Guess? (GES) will likely post a modest Q3 earnings beat driven by strong European performance, but challenges in the Americas and foreign exchange headwinds will likely push fiscal 2025 guidance towards the lower end, UBS Securities said in an earnings preview emailed Tuesday.
Investor sentiment about the company remains bearish with high short interest and trading at a low valuation of roughly 6x price-to-earnings, and will remain muted in the near terms because of weak US retail trends, the firm added.
UBS said that the company's European sales are showing resilience, supported by strong apparel demand. However, US store traffic continues to decline, with high single-digit year-over-year drops and overall industry weakness.
The firm reduced its price target on the company's stock to $18 from $22 with a neutral rating.
Price: 16.53, Change: +0.09, Percent Change: +0.55
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