Please ensure Javascript is enabled for purposes of website accessibility

Why Guess Stock Rose 12% at the Open Today

By Reuben Gregg Brewer - Updated Apr 1, 2021 at 11:14AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the retailer jumped after reporting earnings. It's not past the coronavirus yet, but it's doing better. Here's a quick rundown.

What happened

Shares of fashion retailer Guess (GES -0.55%) rose a quick 12% in early trading on Thursday. The news driving those gains actually came on Wednesday, when the company released its fiscal fourth-quarter 2021 earnings results. Investors clearly liked what Guess had to say, even though it wasn't all good news.  

So what

Guess' fiscal fourth-quarter 2021 revenue came in at $648 million. That was roughly in line with analyst expectations but down about 23% year over year. The obvious reason for the top-line decline was the impact of the pandemic.

The company isn't providing firm guidance because of the still-uncertain business environment, but it expects sales to be down in the high single digits in fiscal 2022 versus fiscal 2020 (before the pandemic). In other words, it's still muddling through this rough patch.  

A hand swiping a credit card through a credit card machine.

Image source: Getty Images.

That's not great news, but Guess managed to post adjusted earnings of $1.18 per share in the fourth quarter of fiscal 2021. That handily beat Wall Street's projections of $0.57 per share. This suggests that Guess is managing today's difficult retail environment better than some on Wall Street had been expecting. In fact, an analyst at B. Riley Financial, which has Guess at a buy rating, increased the stock's target price to $29 from $27 on the quarterly update. Investors like earnings beats and positive price-target updates, so it isn't surprising that the stock rose.  

Now what

Guess' stock is around 10% above where it was at the start of 2020, before the coronavirus started to spread around the globe. And yet the company has clearly stated that the impact of the pandemic is not behind it.

It wouldn't be unrealistic for more conservative-minded investors to be concerned about the quick stock rebound here. Even though Guess appears to be doing reasonably well in the face of adversity, it is still dealing with what management believes will remain an ongoing headwind for at least another year.   

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Guess?, Inc. Stock Quote
Guess?, Inc.
$19.94 (-0.55%) $0.11

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.