Guess has reported sales growth for the fourth quarter and announced its restructuring plans for the new fiscal year.
The company’s net revenues for the quarter ended February 1 rose 5 per cent to $932.3 million, driven by the Rag & Bone acquisition, positive momentum in the wholesale business, and increased licensing revenues.
In the Americas, retail sales were up 4 per cent while wholesale revenues soared 63 per cent. Europe revenues increased 2 per cent and Asia revenues fell 15 per cent. Licensing revenues were up 18 per cent.
GAAP net earnings for the period dropped 29 per cent to $81.4 million, including a net $18.9 million unrealized loss due to the change in fair value of the derivatives related to the company’s convertible senior notes due 2028.
For the full year, sales grew 8 per cent to $3 billion and adjusted net earnings decreased 40 per cent to $104.5 million.
“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,” commented CEO Carlos Alberini.
Alberini also revealed the company’s restructuring strategy for FY26, which includes transferring its operations in Greater China to a local partner.
“We have already met several potential candidates for consideration, and we expect this transition to be completed before the end of this fiscal year,” he elaborated.
In North America, the company plans to streamline the Guess full-price store portfolio by exiting non-strategic, unprofitable locations.
For FY26, the retailer expects net revenues to increase 3.9-6.2 per cent. It forecast a loss of $30-35 million in the first quarter and earnings of $133-165 million for the full year.
In a separate announcement, Guess said its board has established a special committee to review the non-binding takeover offer from WHP Global.
“The special committee is carefully evaluating and considering WHP Global’s proposal with the assistance of its financial and legal advisors and has not yet determined whether it is appropriate to pursue the proposed transaction or any other transaction,” the company stated.
