Michael Kors (KORS) & Guess? (GES) Critical Comparison

Michael Kors (NYSE: KORS) and Guess? (NYSE:GES) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Analyst Ratings

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This is a breakdown of current ratings and target prices for Michael Kors and Guess?, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Michael Kors 1 15 12 0 2.39
Guess? 0 4 3 0 2.43

Michael Kors currently has a consensus price target of $64.54, suggesting a potential upside of 3.96%. Guess? has a consensus price target of $17.32, suggesting a potential downside of 16.50%. Given Michael Kors’ higher probable upside, research analysts clearly believe Michael Kors is more favorable than Guess?.

Profitability

This table compares Michael Kors and Guess?’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Michael Kors 11.32% 40.86% 24.94%
Guess? -0.33% 6.20% 3.73%

Earnings and Valuation

This table compares Michael Kors and Guess?’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Michael Kors $4.49 billion 2.10 $552.50 million $4.24 14.64
Guess? $2.36 billion 0.72 -$7.89 million $0.70 29.63

Michael Kors has higher revenue and earnings than Guess?. Michael Kors is trading at a lower price-to-earnings ratio than Guess?, indicating that it is currently the more affordable of the two stocks.

Dividends

Guess? pays an annual dividend of $0.90 per share and has a dividend yield of 4.3%. Michael Kors does not pay a dividend. Guess? pays out 128.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Michael Kors has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500. Comparatively, Guess? has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Insider and Institutional Ownership

85.5% of Michael Kors shares are owned by institutional investors. Comparatively, 82.4% of Guess? shares are owned by institutional investors. 6.0% of Michael Kors shares are owned by company insiders. Comparatively, 29.6% of Guess? shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Michael Kors beats Guess? on 11 of the 16 factors compared between the two stocks.

About Michael Kors

Michael Kors Holdings Limited is a designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks MICHAEL KORS, MICHAEL MICHAEL KORS, and various other related trademarks and logos. The Company operates through three segments: retail, wholesale and licensing. The Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the Americas (the United States, Canada and Latin America), Europe and Asia, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the Americas, Europe and Asia. The Company licenses its trademarks on products, such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.

About Guess?

Guess?, Inc. designs, markets, distributes and licenses a lifestyle collections of apparel and accessories for men, women and children. The Company operates through five segments: Americas Retail, Europe, Asia, Americas Wholesale and Licensing. The Americas Retail segment includes the Company’s retail and e-commerce operations in North and Central America and its retail operations in South America. The Europe segment includes the Company’s retail, e-commerce and wholesale operations in Europe and the Middle East. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia. The Licensing segment includes the around the world licensing operations of the Company. Its apparel is marketed under various names, including GUESS, GUESS?, GUESS U.S.A., GUESS Jeans, MARCIANO, Question Mark and Triangle Design, GUESS Kids, Baby GUESS, YES, G by GUESS and GUESS by MARCIANO.

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