GUESS? Swings to Q3 Profit Amid Take-Private Deal, 9-Month Loss Persists

TL;DR

**GUESS? is going private at $16.75/share, so if you're not a rolling stockholder, take your cash and run, because the nine-month financials are still a mess.**

AI Summary

GUESS?, Inc. reported a mixed financial performance for the three and nine months ended November 1, 2025. For the three months, net revenue increased to $791.4 million from $738.5 million in the prior year, a 7.2% increase. Net earnings attributable to Guess?, Inc. significantly improved to $25.6 million, or $0.49 per basic share, compared to a net loss of $23.4 million, or $(0.46) per basic share, in the same period last year. However, for the nine months, net revenue rose to $2.21 billion from $2.06 billion, a 7.3% increase, but the company posted a net loss attributable to Guess?, Inc. of $1.0 million, or $(0.03) per basic share, a slight improvement from the $21.0 million net loss, or $(0.42) per basic share, in the prior nine-month period. Operating earnings for the nine months dramatically decreased to $7.96 million from $70.16 million year-over-year, a 88.7% decline, primarily due to increased selling, general and administrative expenses and asset impairment charges. Cash and cash equivalents decreased to $154.2 million as of November 1, 2025, from $187.7 million at February 1, 2025. A significant strategic development is the proposed take-private transaction with Authentic Brands Group LLC, announced on August 20, 2025, where Guess? shareholders (excluding certain rolling stockholders) would receive $16.75 per share in cash.

Why It Matters

This filing reveals a critical juncture for GUESS? as it navigates a proposed take-private transaction with Authentic Brands Group, offering shareholders $16.75 per share. While the company showed a strong turnaround in Q3 net earnings, the nine-month period still reflects a net loss and a significant drop in operating earnings, raising questions about underlying operational efficiency. For investors, the deal price sets a clear valuation, but the operational challenges could impact the long-term value of the remaining operating assets. Employees and customers might see shifts in brand strategy and store operations under the new ownership structure, potentially impacting job security and product availability in a highly competitive fashion market.

Risk Assessment

Risk Level: high — The risk level is high due to the proposed take-private transaction with Authentic Brands Group LLC, which introduces significant execution risk and uncertainty regarding the future structure and operations of GUESS?. The company's nine-month operating earnings plummeted by 88.7% to $7.96 million from $70.16 million, indicating substantial operational challenges. Additionally, asset impairment charges increased to $13.18 million for the nine months ended November 1, 2025, from $4.51 million in the prior year, signaling potential issues with asset valuation.

Analyst Insight

Investors holding GUESS? common stock should evaluate the $16.75 per share cash offer from Authentic Brands Group LLC against their own valuation of the company and market alternatives. Given the operational decline reflected in the nine-month earnings and the impending take-private, selling shares at or near the offer price appears to be a prudent move for most public shareholders.

Financial Highlights

debt To Equity

N/A

revenue

$2.21 billion

operating Margin

N/A

total Assets

$3.01 billion

total Debt

$1.04 billion

net Income

-$1.0 million

eps

-$0.03

gross Margin

41.7%

cash Position

$154.2 million

revenue Growth

+7.3%

Revenue Breakdown

Key Numbers

• $791.4M — Net Revenue (Q3 2025) (Increased from $738.5M in Q3 2024, a 7.2% increase.)
• $25.6M — Net Earnings Attributable to Guess?, Inc. (Q3 2025) (Swung from a net loss of $23.4M in Q3 2024.)
• $(1.0M) — Net Loss Attributable to Guess?, Inc. (YTD 2025) (Improved from a net loss of $21.0M in YTD 2024.)
• $7.96M — Earnings from Operations (YTD 2025) (Decreased significantly from $70.16M in YTD 2024, an 88.7% decline.)
• $154.2M — Cash and Cash Equivalents (Nov 1, 2025) (Decreased from $187.7M at Feb 1, 2025.)
• $13.18M — Asset Impairment Charges (YTD 2025) (Increased from $4.51M in YTD 2024.)
• $16.75 — Proposed Take-Private Share Price (Cash offer per share to Guess? shareholders by Authentic Brands Group LLC.)

Key Players & Entities

• GUESS?, Inc. (company) — registrant in the 10-Q filing
• Authentic Brands Group LLC (company) — partner in the proposed take-private transaction
• New York Stock Exchange (regulator) — exchange where GUESS? common stock is registered
• $16.75 (dollar_amount) — per share cash offer in the proposed take-private transaction
• November 1, 2025 (date) — end of the reported quarterly period
• August 20, 2025 (date) — date of the announcement of the Merger Agreement
• rag & bone (company) — fashion brand acquired by GUESS? on April 2, 2024
• Delaware (regulator) — state of incorporation for GUESS?, Inc.

