Guess(US:GES)2025-11-25 21:16Financial Performance - Total net revenue for Q3 FY2026 increased 7% to $791 million from $738.5 million in the same prior-year quarter, with a 5% increase in constant currency[8]. - GAAP net earnings for Q3 FY2026 were $25.6 million, compared to a GAAP net loss of $23.4 million for the same prior-year quarter[5]. - Adjusted net earnings for Q3 FY2026 were $19.0 million, an 8% increase from $17.7 million for the same prior-year quarter, with adjusted diluted EPS increasing 3% to $0.35[7]. - For the nine months ended November 1, 2025, total net revenue increased 7% to $2.21 billion from $2.06 billion in the same prior-year period[16]. - Net revenue for the nine months ended November 1, 2025, was $2.21 billion, up 7.2% from $2.06 billion in the prior year[38]. - Total net revenue for the three months ended November 1, 2025, was $791,427, a 7% increase from $738,518 in the same period last year[47]. Margins and Expenses - GAAP operating margin for Q3 FY2026 decreased to 2.9%, down from 5.7% in the same prior-year quarter, primarily due to higher expenses[9]. - Adjusted operating margin for the nine months ended November 1, 2025 decreased to 1.8%, down from 3.5% in the same prior-year period[20]. - Selling, general and administrative expenses increased to $904.15 million, representing 40.8% of net revenue for the nine months ended November 1, 2025[38]. - Total selling, general and administrative expenses for the three months ended November 1, 2025, were $309,026, an increase of 10.6% from $279,389 in the same period last year[42]. - Corporate overhead increased by 39% to $(50,946) for the three months ended November 1, 2025[47]. Acquisitions and Transactions - The proposed take-private transaction with Authentic Brands Group involves Authentic acquiring 51% of the company's intellectual property, with shareholders receiving $16.75 per share in cash[2]. - The proposed transaction is expected to close in Q4 FY2026, pending regulatory approvals[3]. - The Company completed the acquisition of rag & bone on April 2, 2024, acquiring all operating assets and assuming related liabilities, with a joint venture for intellectual property[24]. - The company incurred $5,607 in proposed transaction costs for the three months ended Nov 1, 2025, compared to no costs in the same period last year[42]. - The company has incurred transaction costs related to the acquisition of rag & bone, which are excluded from adjusted results[60]. Cash Flow and Assets - Free cash flows are calculated as cash flows from operating activities minus purchases of property and equipment, providing insight into cash generation for discretionary items[30]. - Cash and cash equivalents at the end of the period were $155,056, compared to $142,322 at the end of the previous year[53]. - The total assets of the company as of November 1, 2025, amounted to $3,006,496, up from $2,794,661 a year earlier[51]. - Free cash flow for the nine months ended November 1, 2025, was $(103,308), an improvement from $(130,391) in the previous year[55]. Store Operations - As of November 1, 2025, the Company operated 1,058 retail stores directly and an additional 507 stores through partners and distributors across approximately 100 countries[31]. - As of November 1, 2025, the total number of stores operated by the company is 1,565, with 1,058 directly operated and 507 partner-operated stores[57]. - The Americas region has a total of 430 stores, with 414 directly operated and 16 partner-operated[57]. - In Europe and the Middle East, there are 781 total stores, with 587 directly operated and 194 partner-operated[57]. - The Asia and Pacific region has 354 total stores, with 57 directly operated and 297 partner-operated[57]. - The company is undergoing restructuring, including planned exits of certain retail stores in North America and Greater China[60]. Risks and Forward-Looking Statements - Forward-looking statements regarding the Proposed Transaction highlight potential risks, including regulatory approvals and business relationship impacts[32][33]. - The Company is subject to various risks, including changes in tax policy, economic conditions, and cybersecurity threats, which may affect future performance[34]. Earnings and Tax Rates - The effective income tax rate for the three months ended November 1, 2025, was 23.4%, compared to an effective tax rate of (128.9%) in the same period last year[38]. - Adjusted effective income tax rate for the nine months ended November 1, 2025, was 49.3%, compared to 35.7% in the prior year[42]. Other Financial Metrics - Other income for Q3 FY2026 was $21.2 million, compared to other expense of $45.8 million for the same prior-year quarter, primarily due to a net unrealized gain of $17.9 million[13]. - Product sales for the three months ended November 1, 2025, reached $760.32 million, a 7.8% increase from $705.51 million in the same period last year[38]. - Gross profit margin decreased to 41.7% for the nine months ended November 1, 2025, compared to 43.1% in the same period last year[38]. - Earnings from operations decreased by 45% to $23,183 compared to $42,276 in the prior year[47]. - The Americas Wholesale segment experienced a significant growth of 28% in net revenue, reaching $126,147[47]. - The Americas Retail segment reported a 2% decrease in net revenue, totaling $170,037[47].