Core Viewpoint - Kaskela Law LLC has initiated an investigation into the fairness of the proposed buyout of Guess? Inc. by WHP Global, focusing on whether the buyout price adequately reflects the value of the company's shares [1][3]. Buyout Proposal Details - On March 17, 2025, Guess? announced a buyout proposal from WHP Global to acquire unaffiliated shareholders at a price of $13.00 per share [2]. - The proposed buyout price of $13.00 per share is significantly lower than Guess?'s 52-week high of over $33.00 per share and below analyst price targets exceeding $18.00 per share [3]. Investigation Purpose - The investigation aims to assess if the proposed buyout price is fair for unaffiliated Guess? shareholders and whether it represents sufficient monetary consideration for GES shares [3]. Shareholder Communication - Guess? shareholders are encouraged to contact Kaskela Law LLC for more information regarding the investigation and their legal rights [4].

Core Viewpoint - Guess?, Inc. is expected to report a decline in earnings for the fourth quarter of fiscal 2025, with a consensus estimate of $1.41 per share, reflecting a 29.9% decrease year-over-year [1]. Financial Performance - The consensus estimate for quarterly revenues is $899 million, indicating a 0.9% growth from the previous year [2]. - For fiscal 2025, the revenue consensus is projected at $2.96 billion, representing a 6.7% year-over-year increase [2]. - Adjusted earnings per share (EPS) for the fourth quarter is forecasted to be between $1.37 and $1.52, with an expected adjusted operating margin of 12.2% to 13% [5]. Market Conditions - The company is facing a challenging consumer environment influenced by changing purchasing behaviors, economic pressures, and regional disparities [3]. - Macroeconomic factors such as inflation and economic uncertainty are leading consumers to prioritize value-driven purchases, which is expected to negatively impact consumer sentiment and traffic, particularly in North America and Asia [3]. Operational Challenges - Rising freight costs are a significant challenge for Guess?, with an anticipated additional $5 million in freight-related expenses for the fourth quarter, which will further squeeze margins [4]. - Increased shipping charges and air freight usage are expected to particularly affect the European business, a key revenue contributor [4]. Strategic Positioning - Despite challenges, Guess? is strategically positioned with an expanding product portfolio, growing direct-to-consumer channels, and effective cost management [6]. - The company anticipates revenue growth in the range of 2.2% to 5.4% for the fourth quarter of fiscal 2025, supported by positive results from wholesale operations in Europe and the Americas [6]. Earnings Prediction - The current model does not predict an earnings beat for Guess?, as it holds a Zacks Rank of 4 (Sell) and an Earnings ESP of 0.00% [7].

Core Viewpoint - Guess (GES) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending January 2025, with the actual results being crucial for its near-term stock price movement [1][2]. Earnings Expectations - The consensus estimate for Guess's quarterly earnings is $1.41 per share, reflecting a year-over-year decrease of 29.9%. Revenues are projected to be $926 million, which is a 3.9% increase from the previous year [3]. - The consensus EPS estimate has been revised down by 62.16% over the last 30 days, indicating a significant reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Guess is the same as the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%. This suggests no recent differing analyst views [10]. - The current Zacks Rank for Guess is 4 (Sell), complicating the prediction of an earnings beat [11]. Historical Performance - In the last reported quarter, Guess was expected to post earnings of $0.43 per share but only achieved $0.34, resulting in a surprise of -20.93%. Over the last four quarters, the company has beaten consensus EPS estimates twice [12][13]. Industry Comparison - PVH (PVH), another player in the Zacks Textile - Apparel industry, is expected to report earnings of $3.19 per share for the same quarter, indicating a year-over-year decline of 14.3%. Revenues are expected to be $2.34 billion, down 6.1% from the previous year [17]. - The consensus EPS estimate for PVH has been revised down by 4.5% over the last 30 days, with an Earnings ESP of -0.52% and a Zacks Rank of 4 (Sell), making it difficult to predict an earnings beat [18].

