue fell 6% as every single segment posted a decline. That's not good and while Europe showed some relative... Read more

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