Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October~~July 29, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-11893

GUESS?, INC.

(Exact name of registrant as specified in its charter)


Delaware			95-3679695
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

Strada Regina 44
Bioggio, Switzerland CH-6934
(Address of principal executive offices and zip code)

+41 91 809 5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

GES

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒☐

Accelerated filer

☐☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of ~~November 28, 2022,~~August 25, 2023, the registrant had ~~54,447,857~~53,587,282 shares of Common Stock, $0.01 par value per share, outstanding.

Table of Contents

GUESS?, INC.

FORM 10-Q

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1

	Condensed Consolidated Balance Sheets as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022~~28, 2023	1

	Condensed Consolidated Statements of Income — Three and ~~Nine~~ Six Months Ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021~~2022	2

	Condensed Consolidated Statements of Comprehensive Income — Three and ~~Nine~~Six Months Ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021~~2022	3

	Condensed Consolidated Statements of Cash Flows — ~~Nine~~Six Months Ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021~~2022	4

	Condensed Consolidated Statements of Stockholders’ Equity — Three and ~~Nine~~Six Months Ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021~~2022	5

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3637

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6163

Item 4.	Controls and Procedures	6465

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	6566

Item 1A.	Risk Factors	6566

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6768

Item 5 .	Other Information	69



Item 6.	Exhibits	6870

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements.

GUESS?, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


		Oct 29, 2022		Jan 29, 2022			Jul 29, 2023		Jan 28, 2023
		(unaudited)					(unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	174,065	$	415,565	Cash and cash equivalents	$	302,626	$	275,765

Accounts receivable, net	Accounts receivable, net	319,342		328,856		Accounts receivable, net	318,364		341,939
Inventories	Inventories	574,574		462,295		Inventories	554,425		510,899
Other current assets	Other current assets	82,553		77,378		Other current assets	84,654		83,102
Total current assets	Total current assets	1,150,534		1,284,094		Total current assets	1,260,069		1,211,705
Property and equipment, net	Property and equipment, net	231,024		228,765		Property and equipment, net	237,928		240,355
Goodwill	Goodwill	32,386		34,885		Goodwill	34,585		34,277
Deferred income tax assets	Deferred income tax assets	151,412		165,120		Deferred income tax assets	162,967		158,403

Operating lease right-of-use assets	Operating lease right-of-use assets	614,705		685,799		Operating lease right-of-use assets	651,722		636,148

Other assets	Other assets	136,563		156,965		Other assets	141,888		144,560
		$	2,316,624	$	2,555,628		$	2,489,159	$	2,425,448

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of borrowings and finance lease obligations	Current portion of borrowings and finance lease obligations	$	39,626	$	43,379	Current portion of borrowings and finance lease obligations	$	37,507	$	40,380
Accounts payable	Accounts payable	322,967		325,797		Accounts payable	308,614		289,442
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	210,982		253,182		Accrued expenses and other current liabilities	226,265		263,038
Convertible senior notes due 2024, net						Convertible senior notes due 2024, net	114,899		—
Current portion of operating lease liabilities	Current portion of operating lease liabilities	159,152		195,516		Current portion of operating lease liabilities	170,020		170,192
Total current liabilities	Total current liabilities	732,727		817,874		Total current liabilities	857,305		763,052
Convertible senior notes, net		298,731		270,595
Convertible senior notes due 2024, net						Convertible senior notes due 2024, net	—		298,931
Convertible senior notes due 2028, net						Convertible senior notes due 2028, net	266,110		—
Long-term debt and finance lease obligations	Long-term debt and finance lease obligations	153,717		60,970		Long-term debt and finance lease obligations	146,043		95,921

Long-term operating lease liabilities	Long-term operating lease liabilities	519,594		582,757		Long-term operating lease liabilities	532,495		528,236
Other long-term liabilities	Other long-term liabilities	150,733		160,289		Other long-term liabilities	152,812		157,403
Total liabilities	Total liabilities	1,855,502		1,892,485		Total liabilities	1,954,765		1,843,543
Redeemable noncontrolling interests	Redeemable noncontrolling interests	8,434		9,500		Redeemable noncontrolling interests	573		9,154

