Guess 2026 Q1 Earnings Disappointing as Net Income Dives

Guess (GES) reported its fiscal 2026 Q1 earnings on June 11th, 2025. The company experienced a significant downturn, swinging to a loss of $0.65 per share in 2026 Q1 from a profit of $0.24 per share in 2025 Q1. This represented a 370.8% negative change. Despite a 9.4% increase in total revenue, reaching $647.80 million, Guess faced a net loss of $31.24 million in 2026 Q1. The loss marks a 296.4% deterioration from the net income of $15.91 million achieved in 2025 Q1. The company's guidance for the full fiscal year 2026 projects a revenue increase between 5.5% and 7.4%, with GAAP EPS expected to range from $0.87 to $1.11.

Revenue
Guess's revenue for fiscal 2026 Q1 reached $647.80 million, representing a 9.4% increase from the previous year. Product sales were robust, bringing in $622.81 million, while net royalties contributed $25 million. This growth was supported by successful segment performances across various business areas.

Earnings/Net Income
Guess reported a net loss of $31.24 million for 2026 Q1, a stark contrast to the $15.91 million profit recorded in the previous year. The EPS swung from a $0.24 profit to a $0.65 loss, indicating a challenging quarter for the company’s profitability.

Post-Earnings Price Action Review
The strategy of purchasing GES stock during revenue misses and holding for 30 days has historically yielded a 34.24% return, which pales in comparison to the benchmark return of 88.76%. This approach has exhibited poor risk-adjusted returns, with a low Sharpe ratio of 0.11 and a severe maximum drawdown of -72.08%, underscoring its high-risk nature. With a compound annual growth rate (CAGR) of 6.10% and a volatility of 55.43%, the strategy has faced significant fluctuations and inconsistent outcomes. These factors suggest that a buy-and-hold strategy might be more reliable for investors, as it avoids the pitfalls of short-term performance variability and provides steadier returns over time.

CEO Commentary
Carlos Alberini, Chief Executive Officer, expressed optimism about the company's performance, noting a 9% revenue growth in U.S. dollars and 12% in constant currency. He attributed this to the integration of rag & bone and strong wholesale business results. Alberini highlighted disciplined expense management as a key factor in narrowing the quarterly loss and emphasized plans to leverage the company's global infrastructure for future growth.

Guidance
Guess anticipates a revenue increase between 5.5% and 7.4% for the full fiscal year 2026. The company expects GAAP EPS to range from $0.87 to $1.11. For the second quarter, net revenue growth is projected at 2.9% to 4.7%, with GAAP operating margins between 2.5% and 3.3%, and adjusted margins from 4.4% to 5.1%.

Additional News
Guess has been active in strategic partnerships and leadership changes. Recently, the company announced a partnership with WHP Global and Marcolin to expand its eyewear business, leveraging the rag & bone brand. Additionally, Guess appointed Alberto Toni as the new Chief Financial Officer, succeeding interim CFO Dennis Secor. The company also continued its share buyback program, repurchasing $60.3 million worth of shares in fiscal 2025, with $139.8 million remaining under the approved program. These moves reflect Guess's efforts to strengthen its market presence and financial position.