Guess? Inc. (GES) is outpacing the market on record second-quarter results and higher Zacks Consensus Estimates. During the past 2 months, analysts polled by Zacks boosted full-year earnings forecasts from $1.92 to $2.17 per share.

Company Description

Guess?, Inc. designs, markets, distributes and licenses contemporary apparel, denim, handbags, watches, footwear and other related consumer products.

As of August 1, 2009, the Company operated 431 retail stores in the United States and Canada and 723 retail stores outside of North America, of which 106 were directly owned.

Bullish Estimates and Solid Momentum

During the past 2 months, analysts polled by Zacks boosted current full-year earnings forecasts from $1.92 to $2.17 per share.

For the following year, the Zacks consensus Estimate jumped from $2.22 per share to $2.46 over the past 2 months.

GES outperfromed the market by more than 40% over the past year and by more than 15% since reporting second-quarter results.

Record Results

In late August, the company posted second-quarter net earnings that hit a record $59.6 million, versus last year’s $53.8 million. On an earnings per share basis, the second quarter saw 64 cents, beating the previous year’s 57 cents and exceeding the Zacks Consensus Estimate by 45.5%. Guess boasts an excellent record of outpacing the Zacks Consensus Estimate dating back to January 2005.

Revenues soared to a record $522.4 million, 1.4% above last year’s $515.2 million.

Paul Marciano, Chief Executive Officer, commented, “We are extremely pleased with our second quarter financial performance. We increased both revenues and earnings over last year’s results to record levels, which represents a significant achievement in today’s challenging environment. The actions that we took to protect our margins and preserve our strong capital structure are clearly paying off. In the period, we delivered strong product margins, achieved significant SG&A leverage and generated solid operating cash flow, further strengthening our capital structure. Europe’s performance was key to our results, posting revenue growth of 21% and increasing operating earnings by 30% in the period. Overall, these results truly underscore the strength and versatility of our brand and demonstrate our team’s ability to adapt and deliver solid results, even in challenging conditions.”

A Dividend Hike

The company also boosted its quarterly dividend by 25% to 12.5 cents per share, which translates into an industry-leading yield of 1.3%. The new dividend was paid on September 25.

Favorable Comparisons

Guess offers a return on equity of 27%, well above the industry average of 10%. The company’s net profit margin of 10% compares favorably to a negative industry average.

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