Morningstar Rating

Stock Research and Analysis

by Bridget Weishaar

Bulls Say

Recent management changes reflect a response to shareholder concerns and introduce a fresh take on the business.
The high-margin, low-risk licensing business accounts for almost half of operating income and has room to expand.
Guess has an almost debt-free balance sheet, generates solid free cash flows, and pursues investor-friendly activities. From fiscal 2012 to 2014, the company repurchased roughly 10% of total shares outstanding, and almost $500 million is still open in the share-repurchase program. The dividend payout ratio was almost 40% in fiscal 2013. Read more 

Bears Say

Guess faces high fashion risk and has no economic moat in providing a sexy, fashion-forward, youthful lifestyle brand.
An uncertain global economic environment and an economically at-risk target market of 18- to 30-year-olds could weaken demand for high-priced apparel.
The U.S. and Southern European retail markets are relatively mature, making the company increasingly rely on emerging markets for growth. Read more 

Management

Because of the board structure, consolidated shareholder ownership, and continued reliance on Paul Marciano to lead the company, we give Guess a Poor stewardship rating. Founder and CEO Paul Marciano and his brother Maurice Marciano, the nonexecutive   Read more 

Profile

Guess designs, markets, distributes, and licenses contemporary apparel and accessories that reflect European fashion sensibilities under brands including Guess, Marciano,  Read more 

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