557014221a09533d29c1f2d3c2b8f4576ba7129dcabffb03604d0e63adcf570b

1c5d32dc06d4c6385a14d82191d2aab79e30299578d3cf2453da64080bfcf387

81abd52cb0a483d8dd8347904e355ac0bef5bbf550c7bbe5f66b20850b5540c9

5019a5f92b1243f94646080ecf11eb9c779c8cdb7faad90bf195c60cd53c4f3d

Americas Retail Revenue

Americas Wholesale Revenue

Licensing Revenue

091e96825c873725b95ee467537a5e9c92d32e8bcffdf032d5fc70703bc115ee

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Number of Directly Operated Stores in Europe (Stores)

Number of Directly Operated Stores in the Americas (Stores)

Retail Comparable Sales Impact from Turkey (Impact % 1)

Retail Comparable Sales Impact from Turkey (Impact % 2)

Co-Branding Arrangement Fee from the Beverage Company (USD)

Distributorship Arrangement Fees (USD)

Global Store Count (Stores)

18649537b2d05d12db9d0f80331de7ec96c869365e9d0b84e4d35d8a0bdd6d76

Guess?, Inc. is a global lifestyle brand that designs, markets, distributes, and licenses contemporary apparel and accessories for men, women, and children. The company offers a blend of American lifestyle and European fashion sensibilities through its diverse range of products. Guess?, Inc. sells clothing, eyewear, watches, handbags, footwear, and other fashion accessories under various trademarks.

1. **Europe** - Operates retail, e-commerce, and wholesale channels across Europe and the Middle East, contributing significantly to the company's revenue  **[0000912463-24-000029_ges-20240203.htm:205]** **[0000912463-24-000029_ges-20240203.htm:88]** .
2. **Americas Retail** - Manages retail and e-commerce operations in the Americas, focusing on direct-to-consumer sales  **[0000912463-24-000029_ges-20240203.htm:205]** **[0000912463-24-000029_ges-20240203.htm:88]** .
3. **Americas Wholesale** - Distributes products through wholesale channels to department stores and specialty retailers in the Americas  **[0000912463-24-000029_ges-20240203.htm:205]** **[0000912463-24-000029_ges-20240203.htm:88]** .
4. **Asia** - Includes retail, e-commerce, and wholesale operations in Asia and the Pacific, expanding the brand's reach in these regions  **[0000912463-24-000029_ges-20240203.htm:205]** **[0000912463-24-000029_ges-20240203.htm:88]** .
5. **Licensing** - Grants licenses to third parties to design, manufacture, and distribute products that complement its apparel lines, including operating licensed retail stores  **[0000912463-24-000029_ges-20240203.htm:205]** **[0000912463-24-000029_ges-20240203.htm:88]** .

8eb3748fcd0bf2d23160feafe16e5fe026276f5ad27ae930518fd21b4f968e43

| Name               | Position                                                                 | Start Date         | Short Bio                                                                                                                                                                                                 |
|--------------------|--------------------------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Paul Marciano      | Chief Creative Officer and Director                                      | August 2015        | Paul Marciano joined Guess?, Inc. two months after its inception in **1981**. He has served in various senior executive positions, including his current role as Chief Creative Officer since August 2015. He has been a director since **1990**  **[0001193125-24-128252_d784341ddef14a.htm:48]** **[0001193125-23-100596_d452324ddef14a.htm:28]** **[0001193125-24-128252_d784341ddef14a.htm:49]** . |
| Carlos Alberini    | Chief Executive Officer and Director                                     | February 2019      | Carlos Alberini has served as the Chief Executive Officer and a member of the Board of Directors of Guess?, Inc. since February 2019. Previously, he was the Chairman and CEO of Lucky Brand from February 2014 until February 2019  **[0001193125-24-128252_d784341ddef14a.htm:50]** **[0001193125-24-104888_d784341dpre14a.htm:50]** .          |
| Markus Neubrand    | Chief Financial Officer                                                  | July 3, 2023       | Markus Neubrand has been serving as the Chief Financial Officer of Guess?, Inc. since July 3, 2023. Prior to joining Guess?, he was the Group CFO of MCM Worldwide from January 2021 to June 2023  **[0001193125-24-128252_d784341ddef14a.htm:53]** **[0000912463-23-000022_gescfocaopressrelease5123.htm:0]** **[0000912463-23-000041_ges-20230630.htm:1]** .                                      |
| Dennis R. Secor    | Executive Vice President, Finance                                        | July 2023          | Dennis R. Secor has been an employee of Guess?, Inc. since March 15, 2022. He currently serves as Executive Vice President, Finance, a position he has held since July 2023. He previously served as Interim CFO and Chief Accounting Officer  **[0001193125-24-128252_d784341ddef14a.htm:53]** **[0001193125-24-104888_d784341dpre14a.htm:53]** **[0000912463-24-000061_ges-20240815.htm:1]** **[0001193125-24-128252_d784341ddef14a.htm:104]** **[0000912463-24-000061_pressreleaseofguessincdate.htm:0]** . |
| Fabrice Benarouche | Senior Vice President Finance, Investor Relations and Chief Accounting Officer | April 2023         | Fabrice Benarouche has served as the Senior Vice President Finance, Investor Relations and Chief Accounting Officer at Guess?, Inc. since April 2023. He joined Guess? in 2006 and has held various financial roles within the company  **[0001193125-24-128252_d784341ddef14a.htm:53]** **[0001193125-24-104888_d784341dpre14a.htm:53]** .       |

