Financial Data and Key Metrics Changes - Total company revenues increased by 9% in U.S. dollars to $648 million, with a 12% increase in constant currency, primarily driven by the acquisition of Rag and Bone, which contributed nine points to constant currency growth [43][44] - Adjusted operating loss totaled $26 million, with an adjusted operating margin of -4%, reflecting a decline of 270 basis points compared to the previous year [51] - Adjusted diluted loss per share was $0.44, an increase from an adjusted loss per share of $0.27 in the prior year [51] Business Line Data and Key Metrics Changes - The core Guess business grew by 3% in constant currency, with wholesale businesses in Europe and The Americas offsetting negative comps from direct businesses [43][44] - In the Americas retail segment, revenues grew by 9% in U.S. dollars, reaching $157 million, driven primarily by the acquisition of Rag and Bone [46] - The European wholesale business posted mid-teen growth rates, while retail comps in Europe declined by 4% in U.S. dollars [9][44] Market Data and Key Metrics Changes - The Americas wholesale business saw a 63% increase in revenues in U.S. dollars, driven by Rag and Bone and higher shipments [48] - Revenues in Asia decreased by 20% in U.S. dollars, with significant declines in South Korea and China, where the company is constraining operations [49] - Licensing segment revenues declined by 14% to $25 million, with royalties from fragrances and footwear decreasing [50] Company Strategy and Development Direction - The company is focusing on improving retail productivity and brand awareness through increased marketing investments and a new customer loyalty program launched in Europe [19][20] - Strategic initiatives include enhancing supply chain capabilities, optimizing product assortments, and addressing pricing strategies to attract a broader customer base [21][22][23] - The company is examining its store portfolio to ensure each location serves a strategic purpose, with plans to close non-strategic stores in North America [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the integration of Rag and Bone and its contribution to growth, with expectations for the brand to exceed $320 million in revenue this year [65] - The company anticipates revenue growth for the full year in the range of 5.5% to 7.4%, driven by solid growth from European wholesale and the full-year impact of Rag and Bone [37][38] - Management acknowledged challenges in traffic and sales in Asia but remains committed to finding a partner to manage operations in that market [10][29] Other Important Information - The company ended the quarter with $638 million in inventory, a 15% increase in U.S. dollars, primarily to mitigate supply chain disruptions [52] - Capital expenditures for the quarter were $22 million, mainly for store remodels and technology investments [54] - The Board approved a regular quarterly cash dividend of $0.30 per share [55] Q&A Session Summary Question: Can you discuss the organic growth expectations for Rag and Bone? - Management expressed satisfaction with Rag and Bone's performance, expecting it to exceed $320 million in revenue this year, driven by strong wholesale and direct-to-consumer sales [63][65] Question: What is the outlook for the Americas retail business? - Management noted improvements in conversion rates and positive comps in women's apparel, despite ongoing traffic challenges [72][75] Question: How should investors think about inventory levels moving forward? - Management indicated that the current inventory increase is intentional to support business needs, with plans to streamline inventory levels once supply chain issues normalize [92][95]