Guess?, Inc. GES looks well-positioned courtesy of solid digital business. The company has been progressing well with its strategic business plan unveiled in December 2019. These trends were witnessed in the company’s third-quarter fiscal 2022 results, with the top and the bottom line increasing year over year and surpassing their respective Zacks Consensus Estimates.
Let’s discuss further.
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Strategic Plan on Track
Guess? is focused on its strategic business plan. To this end, the company is committed to its six key strategies and has made remarkable progress against each of them. The core strategies include organization and culture, functional capacities, brand relevance with three main consumer groups (heritage, Millennials and Generation Z customers), customer focus, product brilliance and international footprint. In relation to its customer-centric initiative, the company implemented the salesforce platform in the United States, Canada and Europe and was encouraged with the initial results. With respect to its salesforce and omnichannel capacity rollout, Guess? is focused on implementing Customer 360 — a solution developed by salesforce for personalized marketing, customer data optimization and customers’ journey engagement, among other objectives.
The company is also focusing on brand-elevation strategy, which includes enhancing product quality, visual merchandising and boosting customers’ shopping experience across stores and online. It is rationalizing its store portfolio across retail and wholesale by shutting unproductive stores and accounts while lowering product offerings to develop a single business with more productive SKUs. Management is on track to streamline its cost structure to enhance the operating model and reduce SG&A expenses. The company expects to reinvest these cost-savings to enhance marketing and omnichannel capabilities.
Digital Business: Key Driver
Guess? is gaining from growth in the digital business, which continued to perform well in third-quarter fiscal 2022. The company’s e-commerce business in North America and Europe rose 15% year on year and 37% from third-quarter fiscal 2020 levels. Guess? is on track with its customer-centric initiatives, including omnichannel capabilities as well as advanced data analytics and customer segmentation. The company is on track to roll out omnichannel and ship-from-store capabilities across Europe. Guess? is bettering e-commerce operations through better data capturing, improving customer profiling and personalizing marketing and relationship management. These efforts are expected to help the company enhance its customer base and enrich the experience, which is likely to aid sales.
Shares of the Zacks Rank #1 (Strong Buy) company have gained 7.9% in the past three months against the industry’s decline of 1.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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