Commitments and contingencies (Note 13)	Commitments and contingencies (Note 13)					Commitments and contingencies (Note 13)

Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding	Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding	—		—		Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding	—		—
Common stock, $.01 par value. Authorized 150,000,000 shares; issued 142,771,598 and 142,771,946 shares; outstanding 54,443,172 and 62,697,032 shares as of October 29, 2022 and January 29, 2022, respectively		544		627
Common stock, $.01 par value. Authorized 150,000,000 shares; issued 142,771,253 and 142,771,253 shares; outstanding 53,587,282 and 54,609,786 shares as of July 29, 2023 and January 28, 2023, respectively						Common stock, $.01 par value. Authorized 150,000,000 shares; issued 142,771,253 and 142,771,253 shares; outstanding 53,587,282 and 54,609,786 shares as of July 29, 2023 and January 28, 2023, respectively	536		546
Paid-in capital	Paid-in capital	531,663		565,024		Paid-in capital	514,760		532,398
Retained earnings	Retained earnings	1,194,038		1,158,664		Retained earnings	1,274,835		1,276,857
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(163,640)		(135,549)		Accumulated other comprehensive loss	(132,557)		(134,073)
Treasury stock, 88,328,426 and 80,074,914 shares as of October 29, 2022 and January 29, 2022, respectively		(1,143,777)		(966,108)
Treasury stock, 89,183,971 and 88,161,467 shares as of July 29, 2023 and January 28, 2023, respectively						Treasury stock, 89,183,971 and 88,161,467 shares as of July 29, 2023 and January 28, 2023, respectively	(1,168,677)		(1,141,615)
Guess?, Inc. stockholders’ equity	Guess?, Inc. stockholders’ equity	418,828		622,658		Guess?, Inc. stockholders’ equity	488,897		534,113
Nonredeemable noncontrolling interests	Nonredeemable noncontrolling interests	33,860		30,985		Nonredeemable noncontrolling interests	44,924		38,638
Total stockholders’ equity	Total stockholders’ equity	452,688		653,643		Total stockholders’ equity	533,821		572,751
		$	2,316,624	$	2,555,628		$	2,489,159	$	2,425,448

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GUESS?, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Product sales	Product sales	$	605,656	$	616,489	$	1,790,651	$	1,721,657	Product sales	$	636,496	$	617,922	$	1,182,406	$	1,184,995
Net royalties	Net royalties	27,747		26,581		78,915		70,039		Net royalties	28,016		24,768		51,904		51,168
Net revenue	Net revenue	633,403		643,070		1,869,566		1,791,696		Net revenue	664,512		642,690		1,234,310		1,236,163
Cost of product sales	Cost of product sales	364,032		349,466		1,082,545		992,448		Cost of product sales	370,069		372,189		707,882		718,513
Gross profit	Gross profit	269,371		293,604		787,021		799,248		Gross profit	294,443		270,501		526,428		517,650
Selling, general and administrative expenses	Selling, general and administrative expenses	212,927		223,775		638,801		616,076		Selling, general and administrative expenses	229,652		216,043		460,625		425,874

Asset impairment charges	Asset impairment charges	1,789		1,152		5,252		3,094		Asset impairment charges	2,622		1,919		4,556		3,463
Net (gains) losses on lease modifications		(146)		3,006		(1,654)		441
Net gains on lease modifications										Net gains on lease modifications	(2,431)		(907)		(2,431)		(1,508)
Earnings from operations	Earnings from operations	54,801		65,671		144,622		179,637		Earnings from operations	64,600		53,446		63,678		89,821
Other income (expense):	Other income (expense):									Other income (expense):
Interest expense	Interest expense	(3,453)		(5,550)		(9,741)		(17,485)		Interest expense	(5,742)		(3,195)		(9,960)		(6,288)
Interest income	Interest income	636		487		1,629		1,322		Interest income	2,861		419		5,376		993
Loss on extinguishment of debt										Loss on extinguishment of debt	—		—		(7,696)		—
Other, net	Other, net	(15,211)		(7,800)		(40,716)		(11,502)		Other, net	(4,592)		(9,053)		(7,223)		(25,505)
Total other expense	Total other expense	(18,028)		(12,863)		(48,828)		(27,665)		Total other expense	(7,473)		(11,829)		(19,503)		(30,800)

