- **Q1 Revenue Beat**: 9% YoY growth ($648M) driven by rag &amp; bone (9% CC growth) and European wholesale (mid-teens).
- **Margin Challenges**: Gross margin down 200bps to 39.9% due to business mix and promotions.
- **Rag &amp; bone Outlook**: FY2026 target of $320M+ with new stores and licensed products.
- **Retail Recovery**: Americas Retail comps improving with women's apparel up 3% and conversion gains.
- **Inventory Management**: $50M investment in early shipments to mitigate supply chain risks.

**【CEO Opening Remarks】**
- Q1 FY2026 revenue grew 9% YoY ($648M), driven by rag &amp; bone acquisition (9% constant currency growth) and strong European wholesale performance.
- Core Guess business grew 3% in constant currency, with European wholesale up mid-teens and Americas wholesale up 63% (rag &amp; bone integration).
- Gross margin declined 200bps to 39.9% due to business mix (lower royalties, higher wholesale contribution) and promotional activity.
- Adjusted operating loss narrowed to $26M (vs. $59M last year), with EPS of -$0.44 (vs. -$0.27 last year).

**【CFO Financial Details】**
- Inventory up 15% YoY ($638M) due to early shipments to mitigate Red Sea crisis risks.
- Americas Retail comp decline of 10% (constant currency), offset by rag &amp; bone growth and improved conversion.
- Q2 FY2026 revenue expected to grow 2.9%-4.7% YoY, with full year guidance of 5.5%-7.4% growth.
- Adjusted operating margin projected at 4.4%-5.1%, with EPS of $1.32-$1.64.

**【Q&A Highlights】**
- **Rag &amp; bone growth**: Q1 exceeded expectations, with wholesale shipments up and direct-to-consumer sales strong. FY2026 target of $320M+ includes new store openings and licensed product categories (e.g., handbags, fragrances).
- **Americas Retail recovery**: Q1 comps improved sequentially, with women's apparel up 3% and conversion rates rising. Pricing adjustments and product assortment changes driving momentum.
- **Inventory strategy**: $50M working capital investment in early shipments to protect supply chain; expect normalization post-Red Sea crisis.
- **Guess Jeans progress**: Strong European wholesale growth, new store openings (e.g., Tokyo, LA), and marketing initiatives targeting younger consumers.

Guess?, Inc. (GES) Q1 2026 Earnings Call Transcript

- **Q4 Revenue Beat**: $932M (+5% YoY), driven by rag &amp; bone and core Guess growth.
- **FY26 Outlook**: 3.9%-6.2% revenue growth, $1.32-$1.76 EPS, with $55M free cash flow.
- **Strategic Moves**: Close 20 North American stores, transition Greater China to third-party, expand Guess Jeans in U.S. and Japan.
- **Tariff Resilience**: 75% of business outside U.S. mitigates tariff impact.
- **Rag &amp; Bone Momentum**: Q4 e-commerce strong, 4 new U.S. stores planned for FY26.


**【CEO Opening Remarks】**
- **Revenue Growth**: Q4 revenue reached $932M (+5% YoY), driven by rag &amp; bone acquisition and core Guess business. Full-year revenue grew 8% to $3B.
- **Strategic Acquisitions**: Completed acquisition of rag &amp; bone, launched Guess Jeans globally, and signed a partnership with Tata Group for India expansion.
- **Challenges**: Faced supply chain disruptions (Red Sea crisis), currency headwinds, and U.S. dollar strength. Americas retail comps declined 14% due to traffic and conversion issues.
- **Future Focus**: 
  - Optimize North American retail fleet by closing 20 stores by FY26 end.
  - Transition Greater China business to third-party management to improve profitability.
  - Expand Guess Jeans in U.S. and Japan, with new stores in Tokyo and West Hollywood.
  - Launch CRM system in Europe and test new store concepts for improved productivity.

**【CFO Financial Review】**
- **Q4 Financials**: 
  - Adjusted operating profit: $107M (11.4% margin).
  - Adjusted EPS: $1.48 (within guidance range).
  - Gross margin: 44.1% (down 130bps YoY due to markdowns and currency).
  - SG&amp;A: $305M (+11% YoY) driven by marketing investments and rag &amp; bone integration.
- **FY26 Outlook**: 
  - Revenue growth: 3.9%-6.2%.
  - Operating margin: 4.5%-5.4%.
  - EPS: $1.32-$1.76.
  - Free cash flow: ~$55M.
- **Tariff Impact**: 75% of business outside U.S. shielded from tariffs. 2/3 of U.S. business in outlet channels can be re-sourced to Latin America.

**【Q&A Highlights】**
- **Rag &amp; Bone Growth**: Q4 e-commerce sales strong, with 9% organic growth contribution. Plans to open 4 U.S. stores and 2 European stores in FY26.
- **Americas Retail Strategy**: 
  - Launch exclusive products for DTC business with 50% open-to-buy flexibility.
  - Test new store clustering model based on customer demographics and purchase history.
  - Introduce entry-price point products to appeal to price-sensitive customers.
- **Guess Jeans Expansion**: 
  - Japan flagship store and Melrose Ave store opening in Q2.
  - Collaborate with VERDY for Japanese market engagement.
  - Wholesale distribution expanding in Europe, with Italy as top performer.
- **Outerwear Integration**: Direct control of outerwear business drove double-digit growth in Americas Wholesale.


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Guess (GES)-26 Aug 21-2022 Q2 Earnings call transcript

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Guess (GES)-2 Dec 20-2021 Q3 Earnings call transcript

Guess (GES)-2 Sep 20-2021 Q2 Earnings call transcript

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Guess (GES)-26 Nov 19-2020 Q3 Earnings call transcript

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Guess (GES)-20 Mar 19-2019 Q4 Earnings call transcript

Guess (GES)-28 Nov 18-2019 Q3 Earnings call transcript

Guess (GES)-29 Aug 18-2019 Q2 Earnings call transcript

Guess (GES)-30 May 18-2019 Q1 Earnings call transcript

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