Guess’ Inc. Earnings Preview

Guess Inc. (GES) apparel designer and distributor is currently trading at $27. Guess Inc. is trading in a fifty two week range between $26.14-34.94. The stock has underperformed the broad market this year; as GES is down 13.16% year to date. Guess Inc. will report earnings on May 29 after market close. Guess has rallied only 3 of the last 8 times on earnings. The past two quarters Guess sold off on earnings announcements. The average move on earnings for Guess is about 4.7% percent. This quarter market makers are implying that the stock could move 10.8%. An Options trader seem to think that the stock will rally on earnings or is hedging before an earnings move. Today we saw a trader come in and buy 1000 GES July $29 calls for .49 cents. The stock is trading very bearishly below the Ichimoku cloud. I believe with a terrible chart, mixed historical earnings performance, GES is setting up for a short on earnings.

Trade: 26-24 Bear Put Spread
Risk: 30 per one lot
Max Profit: 170 per one lot