Earnings before income tax expense	Earnings before income tax expense	36,773		52,808		95,794		151,972		Earnings before income tax expense	57,127		41,617		44,175		59,021
Income tax expense	Income tax expense	11,616		20,441		32,743		43,588		Income tax expense	15,165		14,177		12,907		21,127
Net earnings	Net earnings	25,157		32,367		63,051		108,384		Net earnings	41,962		27,440		31,268		37,894
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	3,322		2,487		9,284		5,436		Net earnings attributable to noncontrolling interests	2,929		3,478		4,040		5,962
Net earnings attributable to Guess?, Inc.	Net earnings attributable to Guess?, Inc.	$	21,835	$	29,880	$	53,767	$	102,948	Net earnings attributable to Guess?, Inc.	$	39,033	$	23,962	$	27,228	$	31,932

Net earnings per common share attributable to common stockholders:	Net earnings per common share attributable to common stockholders:									Net earnings per common share attributable to common stockholders:
Basic	Basic	$	0.40	$	0.46	$	0.93	$	1.58	Basic	$	0.73	$	0.42	$	0.50	$	0.54
Diluted	Diluted	$	0.34	$	0.45	$	0.80	$	1.55	Diluted	$	0.59	$	0.35	$	0.46	$	0.46

Weighted average common shares outstanding attributable to common stockholders:	Weighted average common shares outstanding attributable to common stockholders:									Weighted average common shares outstanding attributable to common stockholders:
Basic	Basic	53,894		64,373		57,300		64,248		Basic	52,951		56,954		53,649		59,003
Diluted	Diluted	67,102		65,852		70,705		65,893		Diluted	69,869		70,299		65,608		72,443

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GUESS?, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

(in thousands)

(unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Net earnings	Net earnings	$	25,157	$	32,367	$	63,051	$	108,384	Net earnings	$	41,962	$	27,440	$	31,268	$	37,894
Other comprehensive income (loss) (“OCI”):	Other comprehensive income (loss) (“OCI”):									Other comprehensive income (loss) (“OCI”):
Foreign currency translation adjustment	Foreign currency translation adjustment									Foreign currency translation adjustment
Losses arising during the period		(9,281)		(7,907)		(38,082)		(15,374)
Gains (losses) arising during the period										Gains (losses) arising during the period	7,360		(10,885)		9,690		(28,801)

Derivative financial instruments designated as cash flow hedges	Derivative financial instruments designated as cash flow hedges									Derivative financial instruments designated as cash flow hedges
Gains arising during the period	Gains arising during the period	6,998		3,072		17,683		6,486		Gains arising during the period	2,805		2,082		1,748		10,685
Less income tax effect	Less income tax effect	(862)		(371)		(2,105)		(761)		Less income tax effect	(350)		(203)		(235)		(1,243)
Reclassification to net earnings for (gains) losses realized		(4,171)		1,342		(6,947)		2,764
Reclassification to net earnings for gains realized										Reclassification to net earnings for gains realized	(459)		(1,163)		(6,480)		(2,776)
Less income tax effect	Less income tax effect	462		(157)		756		(329)		Less income tax effect	68		124		746		294

