| Imagery Source: Wikipedia |
| Information Source: Guess? Inc |
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Fourth Quarter Fiscal 2025 Results: Revenues Increased to $932 Million, Up 5% in U.S. Dollars and 9% in Constant Currency Delivered Operating Margin of 11.1%; Adjusted Operating Margin of 11.4% GAAP EPS of $1.16 and Adjusted EPS of $1.48 |
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Full Fiscal Year 2025 Results: Revenues Increased to $3.0 Billion, Up 8% in U.S. Dollars and 10% in Constant Currency Delivered Operating Margin of 5.8%; Adjusted Operating Margin of 6.0% GAAP EPS of $0.77 and Adjusted EPS of $1.96 |
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Full Fiscal Year 2026 Outlook: Expects Revenue Increase between 3.9% and 6.2% in U.S. Dollars Expects GAAP and Adjusted Operating Margins between 4.3% and 5.2% and 4.5% and 5.4%, respectively Expects GAAP EPS between $1.03 and $1.37 and Adjusted EPS between $1.32 and $1.76 Plans to Execute Business and Portfolio Optimisation Expected to Unlock Approximately $30 Million in Operating Profit in Fiscal Year 2027 |
| Guess?, Inc. (NYSE: GES) today reported financial results for its fourth quarter and full fiscal year ended February 1, 2025. |
| Carlos Alberini, Chief Executive Officer, commented, “In the fourth quarter, we delivered revenue growth of 5% in U.S. dollars and 9% in constant currency. The growth in the period was primarily driven by the rag & bone acquisition, coupled with positive momentum in our wholesale businesses in Europe and the Americas and increased licensing revenues. All of our operating segments posted revenue growth, except for our Asia segment. With this performance, we closed the year with revenue growth of 8% in U.S. dollars and 10% in constant currency. During the year, we delivered solid results with our Licensing segment and our wholesale businesses in Europe and the Americas, but missed our plans for our direct-to-consumer business due to slower customer traffic in North America and Asia. All considered, for the year, we reached almost $3 billion in revenues and $174 million and $180 million in GAAP and adjusted operating earnings, respectively. Importantly, this year we reached a significant milestone for our Company, as we executed our first acquisition in Guess’s history, with the addition of rag & bone to our portfolio.” |
| Paul Marciano, Co-Founder and Chief Creative Officer, commented, “Over the last 44 years, we have built a significant global business supported by a powerful platform that integrates multiple product categories and strong capabilities. This infrastructure has fueled the development and growth of the Guess brand in more than 100 countries. Since the inception of our Company, we have built strong relationships with key partners to optimise our performance, offering customers the best products and providing a great shopping experience in any place in the world we choose to do business. We have great teams that work relentlessly with all our partners to perfect our model. We are very proud of what we have built together and want to thank them for their great contributions. We see great opportunities ahead for our Company and remain fully committed to maximising our potential in the years to come.” |
| Mr. Alberini concluded, “As we enter fiscal year 2026, we are excited about our growth opportunities for our core Guess business, our recently launched Guess Jeans brand and our just acquired rag & bone business. We are focusing our strategic initiatives on increasing direct-to-consumer sales productivity globally and improving profitability through business and portfolio optimisation. In connection with this, after many years of running our direct operations in Greater China, we believe there is an opportunity for this market to be directly developed and managed by a local, highly experienced partner. We have already met several potential candidates for consideration, and we expect this transition to be completed before the end of this fiscal year. In North America, we see an opportunity to streamline our Guess full price store portfolio by exiting non-strategic, unprofitable locations, and to reduce costs by consolidating some of our infrastructure supporting this business. Our fiscal 2026 outlook includes the anticipated impact from these actions, and we expect that, together, they will unlock approximately $30 million in operating profit in fiscal 2027.” |
| Non-GAAP Information |
| This press release contains non-GAAP financial measures, including certain adjusted results of operations and outlook measures, constant currency information and free cash flow measures. See the heading “Presentation of Non-GAAP Information” for further information and the accompanying tables for a reconciliation to the comparable GAAP financial measure. |
| rag & bone Acquisition |
