Ahead of the Bell: Guess falls in premarket
NEW YORK (AP) — Shares of Guess appear to be headed for a multi-year low Friday after the company announced the departure of both its chief financial officer and chief operating officer.
The stock fell 10 percent before the opening bell, which would put the price at lows not seen since the summer of 2009.
Shares have been sliding since August, when Guess cut its guidance for the year and posted disappointing numbers for the second quarter. The stock tumbled $10 in one day and has been moving largely south ever since.
The company said that the two executives were leaving to pursue other interests.
COO J. Michael Prince will stay with the company until Nov. 26. Senior Vice President and CFO Dennis Secor will remain until Dec. 7.
The entire sector started feeling pressure after Levi Strauss & Co. revealed in July that its profits during the second quarter had tumbled 38 percent.
Gap Inc. on Thursday posted revenue from established stores that fell short of Wall Street expectations.
Jefferies & Co. analyst Randal Konik downgraded Guess to "Hold" from "Buy" and slashed its price target to $25 from $45. Konik said that the departures "are significant, leadership is in flux, the brand is under pressure in the U.S. and international risks remain."
Guess CEO Paul Marciano said late Thursday that he expects a smooth transition, though there are no plans to find a new COO and other executives would step in to manage those responsibilities.
Betty Chen of Wedbush cut the company's price target to $24 from $27 and kept a "Neutral" rating. She said the company now lacks "serious leadership to steward the ship amidst a tumultuous turnaround despite a strong bench."
Margaret Whitfield of Sterne, Agee & Leach said that the personnel changes may allow Guess the opportunity to upgrade its executive team. She maintained a "Buy" rating and $36 price target.
Guess Inc.'s stock fell $2.58 to $23.31 in premarket trading.