Guess Drops to a Multi-Year Low on Downgrade

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Shares of Guess (NYSE: GES) dropped 5% to a multi-year low after Mizuho Securities downgraded the apparel retailer from neutral to underperform, and slashed its price target from $14 to $10. The stock has declined nearly 50% over the past 12 months. Analyst Betty Chen anticipates that weakness in the Americas and wholesale, which account for around half of Guess’ sales, will “overshadow green shoots in Asia and ongoing momentum in Europe.” Chen expects a shortfall in guidance soon, and continues “to question the strategy to rejuvenate the Americas segment and the multi-year retail store rollout strategy in Asia and Europe.” The key facts Guess posted its first quarter of annual sales growth in several years last quarter.