Disclosures

Guess?, Inc.

I, Jeff VanSinderen , certify that this report reflects my personal beliefs about this company and that no portion of my compensation was, is or will be directly or indirectly related to the specific recommendations or views discussed in this report.

Disclosure

  • B. Riley & Co., LLC, or any of its affiliates, does and seeks to do business with companies covered in its research reports.
  • A portion of this analyst’s compensation is based on the sales, trading and investment banking activities of B. Riley & Co., LLC.
  • B. Riley & Co., LLC, or any of its affiliates, has received compensation from this company in the past 12 months.
  • This company currently is, or within the past 12 months was, a client of B. Riley & Co., LLC. or any of its affiliates. The services provided were Non-Investment Banking Securities-Related Services.
  • This report may be distributed by FBR Capital Markets & Co., an affiliate of B. Riley & Co., LLC and as such constitutes third party research. For additional information, please visit http://www.fbr.com/disclosures.
Disclosure Chart

Ratings Distribution as of August 21, 2017
Rating Number of Companies Percent of Total
Buy 145 74.4%
Neutral 49 25.1%
Sell 1 0.5%
Total 195 100%
% with Investment Banking Relationships
Rating Number of Companies Percent of Total
Buy 23 88.5%
Neutral 3 11.5%
Sell 0 0.0%
Total 26 100%

Explanation of B. Riley & Co. LLC's Rating System

  • Buy: We generally expect “Buy” rated stocks to have an above-average risk-adjusted total return over the next 12 months. We recommend that investors buy the securities at the current valuation.
  • Neutral: We generally believe “Neutral” rated stocks will have an average risk-adjusted total return over the next 12 months.
  • Sell: We generally expect “Sell” rated stocks to have a below-average risk-adjusted total return over the next 12 months. We recommend that investors reduce their positions until the valuation or fundamentals become more compelling.

Risks and Considerations

  • Commodity Costs - Should commodity prices for the Company's resources increase, the Company's operating margins could be harmed.
  • Competition - The industry is highly competitive and many of the Company's competitors have greater resources.
  • Currency Exposure - Since the Company purchases its finished goods from foreign manufacturers and sell its products in transactions denominated in U.S dollars, a weakening of the U.S dollar could negatively impact the Company.
  • Discretionary Spending - The products the Company sells are largely discretionary in nature and any slowdown in consumer spending would have an unfavorable impact on the Company.
  • Economy - Macro-economic issues such as increasing oil and gas prices and a possible drop in consumer spending could have a negative impact on the Company's business.
  • Insider Ownership - Directors and executive officers collectively own a significant percentage of the Company. While this may align interest with other shareholders, investors might view a future sale by any director or officer negatively.
  • International Operations - The Company derives a significant portion of its revenues from outside the United States. The Company is subject to foreign exchange risk and the risks inherent in managing a global Company.
  • Licensee Risk - There is always a risk that a licensee could execute poorly and temporarily hurt the brand for its respective category/classification. Licenses also are subject to renewal.
  • Loss of Key Personnel - In our opinion, the current management team will be instrumental in executing the Company's growth strategy. The resignation of a key member of management would have a negative impact on the Company.
  • Operating leases - The Company is subject to significant lease liability. Should results deteriorate and the Company be forced to close stores, cash costs to get out of leases could be considerable.
  • Pricing Pressure - The Company's business could be affected by pricing pressure within the market.
  • Product/Design - The Company's business is subject to the same elements of general fashion/trend risk as that of any apparel brand/retailer.
  • Seasonality - The Company's results are highly seasonal.
  • Weather - The weather can significantly impact the Company's results.
  • General Industry - The Company could miss our estimates and/or their financial guidance.

Additional Risks and Considerations

    Inventory Risk - The company's gross margins could come under pressure if it or a competitor's inventory is too high and it is forced to become more promotional as a result.