How did Guess's revenue and expenses trends shift in Q3 2025 compared to previous quarters?

Guess's revenue and expenses trends in Q3 2025 showed a notable shift compared to previous quarters, reflecting both opportunities and challenges for the company. 1. **Revenue Trend Shift**: - **Q3 2025 Performance**: Guess reported a 4.6% year-on-year increase in sales for Q4 CY2024, reaching $932.3 million. This growth was primarily driven by the rag & bone acquisition and positive momentum in the wholesale businesses in Europe and the Americas, along with increased licensing revenues. - **Comparison with Previous Quarters**: While Q4 showed strong growth, Guess missed analysts’ revenue expectations by 1.7% in the previous quarter (Q3 CY2024), reporting revenues of $738.5 million, up 13.4% year-on-year. This suggests a slowdown in growth from the previous quarter, but a strong recovery in Q4. - **Regional Insights**: Growth in Q4 was notable in Europe and the Americas, with revenues increasing by 2%. However, the Asia segment experienced a decline, and the direct-to-consumer business missed expectations due to slower traffic in North America and Asia. 2. **Expense Trend Shift**: - **Operating Margin**: Guess reported an operating margin of 11.1% in Q4, down from 16.3% in the same quarter the previous year. This decline indicates increased costs relative to sales, which could be a concern for profitability. - **Free Cash Flow Margin**: The free cash flow margin decreased from 30.1% to 17.2% compared to the same quarter the previous year. This trend suggests a reduction in liquidity and potential cash flow pressures. - **Strategic Initiatives**: To address these challenges, Guess announced plans to optimize its portfolio, which is expected to unlock approximately $30 million in operating profit by FY27. This indicates a proactive approach to managing expenses and improving profitability in the future. |code|Ticker|Name|Date|Total Revenue|Total Expenses|market_code| |---|---|---|---|---|---|---| |GES|GES.N|Guess|2025 Q1|5.91943E8||169| |GES|GES.N|Guess|2025 Q2|7.3256E8||169| |GES|GES.N|Guess|2025 Q3|7.38518E8||169| |GES|GES.N|Guess|2025 Q4|9.32252E8||169| In conclusion, Guess's revenue showed a strong recovery in Q4 2025, driven by strategic initiatives and positive momentum in key regions. However, the company faced challenges in maintaining profitability and cash flow margins, which it plans to address through portfolio optimization and other strategic measures.