| On April 2, 2024, the Company and global brand management firm WHP Global completed the previously announced acquisition of New York-based fashion brand rag & bone. Under the terms of the agreement, the Company acquired all the rag & bone operating assets and assumed the related operating liabilities of the business. In addition, a joint venture owned 50% each by the Company and WHP Global acquired rag & bone’s intellectual property. As of April 2, 2024, the Company integrated rag & bone into its existing segments. |
| Fourth Quarter Fiscal 2025 Results |
| For the fourth quarter of the fiscal year ended February 1, 2025 (“fiscal 2025”), the Company recorded GAAP net earnings of $81.4 million, a 29% decrease from $115.3 million for the same prior-year quarter. The results for the fourth quarter of fiscal 2025 included a net $18.9 million unrealised loss due to the change in fair value of the derivatives related to the Company’s convertible senior notes due 2028 and the related convertible note hedge. GAAP diluted net earnings per share (“EPS”) decreased 32% to $1.16 for the fourth quarter of fiscal 2025, compared to $1.71 for the same prior-year quarter. The Company estimates a positive impact from its share buybacks of $0.05 and a negative impact from currency of $0.13 on GAAP diluted EPS in the fourth quarter of fiscal 2025 when compared to the same prior-year quarter. |
| For the fourth quarter of fiscal 2025, the Company’s adjusted net earnings were $77.7 million, a 30% decrease from $110.8 million for the same prior-year quarter. Adjusted diluted EPS decreased 26% to $1.48, compared to $2.01 for the same prior-year quarter. The Company estimates a positive impact from its share buybacks of $0.09 and a negative impact from currency of $0.17 on adjusted diluted EPS in the fourth quarter of fiscal 2025 when compared to the same prior-year quarter. |
| Net Revenue. Total net revenue for the fourth quarter of fiscal 2025 increased 5% to $932.3 million from $891.1 million in the same prior-year quarter. In constant currency, net revenue increased by 9%. |
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| Earnings from Operations. GAAP earnings from operations for the fourth quarter of fiscal 2025 decreased 28.4% to $103.6 million (including a $6.4 million unfavourable currency translation impact), from $144.8 million in the same prior-year quarter. GAAP operating margin in the fourth quarter of fiscal 2025 decreased 5.2% to 11.1%, from 16.3% for the same prior-year quarter, driven primarily by higher expenses, primarily due to a net positive impact from the settlement of a previously-disclosed stockholder derivative lawsuit recognized in the same prior-year quarter and higher advertising expenses and store costs, and the impact of newly acquired businesses, partially offset by lower performance-based compensation. The negative impact of currency on operating margin for the quarter was approximately 10 basis points. |
| For the fourth quarter of fiscal 2025, adjusted earnings from operations decreased 18.2% to $106.5 million, from $130.2 million in the same prior-year quarter. Adjusted operating margin decreased 3.2% to 11.4%, from 14.6% for the same prior-year quarter, driven primarily by higher expenses, higher advertising expenses and store costs, and the impact of newly acquired businesses, partially offset by lower performance-based compensation. |
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| Other income (expense), net. Other expense, net for the fourth quarter of fiscal 2025 was $23.4 million compared to other income, net of $13.2 million for the same prior-year quarter. The change was primarily due to the fair value remeasurement of derivatives related to the Company’s convertible senior notes due 2028 and the related convertible note hedge resulting in a net unrealized loss of $18.9 million during the fourth quarter of fiscal 2025, a realized gain on sale of other assets in the same prior-year quarter and lower net unrealized gains on the Company’s SERP-related assets compared to the same prior-year quarter, partially offset by net unrealized gains on foreign exchange currency contracts compared net unrealized losses in the same prior-year quarter. |
| Full Year Fiscal 2025 Results |
| For fiscal 2025, the Company recorded GAAP net earnings of $60.4 million, a 70% decrease from $198.2 million for the fiscal year ended February 3, 2024 (“fiscal 2024”). The results for fiscal 2025 included a net $60.7 million unrealised loss due to the change in fair value of the derivatives related to the Company’s convertible senior notes due 2028 and the related convertible note hedge. GAAP diluted EPS decreased 75% to $0.77 for fiscal 2025, compared to $3.09 during fiscal 2024. The Company estimates a positive impact from its share buybacks of $0.03 and a negative impact from currency of $0.23 on GAAP diluted EPS for fiscal 2025 when compared to fiscal 2024. |