48578b809f9218b92d43810a69f9a2975732c62d97da37424785f99d173d3a70

1. Given the continued underperformance of the Americas retail segment despite your global product standardization, what specific strategic adjustments are you implementing to address declining traffic and comps in the U.S. market?
2. With significant investments made in marketing and customer engagement initiatives, how do you plan to measure the effectiveness of these investments in reversing the challenges faced in the Americas retail business, and when do you expect to see tangible results?
3. Considering the stronger U.S. dollar has negatively impacted your international revenues and operating profits, what measures are you taking to mitigate currency risk and hedge against future foreign exchange volatility?
4. While the acquisition of rag & bone has contributed to revenue growth, it is currently dilutive to operating margins; can you elaborate on your integration plan for rag & bone and provide a timeline for when you expect it to enhance overall profitability?
5. Inventory levels have increased by 20%, partly due to accelerated deliveries amid the Red Sea crisis; how are you managing the risks associated with higher inventory in a volatile consumer environment, and what strategies are in place to optimize inventory levels moving forward?

919c52a787879d41403d7e89e0b32538bbca75982cd6611fb2760eafd98afe58

| Program Details          | Program 1 (2024 Program)                                                                 |
|--------------------------|------------------------------------------------------------------------------------------|
| **Approval Date**        | **March 25, 2024**.  **[0000912463-24-000096_ges-20241102.htm:23]**                                                                   |
| **End Date/Duration**    | No specific end date; can be discontinued at any time without prior notice.  **[0000912463-24-000096_ges-20241102.htm:23]**           |
| **Total Additional Amount** | **$200 million**.  **[0000912463-24-000096_ges-20241102.htm:23]**                                                                  |
| **Remaining Authorization** | **$139.8 million** as of November 2, 2024.  **[0000912463-24-000096_ges-20241102.htm:23]**                                         |
| **Details**              | Allows repurchases on the open market or through privately negotiated transactions.  **[0000912463-24-000096_ges-20241102.htm:23]**   |

933631dc6cc61dc0d12bc338b4cc73d5eb37cdba5286c6de3b070e22d215cdc8

- **Guess is experiencing strong growth in Europe, particularly in its wholesale business, where it is taking market share and exceeding shipment expectations.**  **[GES_3410142_10]**
- **The company is investing significantly in marketing and loyalty programs, including a new omnichannel loyalty program in Europe, to regain top-line momentum and enhance customer engagement.**  **[GES_3410142_10]**
- **Guess aims to achieve double-digit operating margins, leveraging its high-margin royalty income (over $100 million annually with a 90% operating margin), and sees no limiting factors to accomplishing this goal.**  **[GES_3410142_10]**

84f1ab25229aa4e66869cf563c784f29b71a4aa82d8af4ed756c6b174aafd88c

- **Significant operating margin deterioration expected in Q1 FY2025**, with adjusted operating loss margin guided between **-2.3% to -2.8%**, a decline of approximately **250 to 300 basis points year-over-year**, due to shipment delays, increased freight costs, and FX headwinds.  **[GES_3378591_13]**
- **$50 million revenue headwind in Q1** from delayed shipments in Europe caused by the **Red Sea crisis**, impacting revenues and increasing freight costs, especially in the first and second quarters.  **[GES_3378591_13]**
- **Growth initiatives**, including the Guess jeans launch and Rag & Bone acquisition, are expected to benefit only in the **later part of the year**, while **expenses and investments are incurred upfront**, potentially pressuring near-term performance.  **[GES_3378591_13]**

ccfa5fb47440150870b7bb627fe84da7c0b843a2836b728d94b189a91d3d2ab1

- **Guess?'s strategic investments in new brands like Rag & Bone and Guess? Jeans are expected to drive long-term sustainable growth.** The integration of Rag & Bone is progressing smoothly, with opportunities to expand the brand internationally, particularly in Europe where it currently has little presence. **Rag & Bone caters to a more affluent consumer, complementing Guess?'s existing customer base.**  **[GES_3400055_13]**
- **The company is significantly increasing its marketing investments to build brand awareness and enhance customer engagement.** Marketing spend more than doubled in Q2 and is expected to continue at higher levels throughout the year. These investments aim to drive improved customer traffic to stores and online, supporting both existing brands and new additions like Rag & Bone and Guess? Jeans.  **[GES_3400055_11]**
- **Guess? maintains a strong financial position with a healthy balance sheet and ample liquidity to support growth initiatives.** The company has **$600 million of available liquidity**, having refinanced convertible bonds and expanded credit facilities. This financial strength enables Guess? to invest in its strategic initiatives and pursue long-term growth opportunities.  **[GES_3400055_13]**

