Core Viewpoint - Guess?, Inc. is expected to report revenue growth of 15.3% year-over-year for Q3 fiscal 2025, with revenues estimated at $751 million, while earnings per share are projected to decline by 12.2% to 43 cents [1][3]. Group 1: Factors Likely to Fuel Results - The company is experiencing strong brand momentum globally and positive customer responses across various product categories [3]. - Key strategies include enhancing organizational culture, focusing on customer needs, and maintaining brand relevance among different consumer groups, including heritage, Millennials, and Generation Z [3]. - The acquisition of rag & bone is anticipated to positively impact Q3 results, alongside strong performances in the wholesale business, particularly in European and American markets [4][5]. Group 2: Expected Challenges - The company faces challenges in a dynamic shopping environment where consumers are more selective and sensitive to pricing [6]. - High operating costs, particularly due to increased freight costs from shipping issues related to the Red Sea crisis, are expected to impact gross margins and profits [6]. - The adjusted operating margin is projected to decline to between 4.7% and 5.8%, down from 8.9% in the same quarter last year [7]. Group 3: Earnings Predictions - The adjusted earnings per share for Q3 are forecasted to be between 33 and 45 cents, indicating a decrease from 49 cents reported in the previous year [7]. - The company holds a Zacks Rank of 3 and an Earnings ESP of 0.00%, suggesting that the model does not predict an earnings beat this time [8].

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Core Insights - Truelink Capital has entered into a definitive agreement to acquire GES, a prominent player in the global exhibition and event industry, with the transaction expected to close by the end of 2024 [1][4] Company Overview - GES, established over 90 years ago, is recognized for its world-class exhibition, event, and brand activation solutions, operating across North America, Europe, and Asia [2] - The company offers comprehensive services including strategy, creative design, logistics, and event production, catering to various industries such as healthcare, aerospace & defense, financial services, manufacturing, technology, and retail [2] - GES has expanded into adjacent verticals, becoming a trusted partner for associations, independent organizers, corporate marketers, exhibitors, and agencies [2] Strategic Importance - The acquisition is seen as a strategic opportunity for Truelink Capital to enhance GES' offerings and expand into the agency vertical through Spiro [3] - Truelink Capital aims to invest in GES' existing services while pursuing organic growth and strategic acquisitions, leveraging GES' long-standing client relationships and adaptability [3] - Post-acquisition, GES' President Derek Linde will assume the role of President & CEO, indicating continuity in leadership [3][4] Investment Focus - Truelink Capital is a middle-market private equity firm focused on creating long-term value through partnerships with industry-leading companies, particularly in the industrials and tech-enabled services sectors [5] - The firm has a successful track record of operationally focused investments, indicating a commitment to enhancing GES' capabilities in technology and creative services [4][5]

Core Insights - Guess?, Inc. is experiencing growth driven by strong global brand momentum and customer demand, particularly in its Guess, Marciano, and rag & bone brands, despite facing challenges from a weaker consumer environment and elevated costs [1] Group 1: Growth and Performance - The company reported a year-over-year revenue increase of 10% in the second quarter of fiscal 2025, with net revenues reaching $732.6 million, largely attributed to the acquisition of rag & bone and strong wholesale results in Europe and the Americas [2] - Guess?'s wholesale business is a significant growth driver, particularly in European and Americas markets, positioning the company for sustained future success [3] Group 2: Strategic Initiatives - Guess? is implementing a multi-faceted strategy for long-term growth, including the successful integration of rag & bone, expanded marketing efforts, and new store openings in Europe [4] - The company has launched Guess Jeans targeting Gen-Z customers, which has exceeded sales expectations, and doubled its marketing investments to enhance customer engagement [4] - Guess? is optimizing its logistics network through a partnership with GXO Logistics to drive cost efficiencies in the U.S. and Europe, while strengthening its capital structure with expanded credit facilities [4] Group 3: Financial Challenges - Rising operating costs are impacting financial performance, with SG&A expenses increasing to 38.7% of sales from 34.6% a year earlier, primarily due to higher investments in rag & bone and increased marketing spend [5] - The gross margin declined to 43.7% from 44.3%, and adjusted operating margin fell to 5.2% from 9.8%, driven by increased expenses and promotional activity [5] - The company anticipates rising freight costs in the second half of the year due to the ongoing Red Sea crisis, which is expected to impact margins and operating profit [5] Group 4: Outlook Adjustments - Management revised its fiscal 2025 revenue growth projection to between 9.5% and 11%, down from the previous range of 10.7% to 12.7%, and adjusted earnings per share (EPS) forecast to between $2.42 and $2.70, compared to $3.14 reported in fiscal 2024 [6] Group 5: Competitive Landscape - Guess? faces challenges from unfavorable currency fluctuations and stiff competition from other textile-apparel players [7]

