Guess?, Inc. Reports $32.9 Million Net Loss Despite 9.4% Revenue Growth

Guess?, Inc. reported a significant financial downturn in its latest quarterly results, with a net loss of $32.9 million, or $0.65 per diluted share, for the three months ending May 3, 2025. This contrasts sharply with a net profit of $13 million, or $0.24 per diluted share, during the same period last year. The company's total net revenue increased by 9.4% to $647.8 million, up from $591.9 million in the prior year, primarily driven by the acquisition of rag & bone and higher wholesale shipments. However, the gross margin fell to 39.9%, down from 41.9%, attributed to unfavorable channel mix and increased store occupancy costs.

The company experienced a notable increase in selling, general, and administrative (SG&A) expenses, which rose by 7.4% to $286.5 million. This increase was largely due to the integration of rag & bone and higher operational costs. Additionally, Guess? recognized $6.1 million in asset impairment charges, a significant rise from $1.1 million in the same quarter last year. The loss from operations also increased by 67.5% to $33.3 million, reflecting the impact of higher asset impairment charges and unfavorable currency fluctuations.

Operationally, Guess? opened 32 new stores globally during the quarter, while closing 28, resulting in a total of 1,601 stores as of May 3, 2025. The Americas Wholesale segment saw a substantial revenue increase of 63.3%, largely due to the rag & bone acquisition. However, the Asia segment reported a 20% decline in revenue, primarily due to negative comparable store sales and lower e-commerce performance. The company’s inventory levels rose by 15% to $638.2 million, driven by efforts to mitigate supply chain disruptions.

Looking ahead, Guess? is navigating a challenging macroeconomic environment characterized by inflation, rising interest rates, and geopolitical tensions, particularly the ongoing conflicts in Ukraine and Gaza. The company is focused on managing expenses and optimizing its operations to protect profitability. Additionally, it plans to leverage its recent acquisition of rag & bone to enhance its brand portfolio and reach new customer segments. The company remains cautious about future market conditions and is actively monitoring global developments that could impact its business.