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GI

GUESS INC (GES)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 revenue and EPS beat Street: revenue $0.773B vs $0.761B consensus and adjusted EPS $0.26 vs $0.16 consensus; GAAP EPS $0.12 . Consensus from S&P Global; see estimates table below.*
  • Mix and expenses pressured GAAP operating margin to 2.3% (adjusted 3.7%); Europe outperformed while Americas Retail comps remained negative and Asia margins deteriorated .
  • Company announced a take‑private at $16.75 per share with Authentic Brands/rolling shareholders and suspended guidance; no Q2 earnings call was held .
  • Near‑term trading narrative centers on: definitive deal at $16.75, estimate beats on revenue/EPS, guidance suspension, and continued operating cost/mix headwinds .

What Went Well and What Went Wrong

What Went Well

  • Europe strength: revenue +14% USD (+9% cc) with retail comps +11% USD (+5% cc); segment operating margin expanded to 10.6% (+80 bps YoY) driven by higher revenues and FX tailwind .
  • Adjusted profitability outperformed guide: adjusted operating margin 3.7% vs 2.5–3.3% guided; adjusted EPS $0.26 vs $0.11–$0.21 guided, aided by revenue beat and cost control .
  • Management tone on execution: “delivered revenues ahead of our expectations… managed margins and expenses well… better than expected adjusted earnings per share” — CEO Carlos Alberini .

What Went Wrong

  • GAAP margin compression: GAAP operating margin fell to 2.3% (vs 6.5% LY), pressured by higher store/advertising costs, transaction costs, mix, and higher markdowns; GAAP EBIT declined 62% YoY .
  • Americas Retail/Asia softness: Americas Retail comps −5% with segment margin to −3.7% (−520 bps YoY); Asia margin to −6.8% (−450 bps), reflecting negative comps/mix .
  • Free cash flow negative YTD: FCF −$44.6M for the first six months on higher capex/lease payments; inventory elevated at $668.4M .

Financial Results

Summary vs Prior Quarters

MetricQ4 FY25 (oldest)Q1 FY26Q2 FY26 (newest)
Revenue ($USD Millions)$932.3 $647.8 $772.9
GAAP Operating Margin11.1% (5.1%) 2.3%
Adjusted Operating Margin11.4% (4.0%) 3.7%
GAAP Diluted EPS$1.16 ($0.65) $0.12
Adjusted Diluted EPS$1.48 ($0.44) $0.26

Q2 FY26 vs S&P Global Consensus (Street) and Actuals

MetricConsensus (Q2 FY26)Actual (Q2 FY26)
Revenue ($USD)$760.8M*$772.9M
Primary EPS$0.159*$0.26
EBITDA ($USD)$41.4M*$38.2M*

Values marked with * retrieved from S&P Global.

Segment Performance (Q2 FY26 vs Q2 FY25)

SegmentRevenue Q2 FY26 ($M)Revenue Q2 FY25 ($M)YoY %Op Margin Q2 FY26Op Margin Q2 FY25
Europe436.9 383.2 14% 10.6% 9.8%
Americas Retail178.8 181.5 (1%) (3.7%) 1.5%
Americas Wholesale75.2 84.4 (11%) 19.6% 18.9%
Asia55.8 54.3 3% (6.8%) (2.3%)
Licensing26.3 29.1 (10%) 95.4% 93.3%
Total772.9 732.6 6% GAAP 2.3% GAAP 6.5%

KPIs and Cost Structure (Q2 FY26)

KPIQ2 FY26Prior-Year/Notes
Gross Margin42.5% 43.7% LY
SG&A Rate39.9% 38.7% LY
Europe Retail Comps (incl. e-comm)+11% USD / +5% cc —
Americas Retail Comps (incl. e-comm)−5% USD/cc —
Asia Retail Comps (incl. e-comm)−2% USD/cc —
Licensing Revenue YoY−10% USD/cc —
Inventory$668.4M $603.3M LY
Free Cash Flow (Six Months)−$44.6M −$23.0M LY
Store Count (Total / Direct / Partner)1,589 / 1,062 / 527 1,591 / 1,054 / 537 LY

Guidance Changes

  • Company suspended guidance and did not host a Q2 call due to the proposed take‑private transaction .

Prior Guidance (from Q1) vs Current

MetricPeriodPrevious Guidance (Q1 FY26)Current (Q2 FY26)Change
Revenue growth (USD)FY26+5.5% to +7.4% Guidance suspended Suspended
GAAP Operating MarginFY263.9%–4.6% Guidance suspended Suspended
Adjusted Operating MarginFY264.4%–5.1% Guidance suspended Suspended
GAAP EPSFY26$0.87–$1.11 Guidance suspended Suspended
Adjusted EPSFY26$1.32–$1.64 Guidance suspended Suspended
Free Cash Flow (guide)FY26~$55M Guidance suspended Suspended
Dividend per shareQ2/FY26$0.30 in Q1 $0.225 in Q2 Lowered in Q2 declaration

Q2 Outcomes vs Q1 Q2 Guidance

MetricQ1 Guide for Q2Actual Q2Outcome
Revenue Growth (USD)+2.9% to +4.7% +6% Above
GAAP Operating Margin2.5%–3.3% 2.3% Slightly below
Adjusted Operating Margin2.5%–3.3% 3.7% Above
Adjusted EPS$0.11–$0.21 $0.26 Above

Earnings Call Themes & Trends

Note: The company did not host a Q2 earnings call due to the proposed transaction .

