Published on 31 May 2024 on Zacks via Yahoo Finance

Guess? (GES) Q1 Loss Narrower Than Expected, Revenues Up Y/Y

Guess? Inc. GES reported first-quarter fiscal 2025 results, wherein the top line increased year over year and surpassed the Zacks Consensus Estimate. While the bottom line fared better than the Zacks Consensus Estimate, it declined from the prior year.Revenues benefited from solid brand momentum globally and strong customer response to its diversified portfolio. Management remains optimistic about its robust global platform, which will facilitate strong revenue growth and margin performance in the upcoming quarters.Management remains positive about the new fiscal, wherein it expects to surpass $3 billion in revenues for the first time, supported by an impressive growth plan for its core business. Moving ahead, the company completed the previously announced acquisition of the New York-based fashion brand rag & bone and is optimistic to derive benefits from this acquisition.

Results in Detail

Guess? reported adjusted loss of 27 cents per share that fared better than the Zacks Consensus Estimate of a loss of 39 cents. However, the bottom line deteriorated from an adjusted loss of 7 cents per share in the year-ago quarter. Earnings were negatively impacted by external factors like share buybacks and currency fluctuations.Net revenues amounted to $591.9 million, cruising ahead of the consensus mark of $577 million. The metric rose 4% year over year. On a constant-currency (cc) basis, net revenues grew 7%, driven by exceptional performances in Licensing and Americas wholesale divisions, alongside significant gains in the Europe and Asia markets.Gross margin expanded from 40.7% to 41.9% in the reported quarter. As a percentage of sales, SG&A expenses jumped to 45.1% from 40.6% in the prior-year quarter’s level.Adjusted loss from operations was $7.7 million against adjusted operating earnings of $1.9 million in the same quarter of the previous year. The adjusted operating margin declined mainly because of higher expenses and the unfavorable impact of currency. This was somewhat mitigated by the favorable impact of higher revenues and initial markups.