Defined benefit plans	Defined benefit plans									Defined benefit plans

Foreign currency and other adjustments	Foreign currency and other adjustments	165		54		243		139		Foreign currency and other adjustments	(159)		(90)		(340)		78
Less income tax effect	Less income tax effect	(15)		(6)		(22)		(14)		Less income tax effect	14		9		34		(7)
Net actuarial loss amortization	Net actuarial loss amortization	13		106		55		317		Net actuarial loss amortization	65		12		127		42
Prior service credit amortization	Prior service credit amortization	(22)		(16)		(67)		(50)		Prior service credit amortization	(40)		(22)		(79)		(45)
Less income tax effect	Less income tax effect	1		(13)		(1)		(36)		Less income tax effect	(2)		1		(4)		(2)
Total comprehensive income	Total comprehensive income	18,445		28,471		34,564		101,526		Total comprehensive income	51,264		17,305		36,475		16,119
Less comprehensive income attributable to noncontrolling interests:	Less comprehensive income attributable to noncontrolling interests:									Less comprehensive income attributable to noncontrolling interests:
Net earnings	Net earnings	3,322		2,487		9,284		5,436		Net earnings	2,929		3,478		4,040		5,962
Foreign currency translation adjustment	Foreign currency translation adjustment	404		(624)		(396)		(333)		Foreign currency translation adjustment	2,382		(324)		3,691		(800)
Amounts attributable to noncontrolling interests	Amounts attributable to noncontrolling interests	3,726		1,863		8,888		5,103		Amounts attributable to noncontrolling interests	5,311		3,154		7,731		5,162
Comprehensive income attributable to Guess?, Inc.	Comprehensive income attributable to Guess?, Inc.	$	14,719	$	26,608	$	25,676	$	96,423	Comprehensive income attributable to Guess?, Inc.	$	45,953	$	14,151	$	28,744	$	10,957

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GUESS?, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


		Nine Months Ended					Six Months Ended
		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net earnings	Net earnings	$	63,051	$	108,384	Net earnings	$	31,268	$	37,894
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Adjustments to reconcile net earnings to net cash provided by operating activities:						Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	45,490		41,613		Depreciation and amortization	30,833		30,533
Amortization of debt discount	Amortization of debt discount	—		8,343		Amortization of debt discount	188		—
Amortization of debt issuance costs	Amortization of debt issuance costs	1,303		1,035		Amortization of debt issuance costs	801		731
Share-based compensation expense	Share-based compensation expense	16,547		15,068		Share-based compensation expense	10,075		10,679
Forward contract (gains) losses	Forward contract (gains) losses	2,301		(766)		Forward contract (gains) losses	(8,385)		2,123
Deferred income taxes		5,752		(119,853)

Net loss from impairment and disposition of long-term assets	Net loss from impairment and disposition of long-term assets	6,023		4,972		Net loss from impairment and disposition of long-term assets	5,362		4,013
Loss on extinguishment of debt						Loss on extinguishment of debt	7,696		—
Other items, net	Other items, net	24,955		14,797		Other items, net	8,515		21,362
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(22,156)		(22,301)		Accounts receivable	27,330		4,623
Inventories	Inventories	(155,391)		(96,673)		Inventories	(38,666)		(102,163)
Prepaid expenses and other assets	Prepaid expenses and other assets	7,663		(23,045)		Prepaid expenses and other assets	471		(5,049)
Operating lease assets and liabilities, net	Operating lease assets and liabilities, net	(23,313)		(17,422)		Operating lease assets and liabilities, net	(12,314)		(19,151)
Accounts payable and accrued expenses and other current liabilities	Accounts payable and accrued expenses and other current liabilities	5,806		72,360		Accounts payable and accrued expenses and other current liabilities	(14,074)		13,050
Other long-term liabilities	Other long-term liabilities	551		18,069		Other long-term liabilities	(1,827)		2,857
Net cash provided by (used in) operating activities		(21,418)		4,581
Net cash provided by operating activities						Net cash provided by operating activities	47,273		1,502
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property and equipment	Purchases of property and equipment	(71,729)		(40,598)		Purchases of property and equipment	(34,793)		(51,221)
Proceeds from sale of business and long-term assets		192		3,625

Net cash settlement of forward contract	Net cash settlement of forward contract	—		(740)		Net cash settlement of forward contract	(721)		—
Purchases of investments		(283)		(2,045)

Other investing activities	Other investing activities	(149)		(617)		Other investing activities	(322)		(15)
Net cash used in investing activities	Net cash used in investing activities	(71,969)		(40,375)		Net cash used in investing activities	(35,836)		(51,236)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from borrowings	Proceeds from borrowings	196,013		19,310		Proceeds from borrowings	76,469		104,855
Repayments on borrowings and finance lease obligations	Repayments on borrowings and finance lease obligations	(97,657)		(25,077)		Repayments on borrowings and finance lease obligations	(31,088)		(68,113)

