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Take a Guess at Why Guess?, Inc. Stock Took a Dive in 2016

GES Gross Profit Margin (TTM) Chart
GES Gross Profit Margin (TTM) Chart

GES Gross Profit Margin (TTM) data by YCharts

Now what

Consumer confidence hit a 12-year high in December, which could help to increase spending on discretionary goods, such as higher-priced clothing. Additionally, Guess? has had a few bright spots in recent earnings, such as unexpectedly strong sales growth in Europe and some success with its push to increase e-commerce sales. Going forward, the company plans to turn its dismal earnings performance in 2016 around by negotiating rent reductions, closing unprofitable stores, enhancing supply chain value through vendor consolidation and other cost savings, and continually enhancing digital capabilities.

Those initiatives look positive but will be hard to make successful in an increasingly competitive market. Until there is more proof that the company's turnaround strategy is working, there looks to be better clothing stocks for investors interested in playing this market.

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Seth McNew has no position in any stocks mentioned. The Motley Fool recommends Guess?. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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