Financial Data and Key Metrics Changes - The company reported a revenue growth of 13%, reaching $739 million, slightly below expectations due to a stronger US dollar [6][32] - Adjusted earnings per share (EPS) for the quarter was $0.34, compared to $0.49 in the same quarter last year [42] - Total company gross margin was 43.6%, which is 110 basis points lower than the previous year [39] Business Line Data and Key Metrics Changes - The core Guess business saw low single-digit revenue growth, while the Americas wholesale business increased by approximately 79% due to the addition of Rag & Bone [34][36] - European wholesale revenue grew by 7% in US dollars, with retail comps increasing by 8% [34] - The licensing segment's revenues were flat, despite internalizing outerwear [38] Market Data and Key Metrics Changes - In Europe, retail comps increased by 5% in constant currency, while in Asia, retail comps decreased by 16% [35][38] - The Americas retail business experienced a 14% constant currency comp decline, with an operating loss margin of 4.3% [36] - The company faced challenges in North America and Asia, with traffic headwinds impacting sales [48] Company Strategy and Development Direction - The company is focused on leveraging its platform to support the expansion of multiple brands, including Rag & Bone and Guess Jeans [17][29] - There is an emphasis on enhancing marketing capabilities and customer engagement to improve brand relevance [24][25] - The company is reevaluating pricing strategies in response to consumer sentiment and competitive pressures [9][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of a stronger US dollar and inflation on consumer behavior, leading to adjustments in revenue expectations for the fourth quarter [15][50] - The company is optimistic about long-term growth opportunities, particularly with Rag & Bone and the Guess Jeans brand [31][62] - Management highlighted the importance of adapting to market conditions and consumer preferences to reclaim brand strength in North America [30][78] Other Important Information - The company increased marketing and advertising investments by approximately 85% compared to the previous year [12] - Inventory levels rose by 20% year-over-year, influenced by the acquisition of Rag & Bone [43] - The company expects full-year revenues to be slightly below $3 billion, with growth between 7% and 8% [15][51] Q&A Session Summary Question: Insights on Q4 revenue growth and operating margin opportunities - Management noted that early shipments in Europe contributed about $10 million to Q3 revenue, which would impact Q4 [58] - They expressed confidence in achieving double-digit operating margins in the long term despite current challenges [62] Question: Shift to a universal product offering and its impact - Management confirmed the success of the global product line in Europe but acknowledged challenges in the US market [75][76] - They emphasized ongoing efforts to elevate the brand and improve customer engagement through targeted marketing [79][80] Question: Response to potential tariff increases - The company is actively reducing dependency on China and exploring alternative sourcing options to mitigate tariff impacts [86]

Core Insights - Guess?, Inc. (GES) reported third-quarter fiscal 2025 results with both revenue and earnings falling short of Zacks Consensus Estimates, and earnings declined year over year [1][2][3] Financial Performance - Adjusted earnings per share (EPS) were 34 cents, missing the consensus estimate of 43 cents and representing a 31% decline year over year [3] - Net revenues reached $738.5 million, a 13% increase year over year, but below the consensus mark of $751 million; on a constant-currency basis, revenues rose 14% [5] - Gross margin decreased to 43.6% from 44.7% in the prior year, while selling, general and administrative (SG&A) expenses increased to 37.8% from 36% [6] Segment Performance - Americas Retail segment revenues increased by 12% in U.S. dollars and 14% at constant currency, but retail comparable sales declined by 14% in U.S. dollars and 12% at constant currency [8] - Americas Wholesale revenues surged by 79% on a reported basis and 83% at constant currency, although the operating margin decreased to 25.7% [9] - Europe segment revenues grew by 7% on a reported basis, with retail comparable sales increasing by 8% [10] - Asia revenues rose by 2%, but retail comparable sales fell by 17% [11] - Licensing revenues remained flat, with an operating margin of 91.8% [12] Financial Health - The company ended the quarter with cash and cash equivalents of $140.9 million and long-term debt of approximately $238.3 million [13] - Free cash flow for the nine months ended November 2, 2024, was negative $130.4 million, with expectations of $40 million for fiscal 2025 [13][14] Future Outlook - For fiscal 2025, GES expects revenues to be at or slightly below $3 billion, indicating growth of 7.1% to 8.1%, revised down from 9.5% to 11% [15] - Adjusted EPS is forecasted to be between $1.85 and $2, down from a previous range of $2.42 to $2.70 [16] - For the fourth quarter of fiscal 2025, revenue growth is anticipated in the range of 2.2% to 5.4%, with adjusted EPS expected between $1.37 and $1.52 [17]

