Guess(GES) - 2025 Q3 - Quarterly Results

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].