GUESS?, Inc. reported its financial results for the second quarter of fiscal 2026, revealing a net revenue of $772.9 million, a 5.5% increase from $732.6 million in the same period last year. The company attributed this growth to a favorable currency translation impact of $19 million and contributions from newly acquired businesses, including rag & bone. However, the gross margin decreased by 120 basis points to 42.5%, primarily due to higher markdowns and an unfavorable business mix. The company recorded earnings from operations of $18.1 million, a significant decline of 62.1% compared to $47.8 million in the prior year, largely influenced by increased expenses and a prior-year gain on asset sales.

In terms of profitability, GUESS? reported a net income of $6.2 million, or $0.12 per diluted share, compared to a net loss of $10.6 million, or a loss of $0.28 per diluted share, in the same quarter last year. The effective income tax rate for the quarter was 45.8%, a notable decrease from 373.9% in the prior year, primarily due to a shift in earnings distribution among tax jurisdictions. The company also recognized $2.3 million in asset impairment charges during the quarter, consistent with the previous year.

Operationally, GUESS? experienced a 10.8% increase in inventory, totaling $668.4 million, driven by accelerated inventory receipts to mitigate supply chain disruptions. Accounts receivable also rose by 11% to $368.7 million, reflecting higher wholesale shipments, particularly in Europe. The company opened 28 new stores globally during the quarter but closed 40, resulting in a total of 1,589 stores worldwide as of August 2, 2025.

Strategically, GUESS? is navigating macroeconomic challenges, including inflation and geopolitical tensions, which have impacted consumer spending and operational costs. The company is also in the process of a proposed take-private transaction with Authentic Brands Group, which would see shareholders receive $16.75 per share in cash. This transaction is expected to close in the fourth quarter of fiscal 2026, subject to shareholder approval and other conditions. The company continues to focus on optimizing its operations and managing expenses to protect profitability amid these challenges.

About GUESS INC

Guess? designs, markets, and distributes a global lifestyle collection of apparel and accessories for men, women, and children. Its core brands include GUESS?, GUESS JEANS, MARCIANO, and G by GUESS, sold through retail stores, e-commerce, wholesale channels, and licensing worldwide. The company emphasizes brand image, innovative design, multi-channel distribution, and responsible sourcing to serve style-conscious consumers across diverse markets.

This description was generated via AI from an annual report. Updated 9 months ago.

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