Net proceeds from issuance of convertible senior notes						Net proceeds from issuance of convertible senior notes	80,324		—
Proceeds from issuance of warrant						Proceeds from issuance of warrant	20,158		—
Purchase of convertible note hedge						Purchase of convertible note hedge	(51,838)		—
Proceeds from termination of convertible senior note hedge						Proceeds from termination of convertible senior note hedge	7,235		—
Payments for termination of common stock warrant						Payments for termination of common stock warrant	(1,024)		—
Debt issuance costs	Debt issuance costs	(1,450)		—		Debt issuance costs	(5,862)		(1,361)

Dividends paid	Dividends paid	(39,344)		(22,121)		Dividends paid	(29,921)		(27,092)

Noncontrolling interest capital distribution	Noncontrolling interest capital distribution	(4,817)		(3,452)		Noncontrolling interest capital distribution	(222)		(4,817)
Purchase of redeemable noncontrolling interest						Purchase of redeemable noncontrolling interest	(8,650)		—
Issuance of common stock, net of income tax withholdings on vesting of stock awards	Issuance of common stock, net of income tax withholdings on vesting of stock awards	2,223		2,846		Issuance of common stock, net of income tax withholdings on vesting of stock awards	493		2,126
Purchase of treasury stock	Purchase of treasury stock	(186,747)		—		Purchase of treasury stock	(42,821)		(186,747)
Net cash used in financing activities		(131,779)		(28,494)
Effect of exchange rates on cash, cash equivalents and restricted cash		(16,334)		(13,768)
Net change in cash, cash equivalents and restricted cash		(241,500)		(78,056)
Cash, cash equivalents and restricted cash at the beginning of the year		415,565		469,345
Cash, cash equivalents and restricted cash at the end of the period		$	174,065	$	391,289
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	13,253		(181,149)
Effect of exchange rates on cash and cash equivalents						Effect of exchange rates on cash and cash equivalents	2,171		(10,310)
Net change in cash and cash equivalents						Net change in cash and cash equivalents	26,861		(241,193)
Cash and cash equivalents at the beginning of the year						Cash and cash equivalents at the beginning of the year	275,765		415,565
Cash and cash equivalents at the end of the period						Cash and cash equivalents at the end of the period	$	302,626	$	174,372

Supplemental cash flow data:	Supplemental cash flow data:					Supplemental cash flow data:
Interest paid	Interest paid	$	9,308	$	9,009	Interest paid	$	5,138	$	5,170
Income taxes paid, net of refunds	Income taxes paid, net of refunds	$	18,077	$	107,687	Income taxes paid, net of refunds	$	15,483	$	15,595

Non-cash investing and financing activity:	Non-cash investing and financing activity:					Non-cash investing and financing activity:
Change in accrual of property and equipment	Change in accrual of property and equipment	$	(3,636)	$	3,514	Change in accrual of property and equipment	$	(3,468)	$	(3,848)
Assets acquired under finance lease obligations	Assets acquired under finance lease obligations	$	3,772	$	2,854	Assets acquired under finance lease obligations	$	198	$	3,323

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GUESS?, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)


