Guess? saw a significant unrealised loss of $60.7m in FY25 due to the revaluation of derivatives linked to the company’s convertible senior notes due in 2028 and associated convertible note hedges.
Guess? FY25 key metrics
Total net revenue for the fiscal showed an increase of 8%, reaching $3bn up from $2.78bn in fiscal 2024.
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Revenue streams varied by region, with Europe and Americas retail experiencing a growth of 7% in constant currency. However, Asia faced a downturn with revenues falling by 5% in US dollars and 2% in constant currency.
Licensing revenues enjoyed growth, rising by 10% in both US dollars and constant currency.
Earnings per share (EPS) of Guess? on a GAAP diluted basis saw a reduction of 75% to $0.77 for FY25, down from $3.09 in FY24.
The company’s EPS was influenced by share repurchases, which had a beneficial effect of $0.03, and currency fluctuations, which had a detrimental impact of $0.23.
The retailer’s operating earnings on a GAAP basis for FY25 were down by 34% to $173.8m, this figure includes gains from the sale of the US distribution centre totalling $13.8m during the second quarter and was impacted by unfavourable currency translation effects amounting to $15.7m.
The operating margin on a GAAP basis fell by 3.7% to 5.8%, down from 9.5% in fiscal 2024.
Guess? chief executive officer Carlos Alberini said: “During the year, we delivered solid results with our Licensing segment and our wholesale businesses in Europe and the Americas, but missed our plans for our direct-to-consumer business due to slower customer traffic in North America and Asia. Importantly, this year we reached a significant milestone for our company, as we executed our first acquisition in Guess’s history, with the addition of Rag & Bone to our portfolio.”
Guess? Q4 performance
During the quarter ending 1 February 2025, Guess? posted net earnings of $81.4m, marking a decrease of 29% from the $115.3m recorded during the equivalent quarter of the previous year.
The diluted EPS for Q4 dropped by 32% to $1.16 compared to $1.71 for the corresponding quarter last year, with share buybacks positively contributing $0.05 and currency movements negatively impacting EPS by $0.13.
For the same quarter, net revenue rose by 5% to $932.3m from $891.1m year-on-year; this represented a constant currency increase of 9%.
Revenue changes across regions during this quarter included a modest rise of 2% in Europe when measured in US dollars and Americas retail saw an uptick of 4% in US dollars. Asia faced a more pronounced decline with revenues dropping by 15% in US dollars.
Licensing revenues surged by 18% across both metrics.
Alberini added: “The growth in the period was primarily driven by the Rag & Bone acquisition coupled with positive momentum in our wholesale businesses in Europe and the Americas and increased licensing revenues.”
The company’s earnings from operations decreased by 28.4% to $103.6m in Q4 FY25, which included negative impacts due to unfavourable currency translation totalling $6.4m, compared with $144.8m for the same period last year.
Operating margin on a GAAP basis for this quarter fell by 5.2% to reach an 11.1% down from last year’s figure of 16.3%.
Guess? Q1 and FY26 outlook
Guess? forecasts an increase in net revenue ranging between approximately 3.9%-6.2% in fiscal 2026 (FY26).
It also projected operational earnings between $133m and $165m, with expectations for GAAP diluted EPS between $1.03 and $1.37 and anticipates an improvement in operating margins ranging from roughly 4.3%-5.2%.
For Q1 FY26, Guess? anticipates consolidated net revenue growth between nearly 5.8-7.5%. It projects operational losses between $35m and $30m with anticipated diluted loss per share ranging from approximately $0.75 to $0.66.
Alberini has indicated that the company is shifting its strategic focus towards enhancing productivity in direct-to-consumer sales on a global scale and boosting profitability by streamlining its business and portfolio.
As part of this strategy, the company is considering transitioning out of its direct operations in Greater China, which it has managed for many years. The aim is to hand over the market development to a local partner with extensive experience.
Discussions with several prospective partners are underway, with the goal of completing this change before the current fiscal year concludes.
In North America, Guess? plans to refine its network of full-price stores by closing down locations that do not align with its strategic goals or are not profitable. Additionally, it is looking to cut costs by consolidating some of the infrastructure that supports their operations in this region.
He added: “Our fiscal 2026 outlook includes the anticipated impact from these actions and we expect that, together, they will unlock approximately $30m in operating profit in fiscal 2027.”
