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Guess? Inc. increases European credit facility to €350 million

EditorAhmed Abdulazez Abdulkadir
Published 01/07/2024, 15:14
GES
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LOS ANGELES - Guess?, Inc. (NYSE: GES) has expanded its European revolving credit facility, boosting borrowing capacity from €250 million to €350 million through its Swiss subsidiary, Guess (NYSE:GES) Europe Sagl. This enhancement, announced today, extends the company's access to capital for the next three years, reflecting lender confidence and underscoring the region's strategic importance.

The facility's interest rate is tied to Guess?'s sustainability performance, with annual adjustments based on the company's success in reducing greenhouse gas emissions, sourcing sustainable materials, and the prevalence of Guess ECO products. CEO Carlos Alberini sees the expansion as a reinforcement of the company's strategy and a means to integrate financial and environmental objectives.

Guess?, Inc., a global lifestyle brand, recently expanded its portfolio by acquiring assets and a 50% stake in the intellectual property of fashion brand rag & bone on April 2, 2024. The company operates 1,048 retail stores across Europe, the Americas, and Asia, with partners and distributors adding 533 stores, reaching approximately 100 countries as of May 4, 2024.

This financial move is based on a press release statement from Guess?, Inc.

In other recent news, Guess Inc. reported a strong first quarter, exceeding market expectations with significant revenue and earnings per share (EPS) growth. The company's total revenue increased by 7% year-over-year and its gross margin expanded, contributing to the EPS outperformance. The recent acquisition of the rag & bone business also aided in this growth, contributing 4% to the constant currency sales growth for the quarter.

Despite these positive results, both Telsey Advisory Group and Jefferies have lowered their price targets for Guess, citing moderated sales growth and expectations of softer consumer trends. Telsey Advisory Group reduced its target from $30 to $26, while Jefferies lowered its target from $29 to $25. Both firms maintained their previous ratings on the stock, with Telsey keeping a Market Perform rating and Jefferies maintaining a Hold rating. These revisions come amid concerns of retail traffic challenges in the Americas and anticipated pressure on operating margins due to elevated expenses.

InvestingPro Insights

In light of Guess?, Inc.'s recent strategic financial moves, real-time data and insights from InvestingPro paint a promising picture for the company. With a market capitalization of $1.09 billion, Guess? boasts a highly attractive P/E ratio of 4.86, which further dips to 4.6 when adjusted for the last twelve months as of Q1 2025. This low earnings multiple may indicate that the stock is undervalued relative to its earnings potential, aligning with one of the InvestingPro Tips that highlights the company as trading at a low earnings multiple.

Another key metric that stands out is the company's dividend yield, which was 5.88% as of mid-year 2024. This is complemented by a remarkable dividend growth of 33.33% in the last twelve months as of Q1 2025. This robust dividend performance is echoed in two InvestingPro Tips: Guess? has not only raised its dividend for 4 consecutive years but has also maintained dividend payments for 18 consecutive years. Such a consistent track record could be particularly attractive to income-focused investors.

Despite recent price fluctuations, with a 3-month total return of -31.79%, the company's liquidity position remains strong. Guess? has liquid assets that exceed its short-term obligations, offering a cushion against market volatility and potential downturns. Additionally, analysts predict the company will be profitable this year, which is an encouraging sign for potential investors.

For those interested in a deeper dive into Guess?, Inc.'s financial health and future prospects, InvestingPro offers a comprehensive set of tips and metrics. There are 11 additional InvestingPro Tips available that could provide further clarity on the investment potential of Guess?. To access these tips and enhance your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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