Four Stocks in Fashion: GES, AEO, BEBE, EXPR

Our Trading Reports in this Article:

• GES
• AEO
• BEBE
• EXPR

As the Q2 earnings season begins to wind down during the dog days of August, traders will need to pick their spots. There are a few prominent retailers slated to report their earnings this week. A couple look attractive while others merit a wait-and-see approach. Here’s what to watch for.

Keep Them Guessing

After the market closes on Wednesday, the apparel retailer Guess (NYSE: GES) will check in with the results of its Q2. Analysts are projecting revenue to come in 6.9% below the prior year quarter. Such an outcome will not be enough to slow the stock’s upward trajectory. Shares have been on a roll this summer and the 50-day moving average is on pace to eclipse the 200-day moving average in short order.

Betting on Guess in coming trading sessions is not for the faint of heart. The company has been a wild card for traders. It posted a major beat over Wall Street estimates last quarter and met expectations the period before. The retailer posted a slight miss in Q4 though and estimates have pulled back slightly during the last 90 days. Based on technicals this stock is worth a buy right now, but traders may want to protect with some put insurance.

American Eagle Outfitters (NYSE: AEO) will report its Q2 results before the opening bell on Wednesday. The company’s stock price has been on a tear this year and is up 38.2% year-to-date. Technicals are even more impressive for this retailer and Wall Street estimates have been trending upwards as we get closer to the release. It would take a major miss to slow the stock’s momentum and it does not seem likely at this point.

In Need of Some Love

The women’s clothing retailer Bebe Stores (Nasdaq: BEBE) took a big hit back in May when it reported its fiscal Q3 results and guided lower for its Q4 which will be reported on Thursday. The lackluster forecast was not enough to overcome better gross margins and a 7.2% improvement in same-store sales. The stock is down 24.7% so far this year.

Even with tempered expectations, Bebe is still a bit rich for my taste with a forward P/E of 26.1. I’ll pass on this one at least until after the results are reported.

One other apparel retailer for traders to watch in the coming days is Express (Nasdaq: EXPR). The company will unveil its Q2 earning prior to the open on Wednesday. The consensus is that EPS will be in line with last year’s Q2 and sales will be up 4.8%. Express shares have struggled since the 50-day moving average dropped below the 200-day moving average in mid-June. This is another stock that I would not bet on ahead of earnings.

Stock Traders Daily is now the #1 ranked website on Google for “Trading Advice”.

   

Support and Resistance Plot Chart for

Real Time Updates for Repeat Institutional Readers:

Factset: Request User/Pass

Bloomberg, Reuters, Refinitiv, Zacks, or IB users: Access Here.