What Happened?
Shares of contemporary clothing brand Guess (NYSE:GES) jumped 28.7% in the morning session after the company announced it received a $13.00 cash acquisition offer from WHP Global. The deal would cover all outstanding shares other than those held by some existing shareholders like Paul Marciano, Maurice Marciano, and Carlos Alberini, planned to roll their stakes into the deal. The company added that it formed a special committee to review the offer but noted that there is no guarantee that the proposed offer will be approved or completed.
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What The Market Is Telling Us
Guess’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. But moves this big are rare even for Guess and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 23.1% on the news that the company reported fourth quarter 2023 results that blew past analysts' EPS expectations. Its revenue and operating margin also outperformed Wall Street's estimates.
On the other hand, its full-year earnings guidance fell short of Wall Street's estimates, but we note its revenue outlook was strong. During the earnings release, the company declared a special dividend of $2.25 per share and a quarterly dividend of $0.30 per share. Zooming out, we think this was still a good quarter.
Guess is down 9.9% since the beginning of the year, and at $12.45 per share, it is trading 62.7% below its 52-week high of $33.40 from March 2024. Investors who bought $1,000 worth of Guess’s shares 5 years ago would now be looking at an investment worth $1,966.
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