We are reiterating our Buy rating and $32.50 price target for Guess?, after the company reported mixed 3QFY24 (October) results, with EBITDA handily beating Street consensus, but EPS a miss, driven by a higher than expected tax rate and slightly weaker top line results, as Europe saw slowing traffic and the domestic stores remain negative. Further, management reduced 4Q guidance, as they believe traffic trends have remained tough going into the season. That said, we believe there remains upside potential, and we view the company's business model as still setting up for strong results in FY25, with the launch of a new brand (Guess? Jeans), the recapture of the company's license for domestic outerwear and a normalization of the expense base. Further, with, before the 3Q "miss" GES offering a 5%+ dividend yield and, based on our new projections, trading at 5X our FY25 EBITDA of $322.1 million, we believe today should offer a strong opportunity for investors willing to look beyond the current holiday season to invest in a truly global business model with compelling drivers. As such, we are reiterating our Buy rating and $32.50 price target on GES, which now translates to 6.5X our new FY25 EBITDA.
