Guess 2026 Q1 Earnings Misses Targets, Net Income Declines 296.4%

Guess (GES) reported its fiscal 2026 Q1 earnings on Jun 05th, 2025. The company posted a net loss of $31.24 million, a sharp decline from the $15.91 million profit in 2025 Q1. This significant underperformance resulted in a loss per share of $0.65, contrasting with the previous year's profit of $0.24 per share. Despite revenue growth of 9.4% reaching $647.80 million, Guess's earnings fell short of expectations. Guidance for the full year suggests modest growth, with expected revenue increases between 5.5% and 7.4%, and adjusted EPS projected between $1.32 and $1.64, slightly below market predictions.

Revenue
In the first quarter of fiscal 2026, Guess achieved a total revenue of $647.80 million, marking a 9.4% increase from $591.94 million in the same period last year. This growth was driven primarily by product sales, which totaled $622.81 million. Additionally, net royalties contributed $25 million, culminating in the overall revenue figure.

Earnings/Net Income
Guess reported a loss of $0.65 per share in Q1 2026, transitioning from a profit of $0.24 per share in the previous year, representing a 370.8% negative change. The net loss was $31.24 million, a significant decline of 296.4% compared to the net income of $15.91 million in Q1 2025. The EPS indicates a challenging quarter for the company.

Price Action
The stock price of Guess has edged down 1.17% during the latest trading day, decreased by 1.26% over the most recent full trading week, and experienced a slight increase of 0.37% month-to-date.

Post-Earnings Price Action Review
The investment strategy of purchasing Guess shares following a revenue miss and holding for 30 days has proven to be ineffective, delivering an 8.22% return. This performance significantly underperformed the benchmark, resulting in a substantial excess loss of 70.04%. The strategy's Sharpe ratio stands at a mere 0.03, indicating poor risk-adjusted returns, which further highlights its ineffectiveness. Investors should reconsider this approach, as it has consistently failed to deliver positive outcomes, underscoring the need for a more robust investment strategy that can better navigate market fluctuations and optimize returns.

CEO Commentary
Carlos E. Alberini, CEO & Director, expressed optimism about the company’s performance, emphasizing that Q1 results exceeded expectations in key financial areas. He cited a 9% revenue increase in U.S. dollars, largely due to the acquisition of rag & bone, as a significant growth driver. However, Alberini acknowledged ongoing challenges in Asia and retail traffic, indicating the search for a partner in that region. Strategic focuses remain on enhancing retail productivity and boosting brand awareness through increased marketing efforts, with an optimistic outlook for growth and operational efficiency.

Guidance
Looking ahead, Guess anticipates full-year revenue growth between 5.5% and 7.4%, with adjusted EPS projected to range from $1.32 to $1.64. For the second quarter, the company expects revenue growth between 2.9% and 4.7%. Planned capital expenditures are around $65 million, with free cash flow estimated at approximately $55 million. The outlook considers the impact of tariffs, with strategic emphasis on marketing and productivity initiatives in the latter half of the year.

Additional News
Guess has recently engaged in several significant non-earnings activities. On April 3, 2025, the company announced the appointment of Alberto Toni as its Chief Financial Officer, enhancing its leadership team. Additionally, Guess has entered into a notable partnership with Marcolin, a leading eyewear manufacturer, to develop an exclusive eyewear line under the rag & bone brand as of May 22, 2025. This collaboration aims to expand Guess's product offerings and market reach. Furthermore, on April 10, 2025, Guess, alongside WHP Global, announced a strategic partnership with Sequel, a division of Timex Group, to develop a watch business for the rag & bone brand, further diversifying its accessory portfolio.