Zacks Investment Research downgraded shares of Guess? Inc (GES) from NEUTRAL to UNDERPERFORM on April 11, 2014, with a target price of $25.00.
We are downgrading our recommendation on Guess? Inc. following disappointing fourth quarter fiscal 2013 results. Fourth-quarter fiscal 2014 sales slipped 6.0% from the prior-year level and missed Zacks Consensus Estimate. Although earnings beat the Zacks Consensus Estimate by 3.8%, it declined 12.6% year over year following soft sales in the quarter.. Operating margins also shrank by a significant 110 basis points due to high markdowns in general merchandise. Bad weather conditions and cold waves resulted in shutdowns of shops in the last two months of the quarter. In spite of giving huge discounts on its products, the company reported lower year over year comps in North American retail and European wholesale business. Overall the stock is prone to currency headwinds. Moreover, the macroeconomic challenges in China are hampering the company's expansion in the emerging market of Asia.
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