Is the Guess? (NYSE:GES) icon a thing of the past? Well, based on healthy numbers for May, it seems that the company's shortfall in comps back in April may have been just an anomaly.
Comparable same-store sales for May were 1.9% higher than during the same period last year. Retail sales for the month totaled $39.7 million, a 10.8% jump over last year's mark of $35.8 million.
But will the good times last? Market research firm NPD is estimating flat sales growth for premium jeans in 2005. And with growing concerns of a jeans glut, the notion that blue jean manufacturers will be singing the blues may not be so farfetched.
That would be bad news for the many companies that depend on a healthy and fit jeans market. Abercrombie & Fitch (NYSE:ANF), The Buckle (NYSE:BKE), and American Eagle Outfitters (NASDAQ:AEOS) are just a few of the larger retailers thriving because of denim threads.
But it's the premium denim market where a new name seems to pop up every month. G-Star, AG, Diesel, and Paper Denim & Cloth, along with a closetful of other retailers, are pushing the envelope with trendy jeans wear.
The Guess? line, however, seems uniquely positioned between the two price points. Its jeans are priced higher than those from The Buckle or American Eagle, but they are often considerably less than those from Diesel or Paper Denim & Cloth.
Guess? is not alone in its middle-of-the-road pricing. Levi's Premium and the newly formed Ruehl line from Abercrombie & Fitch are also attacking this area of the market.
To combat the trendsetters among high-end labels, the value offered by lower-priced retailers, and the manufacturers of comparably priced jeans, Guess? will have to continue staying ahead of the fashion curve.
For more on Guess?, check out these articles:
- Analyst jargon offers little hint of the company's value.
- Guess? knocked its first-quarter earnings out of the park.
- Its fourth-quarter results weren't too shabby, either.
Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.
