4 Reasons Why You Should Buy Guess (GES) Now

The apparel sector has been reporting declining comps and revenues because more and more buyers prefer to shop online. However, Guess? Inc. (NYSE:GES) is an exception and it is worth keeping it in your portfolio.

Here we highlight four reasons why Guess is a great pick for your portfolio at the moment.

Rank, Estimates and Share Price: Guess carries a Zacks Rank #2 (Buy). The company had had a decent run since the beginning of 2016 with its share price gaining around 22.15%. Over the past 30 days, estimates for fiscal 2017 have moved north by almost 5.3%.

Impressive Second-Quarter Earnings Results, Raised Guidance: Guess reported second-quarter fiscal 2017 results, wherein earnings outpaced the Zacks Consensus Estimate. Adjusted earnings of 14 cents per share beat the Zacks Consensus Estimate of 6 cents by 16.7%. Management’s projected a loss of 4–8 cents.

For fiscal 2017, Guess raised the lower end of its earnings outlook and now expects adjusted earnings per share in the range of 62–75 cents compared with 55–75 cents expected previously. This, however, is substantially lesser than 96 cents per share reported in fiscal 2016. The company expects comps to improve for the second half of the year.

Strong e-Commerce Boosts Top Line: Guess has a strong e-Commerce business. Advertisements and marketing of products on social networking sites like Facebook (NASDAQ:FB) and Twitter have helped to boost sales over the past several quarters. The company has been focusing on linking the brick-and-mortar stores, e-Commerce and mobile sales to improve its e-commerce operations. This has enabled customers to reserve merchandise online and pick them up in stores.

Cost Reduction Measures: Guess has been divesting its underperforming assets to maintain margins. The company’s global cost-reduction plan is well on track and is expected to generate $25 million in annualized operating cost savings by 2018. The initiative includes a plan to reduce non-store payroll through job cuts in all regions.

Zacks Rank and Stocks to Consider

Guess currently carries a Zacks Rank #2 (Buy). Other stocks from the consumer textile apparel sector that warrant a look are Differential Brands Group Inc. (NASDAQ:DFBG) , Ralph Lauren Corp. (NYSE:RL) and PVH Corp. (NYSE:PVH) . All these stocks carry a Zacks Rank #2 (Buy).