Guess(US:GES)2025-06-11 21:20Financial Performance - For the three months ended May 3, 2025, net revenue increased to $647.8 million, up 9.4% from $591.9 million for the same period in 2024[13] - Gross profit for the same period was $258.5 million, resulting in a gross margin of approximately 39.9%, compared to $248.1 million and a gross margin of 41.9% in the prior year[13] - The company reported a net loss of $31.2 million, or $(0.65) per share, compared to net earnings of $15.9 million, or $0.24 per share, in the prior year[13] - The company reported a total comprehensive loss of $6.6 million for the three months ended May 3, 2025, compared to a comprehensive income of $16.5 million in the prior year[15] - For the three months ended May 3, 2025, the company reported a net loss of $31,239 thousand compared to a net earnings of $15,906 thousand for the same period in 2024, representing a significant decline[18] - The company reported net revenue of $647.8 million for the three months ended May 3, 2025, with product sales contributing $622.8 million[90] - The company reported a net income of $10 million for the quarter, compared to a net loss of $2 million in the same quarter last year[1] Assets and Liabilities - Total assets as of May 3, 2025, were $2.86 billion, an increase from $2.77 billion as of February 1, 2025[12] - Current liabilities decreased to $780.0 million from $831.3 million in the previous quarter[12] - The company’s inventories rose to $638.2 million, up 13.4% from $562.6 million in the previous quarter[12] - Cash and cash equivalents decreased to $151.2 million from $187.7 million in the previous quarter[12] - As of May 3, 2025, the company's cash and cash equivalents totaled $151.2 million, down from $241.7 million as of May 4, 2024, indicating a decrease of approximately 37.5%[34] - The company recorded a vendor consideration liability of $46.5 million related to the rag & bone acquisition, which will be amortized over five years[53] Operational Performance - Selling, general and administrative expenses increased to $286.5 million, compared to $266.8 million in the same period last year[13] - The company experienced a loss from operations of $33.3 million, compared to a loss of $19.9 million in the prior year[13] - Cash flows used in operating activities totaled $73,412 thousand for the three months ended May 3, 2025, compared to $22,921 thousand for the same period in 2024, indicating increased cash outflow[18] - The company experienced a notable increase in accounts receivable, which rose by $44,497 thousand to $84,513 thousand compared to $40,016 thousand in the prior year[18] - The company incurred total advertising expenses of $19.9 million during the three months ended May 4, 2024, compared to $25.3 million in the same period of the following year, reflecting a strategic reduction in marketing costs[93] Acquisitions and Investments - The company acquired all operating assets and a 50% interest in the intellectual property assets of the fashion brand rag & bone on April 2, 2024, expanding its market presence[25] - The company completed the acquisition of rag & bone for approximately $57.1 million, with potential earnout consideration of up to $12.8 million based on sales and EBITDA performance[48] - The total assets acquired from rag & bone amounted to $202.3 million, while total liabilities assumed were $96.8 million, resulting in a net asset value of $105.6 million[50] - The company incurred $5.6 million in transaction-related costs for the rag & bone acquisition during the three months ended May 4, 2024[54] Market and Growth Strategies - Market expansion efforts have led to a 25% increase in sales in the Asia-Pacific region[1] - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential mergers and acquisitions[1] - New product launches are expected to contribute an additional $50 million in revenue for the upcoming quarter[1] - The company provided an optimistic outlook for the next quarter, projecting a revenue increase of 10% to 12%[1] Cost Management and Efficiency - The gross margin improved to 45%, up from 42% in the previous year, indicating better cost management[1] - Operating expenses increased by 5% due to higher marketing costs associated with new product launches[1] - The company reported depreciation and amortization expenses of $17,826 thousand for the three months ended May 3, 2025, compared to $16,379 thousand in the same period of 2024[18] Shareholder Returns - The Company authorized a $200 million share repurchase program on March 25, 2024, with remaining authority to purchase approximately $139.8 million of its common stock as of May 3, 2025[73][74] - A special cash dividend of $2.25 per share was announced on March 20, 2024, in addition to a quarterly cash dividend of $0.30 per share[75] - The Company announced a regular quarterly cash dividend of $0.30 per share, to be paid on July 3, 2025, to shareholders of record as of June 18, 2025[200] Debt and Financing - The Company recorded a loss of $7.8 million from foreign exchange currency contracts not designated as hedging instruments during the three months ended May 3, 2025[199] - The 2023 Credit Facility was amended to increase the borrowing capacity from $150 million to $200 million, providing additional liquidity for operational needs[100] - The Company had $41.8 million in aggregate accruals for uncertain income tax positions as of May 3, 2025, up from $40.3 million as of February 1, 2025[84] Employee Compensation and Benefits - Share-based compensation expense for the three months ended May 3, 2025, totaled $5.526 million, compared to $4.691 million for the same period in 2024[133] - The Company has approximately $38.6 million of unrecognized compensation cost related to nonvested stock awards/units expected to be recognized over a weighted average period of two years[133] Risk Management - The Company continues to monitor macroeconomic conditions, including inflation and consumer spending declines, which are negatively impacting its business operations[30] - The Company has entered into interest rate swap agreements to convert floating-rate debt to fixed-rate, aiming to reduce variability in cash flows associated with interest payments[192]