Group 1 - Guess?, Inc. (NYSE: GES) shares have declined by 20% over the past year due to a sluggish consumer environment [1] - The company's disappointing Q3 results are not expected to improve its performance [1]

Core Viewpoint - Guess (GES) reported quarterly earnings of $0.34 per share, missing the Zacks Consensus Estimate of $0.43 per share, representing a -20.93% earnings surprise [1] - The company posted revenues of $738.52 million for the quarter ended October 2024, missing the Zacks Consensus Estimate by 1.66% [2] Financial Performance - Earnings per share decreased from $0.49 a year ago to $0.34 this quarter [1] - Revenues increased from $651.17 million a year ago to $738.52 million this quarter [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Guess shares have lost approximately 21.8% since the beginning of the year, contrasting with the S&P 500's gain of 25.5% [4] - The current Zacks Rank for Guess is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the coming quarter is $2.04 on revenues of $989.5 million, and for the current fiscal year, it is $2.63 on revenues of $3.06 billion [8] - The estimate revisions trend for Guess is mixed, and future earnings expectations will depend on management's commentary during the earnings call [3][5] Industry Context - The Textile - Apparel industry, to which Guess belongs, is currently in the top 20% of over 250 Zacks industries, indicating a favorable outlook [9] - Another company in the same industry, Oxford Industries (OXM), is expected to report a significant decline in earnings, with a consensus EPS estimate of $0.11, representing a year-over-year change of -89.1% [10][11]

