Guess?, Inc. Reports 69.5% Decrease in Net Earnings Despite 7.9% Revenue Growth for Fiscal 2025

Guess?, Inc. reported a net decrease of 69.5% in net earnings attributable to the company, reaching $60 million or $0.77 diluted earnings per share (EPS) for fiscal year 2025. This is compared to $198 million or $3.09 diluted EPS for fiscal year 2024. Total net revenue, however, increased by 7.9% to $3.0 billion in fiscal 2025, from $2.8 billion in the previous fiscal year. This revenue increase, when adjusted for constant currency, shows a 10.5% growth. The company attributed the decrease in net earnings to several factors, including a $61 million net loss on the fair value remeasurement of derivatives and various other charges totaling $44 million (net of tax benefits).

Gross margin decreased by 60 basis points to 43.4% in fiscal 2025, compared to 44.0% in fiscal 2024. This decrease was primarily due to higher store occupancy costs and the impact of newly acquired businesses. Selling, general, and administrative (SG&A) expenses increased by 18.9% to $1.1 billion, resulting in an SG&A rate increase of 350 basis points to 37.9%. The operating margin consequently decreased by 370 basis points to 5.8%. The company's effective income tax rate was 12.0% for fiscal 2025, compared to 10.8% in the prior year.

Significant developments during the fiscal year included the acquisition of rag & bone on April 2, 2024, for a total contribution of $57.1 million (in addition to contributions from WHP Global). Guess?, Inc. now owns all of rag & bone's operating assets, while jointly owning the intellectual property with WHP Global. The company also opened 101 new stores worldwide and closed 93, ending the year with 1,597 stores and 318 concessions. The company also highlighted its global e-commerce presence, operating retail websites in the Americas, Europe, and Asia, available in 50 countries and 13 languages.

The company's wholesale distribution network includes major department stores in Europe and the Americas, as well as smaller boutiques and licensed stores. The number of licensed stores and concessions varied across regions, with a significant presence in Asia. The company also detailed its global sourcing and supply chain, emphasizing its efforts to diversify sourcing beyond China and to improve speed-to-market. The company's outlook acknowledges continued macroeconomic uncertainties, including consumer spending declines, inflation, and geopolitical factors, impacting its business. The company plans to continue investing in growth initiatives, brand relevancy, digital expansion, and operational efficiencies.