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There's no disputing that the Guess brand is red hot. My cautious stance on this one has nothing to do with 'brand heat'. It has everything to do with my view that GES printed too much margin during the top of an extremely favorable sourcing and FX cycle.

That said, as with all brands, I keep a close eye on every little data point I find. The chart below caught my eye. The good news is that the year/year change in average selling price is up dramatically in Guess' US wholesale business. This has been the case since about mid-2007 based on my math. The more interesting point is that the yy change in sell-thru rate has been negative in 4 of the 5 past quarters to the tune of 25%.

Bulls will point out that there's a lot more to the GES story than US wholesale. At less than 25% of cash flow, they're right. But for a well-loved, high-multiple name that has been a HUGE play on the weakening dollar, these are data points I simply cannot gloss over.

Source: NPD Fashionworld and Research Edge, LLC