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Core Viewpoint - Guess?, Inc. reported Q2 2024 results that appeared optically good with a 10% top-line growth, primarily driven by the acquisition of rag & bone, but underlying comparable retail sales showed significant declines, particularly in the Americas and APAC regions [1][2][4] Financial Performance - The company experienced a 10% growth in top-line revenue, largely attributed to the acquisition of rag & bone, although specific figures were not disclosed [2] - Direct-to-consumer (DTC) comparable sales fell by 10% in the Americas and 14% in APAC, indicating ongoing challenges in these markets [2] - SG&A expenses increased by 23% year-over-year, amounting to an additional $50 million, partly due to the integration of rag & bone [3] Market Dynamics - The Americas segment has faced declining comparable sales since Q2 2023, with traffic issues and potential product problems contributing to the poor performance [2][5] - Europe showed a slight improvement with a 1% growth in comparable sales, suggesting that the brand is gaining traction in this region [2] Strategic Insights - The company plans to double its advertising-to-revenue ratio from 1.5%, which would increase marketing expenses by an additional $50 million annually [3] - Management intends to continue investing in marketing despite lower comparable sales, which may impact margins if sales do not improve significantly [3] Valuation Considerations - The current market capitalization of Guess? is approximately $1.05 billion, with a projected net income of about $150 million for FY25, resulting in a P/E ratio of 7x [4] - If sales decline by 10% in FY26, net income could drop to around $56 million, leading to a P/E ratio of 18x, indicating that the market anticipates continued negative trends [4] Analyst Sentiment - Concerns were raised regarding the potential influence of paid analysts on management's communications, which could affect investor perceptions [3][5] - Given the challenges and uncertainties surrounding the company's future, it has been suggested to categorize Guess? as a "too hard" investment opportunity, prompting a shift to a Hold rating [5]

Guess? Inc. (GES) posted mixed second-quarter fiscal 2025 results, with the top line increasing year over year. The bottom line declined from the year-ago quarter's reported figure and missed the consensus mark. The company is lowering its fiscal 2025 revenue and earnings outlook to reflect the current weaker consumer environment. That said, it is effectively managing its costs and inventories while still supporting business growth through investments in marketing, new stores and infrastructure. The acquisi ...

Guess (GES) came out with quarterly earnings of $0.42 per share, missing the Zacks Consensus Estimate of $0.44 per share. This compares to earnings of $0.72 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -4.55%. A quarter ago, it was expected that this clothing company would post a loss of $0.39 per share when it actually produced a loss of $0.27, delivering a surprise of 30.77%. Over the last four quarters, the company has s ...