| For fiscal 2025, the Company recorded adjusted net earnings of $104.5 million, a 40% decrease from $174.0 million for fiscal 2024. Adjusted diluted EPS decreased 38% to $1.96, compared to $3.14 for fiscal 2024. The Company estimates its share buybacks had a positive impact of $0.10 and currency had a negative impact of $0.28 on adjusted diluted EPS during fiscal 2025 when compared to fiscal 2024. |
| Net Revenue. Total net revenue for fiscal 2025 increased 8% to $3.00 billion, from $2.78 billion in fiscal 2024. In constant currency, net revenue increased by 10%. |
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| Earnings from Operations. GAAP earnings from operations for fiscal 2025 decreased 34.0% to $173.8 million (including a gain of $13.8 million on the sale of the U.S. distribution centre during the second quarter of fiscal 2025 and a $15.7 million unfavourable currency translation impact), from $263.3 million in fiscal 2024. GAAP operating margin in fiscal 2024 decreased 3.7% to 5.8%, from 9.5% in fiscal 2024, driven primarily by higher expenses, including higher advertising expenses and store costs, a net positive impact from the settlement of a previously-disclosed stockholder derivative lawsuit recognized in the prior year, separation charges and transaction costs, the unfavorable impact of newly acquired businesses and the unfavorable currency impact, partially offset by the favorable impact of higher revenues, higher initial markups and a gain on the sale of assets. The negative impact of currency on operating margin for fiscal 2025 was approximately 30 basis points. |
| For fiscal 2025, adjusted earnings from operations decreased 29.6% to $179.5 million from $255.0 million in fiscal 2024. Adjusted operating margin decreased 3.2% to 6.0% for fiscal 2025, from 9.2% in fiscal 2024, driven primarily by higher expenses, including higher advertising expenses and store costs, the unfavorable impact of newly acquired businesses and the unfavorable currency impact, partially offset by the favorable impact of higher revenues and higher initial markups. |
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| Loss on Extinguishment of Debt. In March 2024, the Company issued approximately $12.1 million principal amount of additional convertible senior notes due April 2028 (together with the additional convertible senior notes issued in January 2024, the “Additional 2028 Notes”) in exchange for approximately $14.6 million of its outstanding convertible senior notes due April 2024 (the “2024 Notes”). The Additional 2028 Notes have the same terms, constitute a single series with, and have the same CUSIP number as the other outstanding convertible senior notes due April 2028 (together with the Additional 2028 Notes, the “2028 Notes”; collectively with the 2024 Notes, the “Notes”). Immediately following the closing of this transaction, approximately $33.5 million of the 2024 Notes remained outstanding, all of which were settled upon maturity during April 2024. As a result of the transaction, the Company recognised a $2.0 million loss on extinguishment of debt during the first quarter of fiscal 2025. |
| Other expense, net. Other expense, net for fiscal 2025 was $73.4 million compared to $5.1 million in fiscal 2024. The change was primarily due to the fair value remeasurement of derivatives related to the Company’s convertible senior notes due 2028 and the related convertible note hedge resulting in a net unrealized loss of $60.7 million during fiscal 2025, a net gain on sale of other assets in fiscal 2024, higher net realized losses from foreign currency exposures compared to fiscal 2024, partially offset by higher net realized and unrealized gains on foreign exchange currency contracts compared to fiscal 2024. |
| Dividends |
| The Company’s Board of Directors approved a quarterly cash dividend of $0.30 per share on the Company’s common stock. The dividend will be payable on May 2, 2025, to shareholders of record as of the close of business on April 16, 2025. |
| Share Repurchases |
| On March 25, 2024, the Board of Directors authorised a new $200.0 million share repurchase program. On March 28, 2024, in connection with the additional exchange and subscription offering related to the 2024 Notes and the 2028 Notes, the Company repurchased approximately 0.3 million shares of its common stock for $10.3 million through broker-assisted market transactions. During fiscal 2025, the Company also repurchased approximately 2.3 million shares of its common stock in open market transactions totalling $50.0 million, leaving a capacity of $139.8 million under the share repurchase program. Combined, these transactions resulted in the repurchase of approximately 2.6 million shares for $60.3 million during the fiscal year 2025, all of which occurred during the six months ended August 3, 2024. |
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| Guess?, Inc |
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Guess?, Inc: Reports Fiscal Year 2025 Fourth Quarter Results
