Guess? (GES) Q1 2026 earnings summary

Executive summary

• Q1 revenue rose 9% year-over-year to $648 million, 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), with an adjusted net loss of $22.3 million (adjusted loss per share $0.44), reflecting higher expenses, asset impairments, and derivative losses.

• Operating margin was negative 5.1% (adjusted negative 4.0%), impacted by business mix, asset impairments, and currency.

• Disciplined expense management and strategic focus on retail productivity, brand awareness, and business model optimization aimed to drive profitability.

• Initiatives included new loyalty programs, AI-powered customer insights, and flexible store assortments.

Financial highlights

• Net revenue increased to $647.8 million, up 9% year-over-year (12% in constant currency), with $69 million from acquisitions and $30 million from higher wholesale shipments.

• Gross margin declined to 39.9%, down 200 bps year-over-year, mainly due to business mix and lower royalty income.

• Adjusted operating loss was $26 million (margin -4%), better than guidance.

• SG&A expenses rose 11% to $285 million, mainly from the rag & bone acquisition; SG&A rate improved to 44.2%.

• Inventory increased 15% to $638 million, mainly due to early shipments to mitigate supply chain risks.

• Cash at quarter-end was $151 million, with $350 million in borrowing capacity.

Outlook and guidance

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

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

• Q2 revenue growth expected at 2.9%–4.7%, with adjusted EPS of $0.11–$0.21.

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

• Tariff impact for the year expected to be less than $10 million.