Financial Performance - Revenues for Q2 FY2025 increased to $733 million, up 10% in U.S. dollars and 13% in constant currency compared to the prior year[1]. - GAAP net loss for Q2 FY2025 was $10.6 million, resulting in a GAAP loss per share of $0.28, compared to GAAP net earnings of $39.0 million and EPS of $0.59 in the same prior-year quarter[6][7]. - Adjusted net earnings for Q2 FY2025 were $23.0 million, a 42% decrease from $39.7 million in the same prior-year quarter, with adjusted EPS decreasing to $0.42 from $0.72[7]. - The Company expects revenue growth for the full fiscal year 2025 to be between 9.5% and 11.0% in U.S. dollars, with GAAP EPS projected between $1.92 and $2.14[1][2]. - Adjusted earnings from operations for Q2 FY2025 decreased 41.6% to $37.9 million, with adjusted operating margin falling to 5.2% from 9.8% in the same prior-year quarter[10][11]. - The Company expects consolidated net revenue to increase between 14.5% and 16.5% for the third quarter of fiscal 2025 and between 9.5% and 11.0% for the full fiscal year 2025[24]. - GAAP diluted EPS is projected to be between $0.28 and $0.38 for the third quarter and between $1.92 and $2.14 for the full fiscal year 2025[24]. - Adjusted diluted EPS is expected to range from $0.33 to $0.45 for the third quarter and from $2.42 to $2.70 for the full fiscal year 2025[26]. - The effective income tax rate for the three months ended August 3, 2024, was 373.9%, significantly higher than 26.5% in the same period last year[42]. - Adjusted net earnings attributable to Guess?, Inc. for the three months ended August 3, 2024, were $22,950,000, a decrease of 42.3% from $39,712,000 in the same period last year[43]. Revenue Breakdown - Americas Wholesale revenues surged by 93% in U.S. dollars and 94% in constant currency during Q2 FY2025[8]. - Europe revenues increased by 5% in U.S. dollars and 8% in constant currency, while Asia revenues decreased by 8% in U.S. dollars and 4% in constant currency[8][9]. - Product sales for the three months ended August 3, 2024, reached $703,460,000, a 10.5% increase from $636,496,000 for the same period last year[42]. - Net revenue for the six months ended August 3, 2024, was $1,324,503,000, compared to $1,234,310,000 for the same period last year, reflecting a 7.3% increase[42]. - Total net revenue for the three months ended August 3, 2024, was $732,560,000, representing a 10% increase compared to $664,512,000 for the same period last year[49]. - The company’s total net revenue for the six months ended August 3, 2024, was $1,324,503,000, a 7% increase from $1,234,310,000 in the prior year[51]. Expenses and Margins - Operating margin for Q2 FY2025 decreased to 6.5%, down from 9.7% in the same prior-year quarter, primarily due to higher expenses and the impact of newly acquired businesses[10]. - Adjusted earnings from operations for the three months ended August 3, 2024, were $37,943,000, down from $64,992,000 in the same period last year[42]. - Selling, general and administrative expenses increased to $282,951,000, representing 38.7% of net revenue for the three months ended August 3, 2024[42]. - The company experienced a 32% increase in corporate overhead costs, totaling $45,707,000 compared to $34,546,000 in the previous year[49]. - Total lease costs (excluding finance lease costs) increased to $171,730,000 for the six months ended August 3, 2024, compared to $154,507,000 for the same period last year, reflecting an increase of 11%[55]. Acquisitions and Strategic Moves - The Company completed the acquisition of rag & bone on April 2, 2024, integrating it into existing segments and planning to accelerate store openings domestically and internationally[4][5]. - The Company acquired all operating assets and a 50% interest in the intellectual property assets of rag & bone on April 2, 2024, expanding its market presence[36]. - The company has excluded certain costs related to the rag & bone acquisition and other operational transitions from its fiscal 2025 outlook, indicating a focus on core business performance[62]. Cash Flow and Dividends - The Company anticipates free cash flow of $100 million for fiscal 2025, after accounting for $200 million in net cash provided by operating activities and $100 million in capital expenditures[27]. - A quarterly cash dividend of $0.30 per share has been approved, payable on September 27, 2024[28]. - The company reported a total asset value of $2,776,645,000 as of August 3, 2024, an increase from $2,590,021,000 in February 2024[53]. - Cash and cash equivalents decreased to $218,856,000 from $360,285,000 in February 2024[53]. - Net cash provided by operating activities for the six months ended August 3, 2024, was $21,734,000, a decrease of 54% compared to $47,273,000 for the six months ended July 29, 2023[55]. - Free cash flow for the six months ended August 3, 2024, was $(22,960,000), compared to $9,075,000 for the six months ended July 29, 2023[56]. Risks and Forward-Looking Statements - Forward-looking statements indicate potential risks including changes in consumer confidence, supply chain disruptions, and impacts from geopolitical events[37]. - The company anticipates that foreign currency exchange rates will remain stable at recently prevailing rates for the third quarter and full fiscal year 2025[62]. Store Operations - As of August 3, 2024, the Company operated 1,054 retail stores globally, with an additional 537 stores operated by partners and distributors[36]. - The company operated a total of 1,591 stores globally as of July 29, 2023, with 1,054 directly operated stores and 537 partner-operated concessions[58].

Guess? Inc. (GES) is likely to register top-line growth when it reports second-quarter fiscal 2025 earnings on Aug 28. The Zacks Consensus Estimate for revenues is pegged at $732 million, suggesting growth of 10.2% from the prior-year quarter's reported figure. However, the bottom line is likely to decline year-over-year in the quarter. The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at 44 cents per share. The projection indicates a decline of 38.9% from the fi ...