Fashion retailer Guess? (GES) reported better-than-expected third-quarter earnings Monday of $64.1 million, or 69 cents per share. The Street was expecting earnings to come in at just 50 cents per share. An earnings beat like that is always going to cause shares to be bought up in after-hours trade, and that’s exactly what happened in Monday’s after-hours session, with GES stock surging nearly 6%. 

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The real good news for Guess, however, came via its fourth-quarter outlook. The company said it expects fourth-quarter revenue of $585 million to $605 million on earnings of 77 cents to 80 cents per share. Those numbers are well above analyst expectations for revenue of $563.8 million and earnings of 69 cents per share in the fourth quarter.

Yes, there is no more guessing about Guess numbers. They are indeed strong, but now the question becomes how much higher can GES shares go. The chart below shows GES shares tremendous rise over the past 12 months.

GES stock is up nearly 178% since last holiday shopping season, and that kind of run is hard to sustain for just about any stock.

Of course, by technical standards GES shares are not overextended here. GES shares now trade right at their 50-day moving average (blue line). This means the stock currently trades at its short-term support level, and not way beyond this support level the way one would expect an overextended stock to trade if it were at the end of an unsustainable run.

Judging by both the technical picture of GES shares, and by the upbeat earnings outlook for the fourth quarter, investors could see a very fashionable upside in GES stock’s future.

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