FAQ

Risk Factors

• Competition and Changing Consumer Preferences [high — market]: The company faces intense competition in the apparel industry. Shifts in fashion trends and consumer preferences can significantly impact demand for GUESS? products. Failure to adapt to these changes could lead to reduced sales and profitability.
• Supply Chain Disruptions [medium — operational]: Global supply chain disruptions, including those related to manufacturing, logistics, and raw material availability, can affect inventory levels and product delivery. This was evident in the increase in inventories to $692.3 million from $562.6 million.
• Impact of Take-Private Transaction [high — financial]: The proposed take-private transaction with Authentic Brands Group introduces uncertainty regarding future operations and shareholder value. The transaction is valued at $16.75 per share, which may not reflect the long-term potential for all shareholders.
• Compliance with Evolving Regulations [low — regulatory]: The company must comply with various regulations related to product safety, environmental standards, and international trade. Changes in these regulations could increase compliance costs and operational complexities.
• Increased Operating Expenses [high — operational]: The company experienced a significant 88.7% decline in operating earnings year-over-year, largely due to increased selling, general and administrative expenses. These higher costs, totaling $904.2 million for the nine months, pressure profitability.
• Asset Impairment Charges [medium — financial]: The company recorded substantial asset impairment charges of $13.18 million for the nine months ended November 1, 2025, an increase from $4.51 million in the prior year. These charges reflect a decline in the value of certain assets, impacting net income.

Industry Context

The apparel industry is characterized by intense competition, rapidly changing fashion trends, and a strong reliance on global supply chains. Brands must effectively manage inventory, adapt to consumer preferences, and navigate economic uncertainties. The rise of e-commerce and sustainability concerns are also significant factors shaping the competitive landscape.

Regulatory Implications

GUESS? Inc. must adhere to various regulations including those concerning product safety, labeling, and international trade compliance. Changes in trade policies or environmental regulations could impact sourcing, manufacturing costs, and market access, requiring ongoing vigilance and adaptation.

What Investors Should Do

1. Monitor the progress and outcome of the proposed take-private transaction with Authentic Brands Group.
2. Analyze the drivers behind the significant increase in SG&A expenses and asset impairment charges.
3. Evaluate the company's inventory management strategy, given the substantial increase in inventory levels.
4. Assess the company's liquidity and debt levels in light of the cash position and upcoming financial obligations.

Key Dates

• 2025-08-20: Announcement of proposed take-private transaction — Indicates a significant shift in the company's ownership structure and valuation, with a cash offer of $16.75 per share.
• 2025-11-01: End of third quarter and nine-month period — Reporting period for the financial results, showing mixed performance with revenue growth but a net loss for the nine months.
• 2025-02-01: Beginning of fiscal year 2025 — Reference point for year-to-date financial performance and cash position comparison.

Glossary

Net revenue

The total revenue generated from sales after deducting returns, allowances, and discounts. (Key indicator of the company's top-line performance and sales volume.)

Net earnings (loss) attributable to Guess?, Inc.

The profit or loss remaining for the company's shareholders after all expenses, taxes, and noncontrolling interests have been accounted for. (Measures the company's profitability for its common stockholders.)

Operating earnings

Profit generated from a company's core business operations before interest and taxes. (Indicates the profitability of the company's primary business activities.)

Asset impairment charges

A charge taken when the carrying amount of an asset exceeds its recoverable amount, indicating a permanent decline in value. (Reflects a reduction in the value of company assets, negatively impacting net income.)

Cash and cash equivalents

Highly liquid investments with maturities of three months or less from the date of purchase. (Indicates the company's short-term liquidity and ability to meet immediate obligations.)

Take-private transaction

A transaction where a public company is acquired by a private entity, ceasing to be publicly traded. (Represents a significant strategic event that will alter the company's ownership and reporting structure.)

Year-Over-Year Comparison

Compared to the prior year's filing, GUESS? Inc. shows a mixed performance. While net revenue has seen a consistent increase of approximately 7.2-7.3% for both the three and nine-month periods, profitability has diverged. The third quarter demonstrated a strong turnaround with net earnings swinging from a loss to a significant profit. However, the nine-month period still reflects a net loss, albeit improved from the previous year. A critical concern is the dramatic 88.7% decrease in operating earnings, driven by higher selling, general, and administrative expenses and increased asset impairment charges, which rose from $4.51 million to $13.18 million. The company's cash position has also declined from $187.7 million to $154.2 million.

