Guess Jeans

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Guess(GES) - 2026 Q1 - Earnings Call Transcript
2025-06-05 21:47
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]
Guess(GES) - 2025 Q4 - Earnings Call Transcript
2025-04-03 20:45
Financial Data and Key Metrics Changes - In Q4, revenues increased by 5% to $932 million, with an adjusted growth of 14% when accounting for currency and last year's extra week [12][53] - For the full year, revenues grew by 8% in U.S. dollars to $3 billion, and by 10% in constant currency [21] - Adjusted earnings per share (EPS) for Q4 was $1.48, down from $2.01 in the previous year [66] Business Line Data and Key Metrics Changes - The Rag & Bone acquisition contributed 9 points to the 14% growth, while the core guest business added 5 points [12] - The licensing business grew by 18% in Q4, driven by strong performance in footwear, fragrances, handbags, and eyewear [15][61] - The Americas retail business saw a 14% constant currency comp decline, while the European retail business had a 5% constant currency comp increase [15][56] Market Data and Key Metrics Changes - In Europe, revenues grew by 2% to $494 million, with a constant currency growth of 13% [53] - Asia revenues decreased by 15% to $70 million, with a constant currency decline of 4% [60] - The U.S. and Canadian guest stores experienced a 14% comp decline, while e-commerce in the region also faced challenges [15][56] Company Strategy and Development Direction - The company aims to strengthen brand awareness and customer engagement, focusing on improving retail store and e-commerce productivity [22][51] - Plans include optimizing the business model, enhancing product offerings, and expanding into new markets such as India and the Middle East [22][43] - The company is exploring the integration of its infrastructures across different regions to improve cost structure and profitability [36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as inflationary pressures, traffic declines in retail stores, and the impact of the U.S. dollar on revenues and margins [10][70] - For fiscal year 2026, the company expects revenue growth between 3.9% and 6.2%, with adjusted operating margins between 4.5% and 5.4% [47][79] - Management remains optimistic about growth opportunities, particularly with the Rag & Bone brand and the new Guess Jeans initiative [44][120] Other Important Information - The company plans to close approximately 20 non-strategic stores in North America by the end of the year [39][76] - A new Chief Financial Officer, Alberto Toni, will join the company in June, bringing extensive experience [24] - The company ended the quarter with $563 million in inventory, a 21% increase, largely due to the Rag & Bone acquisition [66] Q&A Session Summary Question: What are the drivers for Rag & Bone's growth? - Management expressed excitement about the Rag & Bone acquisition, highlighting strong e-commerce performance and plans for new store openings in Europe and North America [90][92] Question: What is the strategy for the Americas business? - Management discussed plans to improve retail productivity through exclusive product collections and a speed-to-market model to capitalize on current trends [100][102] Question: What opportunities exist for Guess Jeans? - Management noted strong initial performance in Europe and plans for expansion in the U.S. and Japan, emphasizing the brand's alignment with younger consumers [120][129]