Guess? Q4 Earnings on Deck: Key Factors You Should Understand

Core Viewpoint - Guess?, Inc. is expected to report a decline in earnings for the fourth quarter of fiscal 2025, with a consensus estimate of $1.41 per share, reflecting a 29.9% decrease year-over-year [1]. Financial Performance - The consensus estimate for quarterly revenues is$ 899 million, indicating a 0.9% growth from the previous year [2]. - For fiscal 2025, the revenue consensus is projected at $2.96 billion, representing a 6.7% year-over-year increase [2]. - Adjusted earnings per share (EPS) for the fourth quarter is forecasted to be between$ 1.37 and $1.52, with an expected adjusted operating margin of 12.2% to 13% [5]. Market Conditions - The company is facing a challenging consumer environment influenced by changing purchasing behaviors, economic pressures, and regional disparities [3]. - Macroeconomic factors such as inflation and economic uncertainty are leading consumers to prioritize value-driven purchases, which is expected to negatively impact consumer sentiment and traffic, particularly in North America and Asia [3]. Operational Challenges - Rising freight costs are a significant challenge for Guess?, with an anticipated additional$ 5 million in freight-related expenses for the fourth quarter, which will further squeeze margins [4]. - Increased shipping charges and air freight usage are expected to particularly affect the European business, a key revenue contributor [4]. Strategic Positioning - Despite challenges, Guess? is strategically positioned with an expanding product portfolio, growing direct-to-consumer channels, and effective cost management [6]. - The company anticipates revenue growth in the range of 2.2% to 5.4% for the fourth quarter of fiscal 2025, supported by positive results from wholesale operations in Europe and the Americas [6]. Earnings Prediction - The current model does not predict an earnings beat for Guess?, as it holds a Zacks Rank of 4 (Sell) and an Earnings ESP of 0.00% [7].