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Guess Surges after B. Riley Upgrades GES Stock

Sonya Bells - Author

Mar. 2 2018, Updated 9:46 a.m. ET

Here’s what triggered the surge of Guess’s stock price yesterday

Guess (GES) surged 5.6% on February 26, 2018, after the company was upgraded by B. Riley from a “neutral” to a “buy” rating. Analysts Susan Anderson and Luke Hatton said that they like the company’s cheap valuation and believe that there is enough earnings upside for the apparel retailer going forward.

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B. Riley’s applauds Guess CEO’s strategies

Anderson and Hatton also applauded the strategies of Guess CEO (chief executive officer) Victor Herrero, who was hired by the company in 2015. Herrero has focused on offering a complete range of outfits while moving beyond denim. He has also worked on improving the store experience and improving the connection with consumers through celebrity endorsements.

The two analysts said that Guess’s latest endorsers, Camila Cabello and Jennifer Lopez, received a good response from the customers (according to the Google Trends data).

They now expect double-digit growth in the company’s overseas business and are anticipating an improvement in profitability, mainly driven by recent store closures and better cost controls.

What else drove the stock price?

Guess entered into a 15-year worldwide agreement with Inter Parfums (IPAR), wherein the latter has agreed to create, develop, and distribute fragrances under the Guess brand, starting April 1.

CEO Victor Herrero said the following in a press release: “As a lifestyle brand, Guess Fragrance is and continues to be a key category for us. In partnership with Inter Parfums, we intend to provide a well-rounded experience that evokes the Guess sense of adventure with a young and free spirit through scent.”

Notably, investors looking to invest in Guess through ETFs can choose to invest in SPDR S&P Retail ETF (XRT). GES has a weight of approximately 1% in XRT.


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