		For the three and nine months ended October 29, 2022																	For the three and six months ended July 29, 2023
		Guess?, Inc. Stockholders’ Equity																	Guess?, Inc. Stockholders’ Equity
		Common Stock									Treasury Stock								Common Stock									Treasury Stock
		Shares	Amount		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Shares	Amount		Nonredeemable Noncontrolling Interests		Total			Shares	Amount		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Shares	Amount		Nonredeemable Noncontrolling Interests		Total
Balance at January 29, 2022		62,697,032	$	627	$	565,024	$	1,158,664	$	(135,549)	80,074,914	$	(966,108)	$	30,985	$	653,643
Cumulative adjustment from adoption of new accounting guidance		—	—		(43,078)		21,355		—		—	—		—		(21,723)
Net earnings		—	—		—		7,970		—		—	—		2,484		10,454
Other comprehensive loss, net of income tax of ($889)		—	—		—		—		(11,164)		—	—		(476)		(11,640)
Balance at January 28, 2023																		Balance at January 28, 2023	54,609,786	$	546	$	532,398	$	1,276,857	$	(134,073)	88,161,467	$	(1,141,615)	$	38,638	$	572,751
Net earnings (loss)																		Net earnings (loss)	—	—		—		(11,805)		—		—	—		1,111		(10,694)
Other comprehensive income (loss), net of income tax benefit of $811																		Other comprehensive income (loss), net of income tax benefit of $811	—	—		—		—		(5,404)		—	—		1,309		(4,095)
Issuance of common stock under stock compensation plans	Issuance of common stock under stock compensation plans	411,785	4		(3,608)		—		—		(411,785)	5,074		—		1,470		Issuance of common stock under stock compensation plans	1,085,319	11		(14,519)		—		—		(1,085,319)	14,058		—		(450)
Issuance of stock under Employee Stock Purchase Plan	Issuance of stock under Employee Stock Purchase Plan	10,976	—		69		—		—		(10,976)	137		—		206		Issuance of stock under Employee Stock Purchase Plan	11,848	—		28		—		—		(11,848)	153		—		181
Share-based compensation	Share-based compensation	—	—		4,003		49		—		—	—		—		4,052		Share-based compensation	—	—		4,617		3		—		—	—		—		4,620
Dividends, net of forfeitures on non-participating securities	Dividends, net of forfeitures on non-participating securities	—	—		—		(13,659)		—		—	—		—		(13,659)		Dividends, net of forfeitures on non-participating securities	—	—		—		(12,662)		—		—	—		—		(12,662)
Share repurchases	Share repurchases	(3,789,576)	(38)		38		—		—		3,789,576	(81,747)		—		(81,747)		Share repurchases	(2,237,872)	(22)		22		—		—		2,237,872	(42,821)		—		(42,821)
Noncontrolling interest capital distribution		—	—		—		—		—		—	—		(4,817)		(4,817)
Equity component value of convertible notes transactions, net																		Equity component value of convertible notes transactions, net	—	—		(744)		—		—		—	—		—		(744)
Sale of common stock warrant																		Sale of common stock warrant	—	—		20,158		—		—		—	—		—		20,158
Purchase of convertible note hedge																		Purchase of convertible note hedge	—	—		(39,397)		—		—		—	—		—		(39,397)
Termination of common stock warrant																		Termination of common stock warrant	—	—		(1,024)		—		—		—	—		—		(1,024)
Termination of convertible note hedge																		Termination of convertible note hedge	—	—		7,235		—		—		—	—		—		7,235

Equity forward contract issuance		—	—		(105,000)		—		—		—	—		—		(105,000)
Balance at April 30, 2022		59,330,217	$	593	$	417,448	$	1,174,379	$	(146,713)	83,441,729	$	(1,042,644)	$	28,176	$	431,239
Cumulative adjustment from adoption of new accounting guidance		—	—		—		433		—		—	—		—		433
Balance at April 29, 2023																		Balance at April 29, 2023	53,469,081	$	535	$	508,774	$	1,252,393	$	(139,477)	89,302,172	$	(1,170,225)	$	41,058	$	493,058
Net earnings	Net earnings	—	—		—		23,962		—		—	—		3,478		27,440		Net earnings	—	—		—		39,033		—		—	—		2,929		41,962
Other comprehensive loss, net of income tax of ($69)		—	—		—		—		(9,811)		—	—		(324)		(10,135)
Other comprehensive income, net of income tax of ($270)																		Other comprehensive income, net of income tax of ($270)	—	—		—		—		6,920		—	—		2,382		9,302
Issuance of common stock under stock compensation plans	Issuance of common stock under stock compensation plans	290,393	3		(3,392)		—		—		(290,393)	3,628		—		239		Issuance of common stock under stock compensation plans	107,116	1		(811)		—		—		(107,116)	1,402		—		592
Issuance of stock under Employee Stock Purchase Plan	Issuance of stock under Employee Stock Purchase Plan	13,381	—		44		—		—		(13,381)	167		—		211		Issuance of stock under Employee Stock Purchase Plan	11,085	—		24		—		—		(11,085)	146		—		170
Share-based compensation	Share-based compensation	—	—		6,624		3		—		—	—		—		6,627		Share-based compensation	—	—		5,455		—		—		—	—		—		5,455
Dividends, net of forfeitures on non-participating securities	Dividends, net of forfeitures on non-participating securities	—	—		—		(13,881)		—		—	—		—		(13,881)		Dividends, net of forfeitures on non-participating securities	—	—		—		(16,591)		—		—	—		—		(16,591)
Share repurchases		(5,196,027)	(52)		52		—		—		5,196,027	(105,000)		—		(105,000)
Purchase of redeemable noncontrolling interest																		Purchase of redeemable noncontrolling interest	—	—		1,318		—		—		—	—		(1,223)		95
Noncontrolling interest capital distribution																		Noncontrolling interest capital distribution	—	—		—		—		—		—	—		(222)		(222)
Balance at July 29, 2023																		Balance at July 29, 2023	53,587,282	$	536	$	514,760	$	1,274,835	$	(132,557)	89,183,971	$	(1,168,677)	$	44,924	$	533,821

