Q1 2025 Earnings Summary
Reported on May 30, 2024 (After Market Close)
Pre-Earnings Price$23.39Last close (May 30, 2024)
Post-Earnings Price$23.13Open (May 31, 2024)
Price Change
$-0.26(-1.11%)
- The acquisition of rag & bone presents significant growth opportunities, as the company plans to increase the product assortment and expand the brand globally. The CEO stated they are "super excited about rag & bone" and that their retail business is "highly successful," with "every single store" producing positive cash flow.
- The new Guess Jeans brand is performing ahead of expectations, with wholesale accounts showing great enthusiasm. Initiatives like Guess Jeans, expansion into India, Chile, and Peru, and the internalization of the outerwear and dress category are expected to drive revenue growth in the second half, especially in Q3.
- The company expects adjusted operating margin expansion, particularly in the fourth quarter, due to improved full-price selling, lower markdowns, better timing of wholesale shipments, and contributions from rag & bone, which "should be accretive to the fourth quarter."
- The company acknowledged weakness in the Americas Retail segment, stating that it "has been soft" with declines in traffic and conversion. These challenges are now reflected in their second quarter guidance, potentially impacting future performance.
- Potential execution risks and delays in expanding rag & bone internationally: Despite plans to grow rag & bone's presence, the company admits they are "going slowly," have not yet selected store locations, and that "things are going to take some time." This cautious approach may delay the anticipated benefits from the acquisition.
- Currency headwinds are impacting revenues, particularly in the first half of the year. The company mentioned that currency issues are "impacting us in the first half significantly," which could adversely affect financial results.
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