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share GES New York Stock Exchange

Filing Documents

• ges-20251101.htm (10-Q) — 2991KB
• a10q-q3fy26ex311.htm (EX-31.1) — 10KB
• a10q-q3fy26ex312.htm (EX-31.2) — 10KB
• a10q-q3fy26ex321.htm (EX-32.1) — 6KB
• a10q-q3fy26ex322.htm (EX-32.2) — 5KB
• 0000912463-25-000086.txt ( ) — 16309KB
• ges-20251101.xsd (EX-101.SCH) — 100KB
• ges-20251101_cal.xml (EX-101.CAL) — 159KB
• ges-20251101_def.xml (EX-101.DEF) — 621KB
• ges-20251101_lab.xml (EX-101.LAB) — 1160KB
• ges-20251101_pre.xml (EX-101.PRE) — 895KB
• ges-20251101_htm.xml (XML) — 2996KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) 1 Condensed Consolidated Balance Sheets as of November 1, 2025 and February 1, 2025 1 Condensed Consolidated Statements of Income (Loss) — Three and Nine Months Ended November 1, 2025 and November 2, 2024 2 Condensed Consolidated Statements of Comprehensive Income (Loss) — Three and Nine Months Ended November 1, 2025 and November 2, 2024 3 Condensed Consolidated Statements of Cash Flows — Nine Months Ended November 1, 2025 and November 2, 2024 4 Condensed Consolidated Statements of Stockholders' Equity — Three and Nine Months Ended November 1, 2025 and November 2, 2024 5 Notes to Condensed Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 51 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 80 Item 4.

Controls and Procedures

Controls and Procedures 81

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 82 Item 1A.

Risk Factors

Risk Factors 82 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 86 Item 5. Other Information 87 Item 6. Exhibits 88 i Table of Contents WHERE YOU CAN FIND MORE INFORMATION Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, Securities and Exchange Commission filings and public conference calls and webcasts. We may also use our LinkedIn page (www.linkedin.com/company/guess-) and our website (www.guess.com) as a means of disclosing information about the Company (as defined below), our products, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and other matters as well as for complying with our disclosure obligations under Regulation FD. The information we post through these channels may be deemed material. Accordingly, investors should monitor these accounts and our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time on our investor relations website. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. ii Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

ITEM 1. Financial Statements. GUESS?, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) Nov 1, 2025 Feb 1, 2025 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 154,236 $ 187,696 Accounts receivable, net 407,778 391,161 Inventories 692,266 562,649 Prepaid expenses 72,377 67,275 Other current assets 26,553 40,589 Total current assets 1,353,210 1,249,370 Property and equipment, net 249,515 240,114 Goodwill 35,629 33,157 Deferred income tax assets 187,291 171,818 Restricted cash 820 796 Operating lease right-of-use assets 927,868 839,879 Other assets 252,163 231,544 TOTAL ASSETS $ 3,006,496 $ 2,766,678 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of borrowings and finance lease obligations $ 26,710 $ 40,948 Accounts payable 332,913 318,712 Accrued expenses and other current liabilities 289,189 294,700 Current portion of operating lease liabilities 183,094 176,972 Total current liabilities 831,906 831,332 Convertible senior notes due 2028, net 344,535 336,527 Long-term debt and finance lease obligations 299,542 150,668 Long-term operating lease liabilities 795,308 715,755 Other long-term liabilities 168,834 181,621 Total liabilities 2,440,125 2,215,903 Redeemable noncontrolling interests 444 368 Commitments and contingencies (Note 14) Stockholders' equity: Preferred stock, $ .01 par value. Authorized 10,000,000 shares; no shares issued and outstanding — — Common stock, $ .01 par value. Authorized 150,000,000 shares; issued 142,771,253 and 142,771,253 shares; outstanding 52,151,599 and 51,691,595 shares as of November 1, 2025 and February 1, 2025, respectively 522 517 Paid-in capital 617,295 605,036 Retained earnings 1,244,744 1,289,233 Accumulated other comprehensive loss ( 129,694 ) ( 159,196 ) Treasury stock, 90,619,654 and 91,079,658 shares as of November 1, 2025 and February 1, 2025, respectively ( 1,224,368 ) ( 1,230,583 ) G

View Full Filing

View this 10-Q filing on SEC EDGAR