Guess(GES)2024-12-06 21:55Acquisition 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 675.8 million, primarily due to the rag & bone acquisition and higher in-transit inventory[258]. - Accounts receivable increased by 383.4 million, driven by the rag & bone acquisition[259]. - Net revenue from the Americas Wholesale segment 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 0.47, for the quarter ended November 2, 2024, compared to net earnings of 0.82, for the quarter ended October 28, 2023[247]. - Total net revenue increased 13.4% 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 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 0.30 per share[348]. - The company repurchased 2.6 million shares at an aggregate cost of 140.9 million from 61.6 million for the nine months ended November 2, 2024, compared to net cash provided 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].