Guess(US:GES)2024-08-28 20:16Financial 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].