Guess? revenues rise as it prepares for go-private deal

Guess?, Inc. has announced a 6 percent increase in revenue to 772.9 million dollars for its second quarter of fiscal year 2026, up from 732.6 million dollars in the same period last year. The revenue rise, driven by strong performance in Europe and North America, comes as the company moves towards a proposed take-private transaction.

The Los Angeles-based company’s second quarter revenues were ahead of expectations, primarily due to stronger comparable store sales in its European business and a continued improvement in its Americas retail segment. In constant currency, net revenue increased by 3 percent.

Proposed take-private transaction

On August 20, 2025, Guess? announced a definitive agreement with Authentic Brands Group (Authentic) for a proposed take-private transaction. Under the deal, certain existing shareholders, including chief executive officer Carlos Alberini and other members of the Marciano family, will partner with Authentic to acquire the company’s intellectual property and operating assets.

The transaction, which is subject to shareholder approval, is expected to close in the fourth quarter of fiscal year 2026. Upon completion, Guess? common stock will no longer be listed on any public market, with shareholders receiving 16.75 dollars per share in cash. Due to the pending transaction, the company has suspended its practice of providing and updating financial guidance for fiscal year 2026.

European segment drives performance

Europe was a key driver of growth, with revenues increasing by 14 percent in dollars and 9 percent in constant currency. Retail comparable sales in Europe, which include e-commerce, rose by 11 percent in dollars. In contrast, Americas retail revenues declined by 1 percent, with comparable sales falling by 5 percent.

Meanwhile, Americas wholesale revenues decreased by 11 percent, while Asia revenues grew by 3 percent. Licensing revenues declined by 10 percent in both dollars and constant currency.

Profitability and margins show decline

Despite the revenue growth, GAAP earnings from operations for the quarter decreased by 62.1 percent to 18.1 million dollars, from 47.8 million dollars in the prior-year quarter. GAAP operating margin for the quarter fell to 2.3 percent, from 6.5 percent in the same period last year.

The decline in operating margin was attributed to higher expenses, including store costs and advertising, costs related to the proposed transaction, unfavorable business mix, and higher markdowns.

Net earnings for the quarter were 6.2 million dollars, a significant improvement from a net loss of 10.6 million dollars in the same period last year. The company’s GAAP diluted net earnings per share were 12 cents.

In his statement, Alberini said the company managed margins and expenses well, which, coupled with revenue growth, led to GAAP earnings per share within expectations.

This article was created with the help of AI.