Financial Performance - Revenues for the third quarter of fiscal 2025 increased to $739 million, up 13% in U.S. dollars and 14% in constant currency[2]. - GAAP net loss for the third quarter was $23.4 million, with a GAAP loss per share of $0.47, compared to GAAP net earnings of $55.7 million and EPS of $0.82 in the same prior-year quarter[7]. - Adjusted net earnings decreased 35% to $17.7 million, with adjusted diluted EPS of $0.34, down 31% from $0.49 in the same prior-year quarter[8]. - The Company expects consolidated net revenue for the fourth quarter of fiscal 2025 to increase between 2.2% and 5.4%, and for the full fiscal year 2025 to increase between 7.1% and 8.1%[41]. - GAAP diluted EPS for the fourth quarter of fiscal 2025 is projected to be between $1.10 and $1.22, while for the full fiscal year 2025, it is expected to be between $0.70 and $0.82[41]. - The adjusted diluted EPS outlook for the fourth quarter of fiscal 2025 is between $1.37 and $1.52, and for the full fiscal year 2025, it is between $1.85 and $2.00[43]. - The Company anticipates free cash flow for the full fiscal year 2025 to be approximately $135 million[44]. - The Company reported a total net revenue of $2.06 billion for the nine months ended October 28, 2023, a 9% increase from $1.89 billion in the same period last year[76]. Revenue Segments - Americas Wholesale revenues increased 79% in U.S. dollars and 83% in constant currency for the third quarter[12]. - Europe revenues increased 7% in U.S. dollars and 6% in constant currency, with retail comparable sales up 8% in U.S. dollars[10]. - Licensing segment revenues remained flat, while Asia revenues increased 2% in both U.S. dollars and constant currency[12][13]. - The Americas Retail segment experienced a 12% revenue growth, reaching $172.8 million, up from $153.9 million year-over-year[73]. - Europe segment revenue increased by 7% to $368.4 million for the three months ended October 28, 2023, compared to $344.5 million in the prior year[76]. Expenses and Margins - GAAP operating margin decreased to 5.7% from 8.4% in the same prior-year quarter, driven by higher expenses and unfavorable channel mix[14]. - Gross profit margin decreased to 43.6% in Q3 2024 from 44.7% in Q3 2023, with gross profit amounting to $321,877,000[63]. - Selling, general and administrative expenses rose to $279,389,000, representing 37.8% of net revenue, compared to 36.0% in the prior year[63]. - Total cost of product sales increased to $416,641,000, representing 56.4% of net revenue, compared to 55.3% in the prior year[63]. - The adjusted operating margin for the total company was 5.8% for the three months ended October 28, 2023, down from 8.9% in the prior year[73]. Shareholder Actions - The Board of Directors approved a quarterly cash dividend of $0.30 per share, payable on December 27, 2024[45]. - The Company repurchased approximately 2.6 million shares for $60.3 million during the nine months ended November 2, 2024, leaving a capacity of $139.8 million under the share repurchase program[47]. Acquisitions and Market Presence - The rag & bone acquisition completed on April 2, 2024, integrated into existing segments, contributing to revenue growth[6]. - 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[54]. - As of November 2, 2024, the Company operated 1,057 retail stores directly and an additional 541 stores through partners and distributors worldwide[54]. Future Outlook - The company expects current consumer sentiment and slow customer traffic in North America and Asia to persist, negatively impacting fourth quarter performance[3]. - The company anticipates that foreign currency exchange rates will remain at recently prevailing rates for the fourth quarter and full fiscal year 2025[89]. - The outlook for fiscal 2025 excludes certain costs related to professional services, transaction costs from the rag & bone acquisition, and asset impairment charges[90]. Tax and Other Financial Metrics - The company reported an effective income tax rate of 36.6% for the current quarter, compared to 30.9% in the same quarter last year[64]. - The adjusted effective income tax rate for the nine months ended October 28, 2023, was 35.7%, compared to 28.8% for the same period last year[67]. - The company incurred $1,091,000 in asset impairment charges for the three months ended October 28, 2023[67]. - The company reported a loss on extinguishment of debt of $1,952,000 for the nine months ended October 28, 2023[67]. Cash Flow and Assets - Cash and cash equivalents decreased to $140.9 million from $244.1 million year-over-year[79]. - Net cash provided by (used in) operating activities for the nine months ended November 2, 2024, was $(61,555) thousand, compared to $40,881 thousand for the nine months ended October 28, 2023[82]. - Free cash flow for the nine months ended November 2, 2024, was $(130,391) thousand, a significant decrease from $(16,486) thousand for the same period last year[82]. - Total assets increased to $2.79 billion as of November 2, 2024, compared to $2.48 billion as of October 28, 2023[79].

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]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Company Summaries Kohl's Corporation (KSS) - Dividend Yield: 9.66% - JP Morgan analyst Matthew Boss downgraded the stock from Neutral to Underweight with a price target of $19 on Aug. 29, with an accuracy rate of 68% [3] - Evercore ISI Group analyst Michael Binetti maintained an In-Line rating and reduced the price target from $22 to $20 on Aug. 29, with an accuracy rate of 62% [3] - Recent News: Kohl's reported better-than-expected second-quarter financial results on Aug. 28 [3] Guess?, Inc. (GES) - Dividend Yield: 6.09% - Small Cap Consumer Research analyst Eric Beder reiterated a Buy rating with a price target of $29 on Oct. 1, with an accuracy rate of 64% [4] - Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating and cut the price target from $26 to $21 on Aug. 29, with an accuracy rate of 61% [4] - Recent News: Guess? reported worse-than-expected second-quarter adjusted EPS results and lowered its FY25 adjusted EPS guidance below estimates on Aug. 28 [4] The Wendy's Company (WEN) - Dividend Yield: 5.66% - JP Morgan analyst John Ivankoe maintained a Neutral rating and raised the price target from $20 to $22 on Sept. 16, with an accuracy rate of 75% [5] - TD Cowen analyst Andrew Charles reiterated a Hold rating with a price target of $17 on Sept. 9, with an accuracy rate of 80% [5] - Recent News: The Wendy's Company announced executive leadership appointments on Sept. 16 [5]