Q4 2024 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$25.95Last close (Mar 20, 2024)
Post-Earnings Price$31.00Open (Mar 21, 2024)
Price Change
$5.05(+19.46%)
- Guess's acquisition of Rag & Bone presents significant growth potential, as Rag & Bone is heavily concentrated in the U.S. (about 90% of sales), and Guess plans to leverage its global platform spanning 100 countries to expand Rag & Bone internationally and into new product categories.
- The launch of the new Guess jeans brand is receiving strong initial reception, with results "ahead of what we had expected". Positive wholesale response and plans to open flagship stores in key locations like Melrose, Los Angeles and European cities indicate a promising new growth driver.
- Guess maintains a strong balance sheet with less than $100 million of net debt, providing financial flexibility to invest in growth initiatives and potentially return capital to shareholders, as evidenced by their history of rewarding shareholders and capacity for opportunistic capital allocation.
- Guess anticipates a decline in operating margins for fiscal year 2025, projecting an adjusted operating margin between 7.5% and 8.5%, compared to over 9% in fiscal year 2024. This decline is attributed to increased investments, including integration of Rag & Bone, marketing expenses, and higher freight costs due to the Red Sea crisis.
- Negative traffic trends in U.S. stores continue to impact sales, with the company not expecting immediate improvement in the next few months. This ongoing challenge in the Americas region could affect overall sales and profitability.
- Increased freight costs resulting from the Red Sea crisis are expected to pressure margins, especially in the first half of fiscal 2025. The company anticipates that higher inbound freight rates will negatively affect operating margins.
Research analysts covering GUESS.