b9807c28b846852eea3b00a0516c7a6d8c7c6e0121218ee5806d3dce0f683494

- **Weakness in North American retail business**: The company acknowledged that their results in North America have not been in line with the brand's potential, facing challenges such as declining store traffic, negative comps, and increased competition. They now have only about **55 stores** in North America and are working on rebuilding the brand in the U.S. and Canada.  **[GES_3410142_11]**
- **Increased expenses impacting operating margins**: Guess is making significant investments in marketing and advertising to rebuild brand awareness, which is putting pressure on operating margins. The CEO admitted that these investments may not deliver immediate returns, and the company is adjusting its earnings outlook due to these expenses and other factors.  **[GES_3410142_10]**
- **Supply chain challenges and potential tariff impacts**: The company is facing higher freight costs due to supply chain disruptions, such as the Red Sea crisis, and is incurring additional expenses to secure product deliveries. Additionally, potential tariffs on goods from China and Mexico pose risks to their sourcing strategy, especially in categories where Chinese vendors are strong, which could lead to compromised product quality or increased costs.  **[GES_3410142_12]**

15044a8724b9e80cee9cab5000da03387e03bc047f2c4f0e493bba8f4364c0a1

- **Launch of the Guess Jeans brand is expected to drive significant growth**, with initial results **ahead of expectations**, positive reception from wholesale customers, and strategic store openings in key locations such as **Melrose in Los Angeles** and European cities. The brand aims to attract a younger consumer but appeals to all ages.  **[GES_3378591_12]**
- **Strong performance in Europe**, with the European business reaching **$1.5 billion in revenue**, positive comps for several quarters, and **30% growth in European wholesale over the last four years**, from **$480 million to $630 million**, demonstrating the strength of the brand and successful expansion into new categories like athleisure.  **[GES_3378591_11]**
- **Robust financial position with less than $100 million in net debt**, enabling continued capital returns to shareholders, including special dividends, and providing capacity for strategic investments and share repurchases.  **[GES_3378591_12]**

c23ee011dfe269bcf227232032b6164422899bfab834f8336feec4533e5ffa2c

- **Softness in the Americas Retail business is impacting overall performance and guidance.** The company stated that **"the Americas Retail business has been soft, and these assumptions are now part of our second quarter guidance."**  **[GES_3391184_8]**
- **Currency headwinds are expected to negatively affect revenue growth and earnings.** They expect **"currency headwinds are expected to have a net adverse impact on revenue growth of roughly 2 points"** in the second quarter.  **[GES_3391184_8]**
- **Timing issues in European wholesale shipments may affect revenue recognition and indicate potential demand challenges.** The company mentioned **"we do have some timing issues that impacted just the wholesale business in Europe"** affecting guidance.  **[GES_3391184_8]**

081b039231863bc3b9dba6e6bf063d3fd2b466fd7ba94223708e5b89e2088b42

- **Strong revenue growth and operating margin guidance maintained**: Despite regional challenges, Guess? Inc. has maintained its guidance, expecting strong revenue growth and an adjusted operating margin at the top end of **8.5%** and **$3** per share for fiscal year 2025.  **[GES_3391184_8]**
- **Significant growth opportunities with the rag & bone acquisition**: The company is excited about the potential of **rag & bone**, focusing on expanding product assortment and making the brand global. There is an opportunity to increase the number of stores beyond the current **34** and leverage Guess?'s strong capital access and relationships to grow the brand internationally.  **[GES_3391184_11]** **[GES_3391184_10]**
- **Improved operating margins anticipated in Q4 due to strategic initiatives**: Guess? Inc. expects operating margin expansion in the fourth quarter, driven by improved full-price selling, timing of wholesale shipments, and the addition of **rag & bone**, which has a significant retail component and is accretive to margins.  **[GES_3391184_9]**

a4d4699c891ed2ab7dc8bb2056ee3f9c5fac622d14aa88cf61ed89f5c728922a

- The **Americas Retail business is facing significant challenges**, including **declining customer traffic in the U.S. and Canada**, and **negative same-store sales**, with no clear indication of when these trends might improve.  **[GES_3400055_12]**
- The company is experiencing **increased costs** due to higher freight expenses from shipping challenges and **significant investments in marketing and new store openings**, which are impacting operating margins and near-term profitability.  **[GES_3400055_14]** **[GES_3400055_11]**
- **Management has reduced earnings expectations for the year**, and **variable compensation is being lowered due to lower earnings expectations**, indicating the company is not meeting its prior financial targets.  **[GES_3400055_15]**

3419d6908187d3e806fe0602e313c32d5d0117dc9e4a4605cddccb88ce265ef1

Guess? Inc (GES)

Financials