"Rag & Bone’s top line was short of our plans for the quarter, though some of that relates to a shift in the timing of wholesale shipments, which we now expect in Q4. Overall, the business remains on a solid trajectory and its direct-to-consumer trends were particularly strong in October."
— Dennis Secor
03Detailed Report
GES
Company GES
Period
Q3 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 10, 2026
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Executive Summary
Guess Inc delivered a solid top-line increase in QQ3 2025, with revenue of $738.5 million, up 13.4% year over year, largely driven by the Rag & Bone acquisition and stronger European wholesale performances. Management emphasized that shipments in Europe occurred earlier than expected, contributing roughly $10 million to Q4 revenue, and reiterated a strategy to leverage the company’s platform to expand multiple brands beyond Guess. However, the quarter also underscored profitability headwinds from higher marketing investments, channel mix, and currency effects, resulting in GAAP net income of -$23.4 million and an adjusted operating margin of 5.8%. The company reaffirmed a forward-looking framework targeting mid-to-high single-digit growth in full-year revenue and a path to double-digit operating margins as platform initiatives mature.
Key takeaways include: (1) a diversified growth engine centered on Rag & Bone, Guess Jeans, and European wholesale; (2) a disciplined investment cadence in marketing and brand-building to drive mid-term top-line momentum, with a heavy emphasis on social media, collaborations, and loyalty programs; (3) meaningful currency headwinds and freight-cost pressures that complicate margin recovery in the near term; and (4) a focused plan to reclaim U.S. market momentum through pricing actions, customer engagement, and an optimized store footprint. Investors should monitor progression of Rag & Bone profitability, the rollout of Guess Jeans in the U.S., currency trends, and the effectiveness of the marketing engine as indicators of earnings power re-acceleration.
Key Performance Indicators
Revenue
Increasing
738.52M
QoQ: 0.81% | YoY: 13.41%
Gross Profit
Increasing
321.88M
43.58% margin
QoQ: 0.60% | YoY: 10.55%
Operating Income
Decreasing
42.28M
QoQ: -11.51% | YoY: -22.82%
Net Income
Decreasing
-23.40M
QoQ: -120.65% | YoY: -142.00%
EPS
Decreasing
-0.62
QoQ: -195.24% | YoY: -159.62%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability snapshot (USD, QoQ vs YoY):
- Revenue: $738.5m (+13.41% YoY; +0.81% QoQ)
- Gross profit: $321.9m (+10.55% YoY; +0.60% QoQ)
- Gross margin: 43.58% (flat vs prior year, modest expansion guidance implied by IMU trend)
- Operating income: $42.28m (-22.82% YoY; -11.51% QoQ)
- Net income: -$23.40m (-142.00% YoY; -120.65% QoQ)
- Diluted EPS: -$0.47 (adjusted: $0.34 in Q3, vs $0.49 prior year)
- Adjusted EBITDA: $16.60m (EBITDA margin ~2.25%)
- Adjusted SG&A: $279.0m (+~20% YoY), driven by Rag & Bone and heightened marketing
Balance sheet and cash flow:
- Cash & equivalents: $141.0m; Total debt: $1.473B; Net debt: $1.332B
- Inventories: $676m (+20% YoY; ~8 pp in transit inventory related to in-transit shipments)
- Free cash flow: -$105.36m; Operating cash flow: -$83.29m
- Working capital and capex: Capex ~$22.07m; Cash flow from financing activities: +$33.46m; Liquidity: $486m available capacity
Guidance and outlook:
- Full-year revenue growth guidance: 7%–8%; Revenue around or slightly below $3.0B
- Adjusted EPS guidance: $1.85–$2.00 for the year
- Q4 revenue growth: 2.2%–5.4%; Adjusted operating margin 12.2%–13.0%; Adjusted EPS $1.37–$1.52
- Key tailwinds: Europe wholesale momentum; new Guess Jeans initiative in Europe and U.S.; early shipments partially offset by stronger USD and higher freight costs
- Key headwinds: USD strength, freight costs, softening U.S. and Asia retail traffic, currency translation impact (~$45m revenue and ~$10m op-profit for the year)
Overall view: The QQ3 2025 results reflect a transition phase where Guess continues to invest in a platform-driven growth model, balancing near-term profitability pressures against a longer-term improvement trajectory driven by Rag & Bone integration, geographic expansion, and brand elevation across multiple channels.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
738.52M
13.41%
0.81%
Gross Profit
321.88M
10.55%
0.60%
Operating Income
42.28M
-22.82%
-11.51%
Net Income
-23.40M
-142.00%
-120.65%
EPS
-0.62
-159.62%
-195.24%
Key Financial Ratios
Gross Profit Margin
Good
43.60%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Fair
5.72%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Weak
-0.03%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
-0.01%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.05%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
1.54
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
High Risk
3.27
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Negative
-9.21x
Negative earnings make P/E ratio not meaningful
Price to Book
Fair Value
1.91x
Price-to-book ratio reasonable for profitable companies
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