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Guess?, Inc (NYSE:GES) reported results and watched the stock pop off its bottom. Imagine an apparel brand that is doing well in this economy. I guess people buy fancy jeans to make themselves feel good. The stock is still near its 52 week low. Guess claims to have increased their cash position which now stands at 10% of its market cap. That’s with the stock at the bottom of its trading range.

A couple of things to worry about. For nine months their cost of product sales is up approximately 2.5%. This fact alone should make investors worry. SG&A expenses are down by approximately 1%. They did not differentiate where the reductions were. But if you throttle back the marketing costs you lose marketplace momentum. Investors have no way to determine just what Guess is doing.

They conclude by sending a dividend signal. No change in dividends despite increases in cash. Therefore cash is earmarked for activities other than shareholder wealth creation.

Disclosure: none

Source: Guess: A Couple Things to Worry About