Analysts: Guess? Turnaround 'Will Take Time'

Guess?, Inc. (NYSE: GES) fell more than 9 percent Thursday after it cut guidance for the fourth quarter and analysts offered divided views on the company's outlook.

The apparel retailer is struggling to turnaround its business, but "this will take time to play out," Topeka analyst Dorothy S. Lakner said in a note maintaining a Hold rating and $18 target.

Wunderlich's Eric Bender doesn't expect a short-term turn-around but maintained a Buy rating and $27 target on the company, which hasn't seen same-store sales growth in more than four years.

Bender figures the company's Spring fashion line could provide an inflection point for the shares and cited its "lush and secure" 4 percent dividend yield in the mean time.

"The company needs to turn around its domestic operations before most investors become true believers," Bender said, suggesting that shares are "near their nadir."

Managers have made optimistic comments about Spring fashion sales, and plan to close 50 of its 492 domestic storefronts during the next 18 months, Bender said.

The store closings "could be critical to stabilizing earnings in the near term," according to Mizuho's Betty Chen, who "recommends avoiding" Guess shares.

The company reduced its 2014 earnings forecast Wednesday by about 12 percent to $1 to $1.10 a share, and Chen sees "little progress towards potential near-term turnaround."

Guess closed Thursday at $20.07, down $2.10 a share. Year-to-date shares are off more than 35 percent.