Guess? Inc. (GES) is set to report FQ4 2014 earnings after the market closes on Wednesday, March 19th. Guess? is an upscale clothing and fashion retailer. This quarter has been marked by extreme weather including frequent snowstorms and frigid temperatures. As a result the retail sector has seen reduced customer traffic and diminished sales. But the weather has not held back all retailers, and a few high end stores including Michael Kors (KORS) have posted breakout quarters. This quarter investors have set the bar for GES higher than Wall Street has. Here is what they expect on Wednesday.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for Guess? to report 80c EPS and $772.79M revenue while the current Estimize.com consensus from Buy Side and Independent contributing analysts is 84c EPS and $778.38M in revenue. This quarter the buy-side as represented by the Estimize.com community is expecting Guess? to beat the Wall Street consensus on both EPS and revenue.
Over the past 5 quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting Guess?’s EPS and revenue 4 and 2 times respectively. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is more accurate than Wall Street up to 69.5% of the time, but more importantly it does a better job of representing the market’s actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing a larger difference between the 2 groups’ expectations, especially in EPS forecasts.
The distribution of estimates published by analysts on the Estimize.com platform range from 78c to 95c EPS and from $760.00M to $810.87M in revenues. This quarter we’re seeing a larger distribution of estimates on Guess?.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates signaling less agreement in the market, which could mean greater volatility post earnings.
Over the past 4 months the Wall Street EPS consensus remained relatively flat at 80c while the Estimize consensus oscillated between 84c and 85c. Meanwhile the Wall Street revenue forecast remained unchanged at $772.79M while the Estimize forecast dropped from a high of $785.82M to $778.38M. Timeliness is correlated with accuracy and downward analyst revisions at the end of the quarter are often a bearish indicator.
The analyst with the highest estimate confidence rating this quarter is GIDEONVV who projects 93c EPS and $782.00M in revenue. In the Winter 2014 season GIDEONVV is rated as the 121st best analyst and is ranked 72nd overall among over 3,950 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case GIDEONVV is making a bullish call expecting Guess? to beat the Estimize community’s expectations on both EPS and revenue.
This quarter contributing analysts on the Estimize.com platform are expecting Guess? to beat the Street’s expectations by 4c EPS and almost $6million in sales. Despite the poor weather which has hindered retailers, the Estimize community has set their expectations above the Street’s going into Wednesday’s report.
Get access to estimates for Guess? published by your Buy Side and Independent analyst peers and follow the rest of earnings season by heading over to Estimize.com. Register for free to create your own estimates and see how you stack up to Wall Street.