TopicQ4 FY25 (Q‑2)Q1 FY26 (Q‑1)Current Period (Q2 FY26)Trend
Europe performanceWholesale/Europe growth; Asia weak; op margin lower on costs Europe wholesale mid‑teens growth; retail comps −4% cc; investments/FX drove lower margins Europe revenue +14% USD, comps +11% USD; margin +80 bps YoY to 10.6% Improving
Americas RetailQ4 comps −14% USD; margin down to 8.9% Traffic headwinds; comps −11% cc; initiatives on pricing, assortment; sequential improvement late Q1 Comps −5% and margin −3.7% on higher costs/markdowns Mixed recovery; margin under pressure
Asia/Greater China strategyAsia down; exploring partner for China Intent to eliminate ~$20M China loss next year via partner; rightsizing Asia margin fell to −6.8% on unfavorable mix Restructuring continues
Tariffs—Tariff impact < $10M embedded in outlook No update; guidance suspended Monitor
Supply chain/Red Sea—Pulled product forward to protect wholesale shipments; working capital up Inventory elevated at $668M Working capital elevated, expected to normalize
rag & bone integrationAcquisition tailwind; segment mix effects Outperformed on wholesale/retail; ~$320M+ plan; new licenses (handbags, watches, eyewear, fragrances) Referenced integration; licensing down YoY overall Positive structural driver

Management Commentary

  • “We are pleased with our second quarter performance, as we delivered revenues ahead of our expectations… managed margins and expenses well… better than expected adjusted earnings per share.” — Carlos Alberini, CEO .
  • Q2 context and transaction: Company entered into a definitive agreement to go private at $16.75 per share and suspended guidance/no call in light of the transaction .

Q&A Highlights

No Q2 call was held. Key themes from Q1 Q&A for context:

  • rag & bone growth trajectory: plan >$320M revenue, expansion in stores/Europe and new licensed categories; broad-based wholesale strength .
  • Americas Retail trajectory: product/pricing/assortment changes driving better conversion; women’s apparel +3%; sequential comp improvement; more promotional but offset by higher IMU .
  • Inventory/working capital: intentional earlier receipts (Red Sea risk) to protect shipments; ~$50M working capital investment expected to unwind as conditions normalize .
  • Margin cadence: inverted bell‑curve revenue profile; Q4 currency tailwind expected to be meaningful (note: made pre‑deal; guidance now suspended) .

Estimates Context

  • Q2 FY26 vs Street (S&P Global): Revenue $760.8M est vs $772.9M actual; Primary EPS $0.159 est vs $0.26 actual; EBITDA $41.4M est vs $38.2M actual (revenue/EPS beat; EBITDA slight miss). Values retrieved from S&P Global.*
  • Forward (S&P Global): Q3 FY26 consensus revenue $767.9M; EPS $0.254; Q4 FY26 revenue $1.013B; EPS $1.463.*
  • Implications: With guidance suspended and a definitive deal at $16.75, near‑term estimate dispersion likely narrows around run‑rate assumptions; mix/expense commentary and Americas Retail/Asia recovery path are the primary swing factors rather than company‑issued outlook .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Q2 beat on revenue and adjusted EPS vs consensus; adjusted margin outperformed guide despite GAAP margin compression on higher expenses/mix .
  • Europe remains the growth/margin anchor; Americas Retail shows early sequential progress but remains negative comps and margin‑dilutive; Asia profitability remains a headwind .
  • Guidance is suspended and no call was held as the company proceeds with the $16.75 per share take‑private with Authentic and rolling shareholders, placing a de‑facto near‑term valuation anchor on the stock .
  • YTD free cash flow negative with elevated inventories tied to proactive supply chain positioning; management has previously indicated intent to unwind working capital as conditions normalize .
  • Dividend reset: Q2 declared $0.225 vs $0.30 in Q1, consistent with a transitional posture ahead of proposed transaction closing .
  • Trading lens: focus on deal probability/timing (target Q4 FY26 close), regulatory/shareholder approvals, and interim execution in Europe and cost control into H2 seasonality .

Appendix: Documents Read

  • Q2 FY26 8‑K/Press Release (full financials, non‑GAAP reconciliations, segment details) .
  • Q2 FY26 press release duplicate content –.
  • Take‑private transaction press release (Aug 20, 2025) –.
  • Q1 FY26 8‑K and earnings call transcript for prior‑quarter context – –.
  • Q4 FY25 8‑K for Q‑2 trend context –.