Guess? Q4 Profit Down, Announces Restructuring Plans

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(RTTNews) - Guess? Inc. (GES) reported that its net earnings attributable to the company for the fourth quarter of the fiscal year ended February 1, 2025 were $81.40 million, a 29% decrease from $115.27 million in the same quarter last year. On a per share basis, quarterly net earnings were $1.16 down from $1.71 last year. The results for the fourth quarter of fiscal 2025 included a net $18.9 million unrealized 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.

Quarterly adjusted net earnings attributable to the company were $77.70 million, a 30% decrease from $110.81 million for the same prior-year quarter. Adjusted earnings per share decreased 26% to $1.48, compared to $2.01 for the same prior-year quarter.

Total net revenue for the fourth quarter of fiscal 2025 increased 5% to $932.25 million from $891.05 million in the same prior-year quarter. In constant currency, net revenue increased by 9%. The growth in the period was primarily driven by the rag & bone acquisition coupled with positive momentum in wholesale businesses in Europe and the Americas and increased licensing revenue.

Looking ahead for the first-quarter of fiscal year 2026, the company projects loss per share to be in the range of $0.66 to $0.75 and adjusted loss per share of $0.65 to $0.74. The company expects quarterly consolidated net revenue growth in U.S. dollars to be between 5.8% and 7.5%.

For fiscal year 2026, the company expects earnings per share to be between $1.03 and $1.37 and adjusted earnings per share between $1.32 and $1.76. The company expects revenue increase to be between 3.9% and 6.2% in U.S. Dollars.

The company said it is concentrating on boosting direct-to-consumer sales efficiency worldwide and enhancing profits through business and portfolio improvements. After managing operations in Greater China for many years, an opportunity has been identified for the market to be developed and managed by an experienced local partner. Several candidates have been evaluated, and the transition is expected to be finalized before the fiscal year ends.

In North America, the company sees an opportunity to streamline its Guess full price store portfolio by exiting non-strategic, unprofitable locations, and to reduce costs by consolidating some of its infrastructure supporting this business.

The company noted that its fiscal 2026 outlook includes the anticipated impact from the actions and it expects that, together, they will unlock approximately $30 million in operating profit in fiscal 2027.

The company's board 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.

On March 25, 2024, the Board of Directors authorized a new $200.0 million share repurchase program.

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