Core Viewpoint - Kaskela Law LLC is investigating the fairness of the proposed buyout of Guess?, Inc. by WHP Global, focusing on whether the buyout price adequately compensates shareholders [1][3]. Group 1: Buyout Proposal Details - On March 17, 2025, Guess? announced a buyout proposal from WHP Global at a price of $13.00 per share for unaffiliated shareholders [2]. - The proposed buyout price of $13.00 per share is significantly lower than Guess?'s 52-week high of over $33.00 per share [3]. - The proposed buyout price is also below analyst price targets for Guess? shares, which exceed $18.00 per share [3]. Group 2: Investigation Purpose - The investigation aims to assess whether the proposed buyout price fairly compensates Guess? shareholders who are not affiliated with WHP Global [3].

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company focuses on medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - Proactive's news team delivers insights across various sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and improve content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Group 1 - Guess? Inc. (GES) is an American apparel retailer founded in 1981 and became publicly traded in 1996 [1] - The article discusses the share price performance of Guess? Inc. since its IPO [1] Group 2 - The analyst expresses a focus on investing at the intersection of value and growth, particularly in small-cap stocks [1] - The investment strategy includes looking for long-term compounders and special situations [1]

Group 1 - The article emphasizes the investment philosophy focused on small cap companies, highlighting the importance of identifying mispriced securities through understanding financial drivers and utilizing DCF model valuation [1] - The methodology allows for a flexible approach to investing, not confined to traditional categories such as value, dividend, or growth investing, but rather assessing all prospects of a stock to evaluate risk-to-reward [1] Group 2 - There is a potential interest in initiating a long position in GES within the next 72 hours, indicating a strategic move based on the analysis presented [2] - The article expresses personal opinions of the author without any compensation from companies mentioned, ensuring an unbiased perspective [2]

Core Viewpoint - Guess?, Inc. is facing significant challenges in its operating environment, particularly in North America and Asia, leading to a notable decline in stock performance and revised financial projections [1][8]. Financial Performance - In the third quarter, comparable sales in North America fell by 15%, while in Asia, constant currency comparable sales dropped by 16%, primarily due to weak demand in key markets like China and South Korea [2]. - The company's gross margin contracted by 110 basis points to 43.6%, and SG&A expenses increased by 180 basis points to 37.8% of sales, resulting in an adjusted operating margin of 5.8%, down from 8.9% a year ago [5]. Cost Pressures - Freight costs have significantly impacted the company's operations, with an additional $5 million in freight-related expenses anticipated for the fourth quarter due to the Red Sea crisis [4]. - The company is experiencing pressure from rising marketing expenditures, occupancy costs, and an unfavorable channel mix, contributing to operational inefficiencies [5]. Revised Outlook - The company has lowered its fiscal 2025 revenue growth expectations to a range of 7.1% to 8.1%, down from a previous forecast of 9.5% to 11%, and adjusted earnings per share are now projected between $1.85 and $2, compared to the earlier range of $2.42 to $2.70 [8]. Strategic Initiatives - The acquisition of rag & bone has strengthened Guess?'s multi-brand portfolio, with plans for expansion into high-potential markets such as Europe, the Middle East, and Canada [9]. - The wholesale business in the Americas has shown robust growth, with revenues surging 79% year over year in the third quarter, driven by internalizing the outerwear business [9]. Digital Strategy - The company is focusing on digital growth, evidenced by a 16% year-over-year increase in European e-commerce sales in the third quarter [10]. - A new loyalty program in Europe aims to enhance customer retention through cross-border point redemption and improved personalization efforts [10].

