Guess?, Inc. (NYSE: GES, stock) has confirmed to announce its’ earning tomorrow, Tuesday June-5,2007, after market close. Guess? designs, markets, distributes and licenses a lifestyle collection of casual apparel and accessories for men, women and children. Its apparel is marketed under trademarks, including GUESS, GUESS?, GUESS U.S.A., GUESS Jeans, GUESS? and Triangle Design, Question Mark and Triangle Design, BRAND G, a stylized G, GUESS Kids, Baby GUESS and MARCIANO.

Rating Indicators for GES:

• Wall Street consensus : 0.28
• StockScouter rating : 6 / 10
• Whisper Number for this stock : 0.28
• Schaeffer rating for this stock : 7 / 10
• Power Rating : 4 / 10
• Insider Trading (last 52 weeks) : ($207.65M)
• Zacks Analysts Rating: Moderate Buy
• Option Trading: Sept 2007 45 Call
• Implied Volatility (IV) for July 2007 $45.0 Strike : 42.83%

Sales, Income & Growth – For the past 12-months, GUESS registered $1.19 Billion sales versus the industry’s $3.04 Billion. Income amounted to $123.17 Million against the industry’s $203.81 Million. While GUESS 12-months sales growth is at 26.60%, the income growth is in the region of 109.40% (the same industry sector sales growth is at 10.80% and income growth of 19.70%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 10.4%. GUESS has a debt/equity ratio of 0.12 compare to industry’s ratio of 1.33.

Stock Resistance & Support Level – The resistance is at 45.79 (52-week high) while the first level support is at 40.95 (50-day moving average).

Risks – The price-to-earnings multiple, 34.10 is higher than the average industry level. Two or more executives, board directors or major shareholders – including one high-level executive: sold a large number of shares recently. The Implied Volatility is rather high.

Last week, strong profit report from apparel retailers Coldwater Creek Inc. which reported first-quarter earnings that beat analyst expectations, helped by a good reception to its spring merchandise gives the much needed hint on how the overall sector will performs. Traditionally Guess has been consistently beats earning by quite a huge margin and gapped up almost immediately thereafter.

Seven Summits Strategic Investments releases its Stocks to Watch Guide which amongst others listed Guess Inc. as one of the shorlisted candidates. Seven Summits Investment Research is an independent investment research group, which focuses on the U.S. equities and options markets.

If Bernanke doesn’t rattle any nerves, the stock market could well continue moving up and driving higher the riskier segments of the market – he will speaks Tuesday at the International Monetary Conference and is expected to be typically hawkish on inflation. The typically hawkish Richmond Federal Reserve President Jeffrey Lacker speaks on inflation on Wednesday morning, and St. Louis Fed President Thomas Hoenig speaks later that afternoon.

On Wednesday, the government will offer its revised estimate of first-quarter productivity, while Thursday’s schedule includes data on consumer credit and wholesale inventories. Friday will bring the figures on the April trade deficit, which is expected to show a decline to $63 billion from $63.9 billion in March.

So, should Guess maintains its’ earning record, the stock might just continue the uptrend currently charted on the board. However please note that the multiple is quite high and couple with the high volatility, you might want to trade the option with sufficient time-value should you choose to do so.

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June 4th, 2007 by financetwitter

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