We are reiterating our Buy rating, projections and $23 price target for Guess? after visiting stores in Metropolitan New York City and Long Island. We believe, after a long period of shifts and upgrades, Guess? main line locations are showing signs of a turn, driven by key new denim styles, the ability to focus even more on fashion driven items and compelling Spring offerings, including dresses, handbags and activewear. Further, while not as advanced in the turn as the main line stores, Guess? outlets are shifting the product mix and looks to also emphasize the fashion side of Guess?, which we believe will eventually shift the outlets back to a growth mindset. As such, and with investors missing the overall Guess? story of international growth and limited domestic China tariff exposure, we believe GES provides a compelling risk/reward and a dividend yield of 12%; we reiterate our Buy rating and $23 price target for GES.
