Guess? (GES) Q3 2026 earnings summary

Executive summary

• Net revenue for the quarter ended November 1, 2025, increased 7.2% year-over-year to $791.4 million, with diluted EPS of $0.48 versus a loss of $0.47 in the prior year.

• GAAP net earnings for Q3 were $25.6 million, reversing a net loss of $23.4 million in the prior-year quarter, aided by a $17.9 million unrealized gain on derivatives.

• Adjusted net earnings were $19.0 million and adjusted diluted EPS was $0.35, excluding one-time items.

• A take-private transaction with Authentic Brands Group was approved by shareholders and is expected to close in Q4 FY2026, pending regulatory approvals.

• Acquisition of rag & bone completed and integrated into existing segments.

Financial highlights

• Gross margin decreased 110 basis points to 42.5% due to higher markdowns and unfavorable business mix.

• SG&A expenses rose 10.6% to $309.0 million, with the SG&A rate up 140 basis points to 39.2%.

• Operating margin fell to 2.9% from 5.7% year-over-year; adjusted operating margin declined to 4.7% from 5.8%.

• Other income, net, was $21.2 million, driven by a $17.9 million unrealized gain on derivatives, compared to a $45.8 million loss in the prior year.

• Cash and cash equivalents were $154.2 million at quarter-end, with $308.3 million in outstanding credit facility borrowings.

Outlook and guidance

• The proposed take-private transaction is expected to close in Q4 fiscal 2026, subject to regulatory approvals.

• Inflationary pressures, macroeconomic uncertainty, and ongoing geopolitical conflicts are expected to continue impacting results.

• Management expects persistent inflation and foreign currency volatility to affect margins and sales.