Guess? (GES) Q1 2026 earnings summary

Executive summary

• Q1 revenue rose 9% year-over-year to $648 million (12% in constant currency), driven by the integration of rag & bone and strong wholesale momentum in Europe and the Americas.

• GAAP net loss was $32.9 million (loss per share $0.65), compared to net earnings of $13.0 million (EPS $0.23) in the prior-year quarter; adjusted net loss was $22.3 million (adjusted loss per share $0.44).

• Operating margin was negative 5.1% (adjusted negative 4.0%), reflecting higher expenses, asset impairment charges, and unfavorable currency impacts.

• Disciplined expense management and strategic initiatives focused on retail productivity, brand awareness, and operational efficiency.

• The quarter included the completed acquisition and integration of rag & bone, contributing to revenue and expense growth.

Financial highlights

• Net revenue increased to $647.8 million from $591.9 million year-over-year; constant currency growth was 12%.

• Gross margin declined to 39.9% from 41.9% year-over-year, mainly due to business mix and lower royalty income.

• Adjusted loss from operations was $25.8 million (adjusted operating margin -4.0%), up from $7.7 million (-1.3%) in the prior-year quarter.

• SG&A expenses increased 11% to $285 million, primarily due to the rag & bone acquisition; SG&A rate improved to 44.2%.

• Inventory increased 15% year-over-year to $638.2 million, mainly from accelerated deliveries to mitigate supply chain risks.

• Cash and cash equivalents at quarter-end were $151.2 million, with $350 million in borrowing capacity.

Outlook and guidance

• Fiscal 2026 revenue expected to increase 5.5%–7.4% in U.S. dollars.

• Adjusted operating margin forecasted at 4.4%–5.1%; adjusted EPS between $1.32 and $1.64.

• Q2 revenue growth expected at 2.9%–4.7% in US dollars; adjusted operating margin 2.5%–3.3%; adjusted EPS $0.11–$0.21.

• Free cash flow for the year projected at $55 million, with $65 million in CapEx.

• Guidance incorporates anticipated tariff impacts, expected to be less than $10 million.