Fly News Breaks for March 12, 2015
GES
Mar 12, 2015 | 07:27 EDT
Piper Jaffray says licensing revenue makes up only 5% of revenue but 82% of Guess's profitability allocated for corporate overhead. It sees licensing revenue contracting over the next few years as rates get renegotiated at lower levels. Piper points out several of Guess�s licenses were signed ten years ago when the brand was more relevant. The firm estimates that every $10M in licensing revenue shortfall on an annualized basis is 8c in earnings per share. It thinks Guess's slowing business fundamentals are being masked by the license revenue and keeps an Underweight rating on the stock.
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