Acquisition and Integration - The acquisition of rag & bone was completed on April 2, 2024, integrating it into existing segments for financial reporting purposes[212]. - Inventory increased by $113.4 million, or 20.2%, to $675.8 million, primarily due to the rag & bone acquisition and higher in-transit inventory[258]. - Accounts receivable increased by $42.6 million, or 12.5%, to $383.4 million, driven by the rag & bone acquisition[259]. - Net revenue from the Americas Wholesale segment increased by $44 million, or 79%, driven mainly by the newly acquired rag & bone business[284]. - Gross profit increased by $31 million, driven by the impact of newly acquired businesses, including rag & bone[267]. Financial Performance - Net loss attributable to Guess?, Inc. was $23.4 million, or diluted net loss per share of $0.47, for the quarter ended November 2, 2024, compared to net earnings of $55.7 million, or diluted net earnings per share of $0.82, for the quarter ended October 28, 2023[247]. - Total net revenue increased 13.4% to $738.5 million for the quarter ended November 2, 2024, compared to $651.2 million in the same prior-year quarter[249]. - Gross margin decreased 110 basis points to 43.6% for the quarter ended November 2, 2024, compared to 44.7% in the same prior-year quarter[249]. - SG&A expenses increased 19.3% to $279.4 million for the quarter ended November 2, 2024, compared to $234.1 million in the same prior-year quarter[250]. - Operating margin decreased 270 basis points to 5.7% for the quarter ended November 2, 2024, compared to 8.4% in the same prior-year quarter[253]. Economic and Market Conditions - The ongoing wars in Ukraine and Gaza, along with macroeconomic conditions, are negatively impacting business operations[207]. - Inflationary pressures have impacted overall cost structure, including transportation, employee compensation, and raw materials, negatively affecting margins and expenses[218]. - Continued inflationary conditions could adversely impact consumer discretionary spending, negatively affecting sales and results[222]. - The average U.S. dollar rate was stronger against several currencies, negatively impacting the translation of international revenues and earnings for the nine months ended November 2, 2024[216]. - Currency fluctuations can significantly impact the translation of international revenues and earnings into U.S. dollars, affecting operating margins[214]. Operational Challenges - The company has experienced increased costs and transit times associated with deliveries related to operations in Russia due to sanctions and new procedures[227]. - The company continues to strategically manage expenses to protect profitability amid supply chain disruptions, including the Red Sea crisis[208]. - The company continues to assess operations in Russia to ensure compliance with applicable sanctions, with no material impact on operations to date[228]. Shareholder Returns and Capital Management - The company plans to prioritize capital allocation toward investments that support growth and infrastructure while managing product buys and inventory ownership rigorously[237]. - A special cash dividend of $2.25 per share was announced on March 20, 2024, in addition to a regular quarterly cash dividend of $0.30 per share[348]. - The company repurchased 2.6 million shares at an aggregate cost of $60.8 million during the nine months ended November 2, 2024, under the 2024 Share Repurchase Program[353]. - The company plans to return value to shareholders through dividends and share repurchases while considering strategic acquisitions that leverage its global infrastructure[237]. Tax and Compliance - The effective income tax rate was an expense of 128.9% for the quarter ended November 2, 2024, compared to a benefit of 44.5% in the same prior-year quarter[254]. - The effective income tax rate was 355.1%, compared to a benefit of 6.3% in the prior year, primarily due to a net unrealized loss on derivatives[305]. - The company is monitoring the OECD Pillar 2 guidelines, which may affect its future tax rate starting in 2024[306]. Cash Flow and Liquidity - As of November 2, 2024, cash and cash equivalents decreased to $140.9 million from $244.1 million as of October 28, 2023[255]. - Net cash used in operating activities was $61.6 million for the nine months ended November 2, 2024, compared to net cash provided of $40.9 million for the same prior-year period, indicating a deterioration of $102.4 million[338]. - The company anticipates satisfying ongoing cash requirements for at least the next 12 months primarily through cash flow from operations and existing cash balances[333]. Strategic Focus and Future Plans - The company plans to focus on increasing productivity in existing markets and pursuing brand extensions and category expansions for revenue growth[233]. - The company aims to enhance customer experience through a seamless omni-channel strategy and expand its digital business[234]. - The company intends to operate with high efficiency and effectiveness, leveraging technology and data analytics to improve operations and decision-making[236]. - The company aims to design and extend its product offerings to better address local product needs and support various lifestyle occasions[235].

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]