The company’s diluted net loss per share stood at $0.47 in the quarter ending 2 November 2024, down from earnings per share of $0.82 in the prior year quarter.
Q3 FY25 operating results
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Despite the net loss, Guess saw its total net revenue for Q3 FY25 climb by 13% to $738.5m, up from $651.2m Q3 FY24.
When adjusted for constant currency, the revenue increase was 14%.
Revenue growth in Europe was modest at 7% in US dollars and 6% in constant currency, with retail comparable sales rising by 8% and 7%, respectively.
In the earnings call, Guess chief executive officer Carlos Alberini noted that accessories, women’s apparel, and footwear all delivered sales increases in Europe, while the company experienced declines in both men’s apparel and Marciano businesses.
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By GlobalDataNew products and a new capsule of women’s sweaters, outerwear, denim pants, activewear, and men’s sweaters contributed to the increase. These trending categories more than offset some continued softness in our dress business in the region.
In the Americas, retail revenues surged by 12% in US dollars and 14% in constant currency, although retail comparable sales saw a decline of 14% and 12%, respectively. Asia’s revenues showed a marginal increase of 2%. However, retail comparable sales in Asia dropped significantly by 17% in US dollars and 16% in constant currency.
The company’s earnings from operations for Q3 FY25 fell by 22.8% to $42.3m, which includes a $2.6m adverse effect due to currency translation, compared to $54.8m in the same quarter of the previous year.
The GAAP operating margin decreased by 2.7% to 5.7%, primarily due to higher expenses and an unfavourable channel mix.
Over the nine months leading up to 2 November 2024, Guess recorded a GAAP net loss of $21.0m, which contrasts with net earnings of $82.9m for the same period last year.
Total net revenue for these nine months increased by 9% to $2.06bn, and by 11% on a constant currency basis.
Alberini said: “In the third quarter we delivered revenue growth of 13%. This increase was primarily driven by the rag & bone acquisition coupled with modest growth of our core Guess businesses.
“All of our operating segments posted revenue growth, except for our Licensing segment, which was impacted by the internalisation of our outerwear business and delivered flat revenues. Our business in Europe was strong while North America and Asia experienced a more challenging environment impacted by slow customer traffic into our direct-to-consumer channels. During the period we managed margins and expenses well, delivering earnings from operations near the top of our expectations.”
Fiscal 2025 outlook
For the full fiscal year of 2025, Guess lowered its guidance. It now forecasts a consolidated net revenue increase between 7.1% and 8.1%, with diluted EPS expected to be between $0.70 and $0.82.
Alberini noted that the adjustment in fourth-quarter revenue outlook reflects the softness experienced in the third quarter, primarily in North America and in Asia, and a price-sensitive consumer.
“As we look into next year, we remain focused on the evolution of our vision for growth. We have a powerful platform and a strong team that continues to adapt to our new model to create significant value for our shareholders over the long term,” He added.
As of 2 November 2024, Guess directly operated 1,057 retail stores across Europe, the Americas, and Asia.
