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Guess Stock Sees Drastic Decline Amid Inventory and Profit Issues

Guess stock has plummeted 35% in 2025, facing challenges from elevated inventory, heavy markdowns, and declining profitability. With a strategic shift in China and store closures planned in North America, investors are urged to reassess their positions in GES, as the outlook remains unattractive.

Date: 
AI Rating:   4

Guess Stock Performance: Guess, Inc. (NYSE: GES) has demonstrated a stark contrast to the S&P 500, with a staggering 35% decline in stock value in 2025 compared to the S&P’s 8% drop. This significant underperformance is attributed to supply chain challenges, elevated inventory levels, and an unfavorable retail environment exacerbated by heavy markdowns. As a result, profitability has taken a notable hit, especially during the holiday quarter, calling concerns into question around its potential for recovery.

In terms of Earnings Per Share (EPS), the current fiscal challenges may lead to further declines, impacting investor sentiment negatively. Furthermore, the company's push to increase revenues through its acquisition of Rag & Bone has not yet yielded substantial profit gains, suggesting that while revenue may increase modestly, net income will continue to be under pressure.

Revenue Growth: Guess reported a revenue growth of 7.9% in the last 12 months, which sounds promising but still lags behind the S&P 500’s growth of 5.3%. The slightly better revenue growth rate, despite significant operational challenges, indicates some positive direction but doesn’t overshadow the overall weak financial performance.

Profit Margins: Reportedly, Guess's operating margin stands at a mere 6.0%, far below the 13.1% of the S&P 500. This uneven profitability further cultivates a negative investor outlook and reflects poorly on management’s efficiency and operational effectiveness. It signals potential caution for potential buyers.

Furthermore, Guess’s balance sheet displays concerning metrics, characterized by a debt-to-equity ratio of 278.0%, compared to the industry average of 21.5%. This precarious financial stability casts long shadows over investor confidence in the company, making it appear less resilient in adverse market conditions.

Lastly, given the current market backdrop of volatility and trade tensions, investors are likely to remain wary of investing in GES, as the company is not equipped to withstand economic downturns effectively. The overall evaluation of Guess stock suggests that the company’s current financial situation is fundamentally unattractive for investment at this time.

Stocks:  GES