Guess? (GES) Q3 2025 earnings summary

Executive summary

• Q3 revenue grew 13% to $739 million, driven by the rag & bone acquisition and modest core business growth, but was slightly below expectations due to a stronger U.S. dollar.

• GAAP net loss was $23.4 million (diluted loss per share of $0.47), mainly due to a $39.8 million unrealized loss on derivatives and higher SG&A expenses.

• Adjusted net earnings were $17.7 million, with adjusted EPS of $0.34, down from $0.49 last year.

• All operating segments posted revenue growth except licensing, which was flat due to internalizing outerwear.

• European wholesale and Americas wholesale performed strongly, while Americas and Asia retail businesses faced challenges from softer store traffic and price-sensitive consumers.

Financial highlights

• Q3 revenue: $738.5 million, up 13% year-over-year (14% in constant currency).

• Gross margin: 43.6%, down 110 basis points year-over-year due to channel mix and occupancy deleverage.

• Adjusted operating profit: $43 million; adjusted operating margin: 5.8%, down 310 basis points year-over-year.

• Adjusted EPS: $0.34, down from $0.49 last year.

• Inventories up 20% year-over-year, mainly due to rag & bone acquisition and higher in-transit inventory.

• Cash and cash equivalents at quarter-end: $140.9 million; available liquidity: $486 million.

Outlook and guidance

• Full-year revenue expected at or slightly below $3 billion, growing 7.1%-8.1%.

• Full-year adjusted operating margin expected between 6.2%-6.5%.

• Full-year adjusted EPS outlook updated to $1.85-$2.00.

• Q4 revenue growth expected between 2.2%-5.4%, adjusted operating margin 12.2%-13%, and adjusted EPS $1.37-$1.52.

• Free cash flow for the year expected at about $40 million.