Equity forward contract settlement		—	—		105,000		—		—		—	—		—		105,000
Balance at July 30, 2022		54,437,964	$	544	$	525,776	$	1,184,896	$	(156,524)	88,333,982	$	(1,143,849)	$	31,330	$	442,173
Net earnings		—	—		—		21,835		—		—	—		3,322		25,157
Other comprehensive income (loss), net of income tax of ($414)		—	—		—		—		(7,116)		—	—		404		(6,712)
Issuance of common stock under stock compensation plans		(5,886)	—		27		—		—		5,538	(71)		—		(44)
Issuance of stock under Employee Stock Purchase Plan		11,094	—		(2)		—		—		(11,094)	143		—		141
Share-based compensation		—	—		5,862		6		—		—	—		—		5,868
Dividends, net of forfeitures on non-participating securities		—	—		—		(12,699)		—		—	—		—		(12,699)

Noncontrolling interest capital distribution		—	—		—		—		—		—	—		(1,196)		(1,196)

Balance at October 29, 2022		54,443,172	$	544	$	531,663	$	1,194,038	$	(163,640)	88,328,426	$	(1,143,777)	$	33,860	$	452,688

See accompanying notes to condensed consolidated financial statements.

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GUESS?, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)


		For the three and nine months ended October 30, 2021																	For the three and six months ended July 30, 2022
		Guess?, Inc. Stockholders’ Equity																	Guess?, Inc. Stockholders’ Equity
		Common Stock									Treasury Stock								Common Stock									Treasury Stock
		Shares	Amount		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Shares	Amount		Nonredeemable Noncontrolling Interests		Total			Shares	Amount		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Shares	Amount		Nonredeemable Noncontrolling Interests		Total
Balance at January 30, 2021		64,230,162	$	642	$	553,111	$	1,034,823	$	(120,675)	78,563,517	$	(924,238)	$	21,917	$	565,580

Balance at January 29, 2022																		Balance at January 29, 2022	62,697,032	$	627	$	565,024	$	1,158,664	$	(135,549)	80,074,914	$	(966,108)	$	30,985	$	653,643
Cumulative adjustment from adoption of new accounting guidance																		Cumulative adjustment from adoption of new accounting guidance	—	—		(43,078)		21,355		—		—	—		—		(21,723)
Net earnings	Net earnings	—	—		—		12,006		—		—	—		864		12,870		Net earnings	—	—		—		7,970		—		—	—		2,484		10,454
Other comprehensive income (loss), net of income tax of ($190)		—	—		—		—		(227)		—	—		217		(10)
Other comprehensive loss, net of income tax of ($889)																		Other comprehensive loss, net of income tax of ($889)	—	—		—		—		(11,164)		—	—		(476)		(11,640)

Issuance of common stock under stock compensation plans	Issuance of common stock under stock compensation plans	689,653	7		(6,417)		—		—		(690,492)	8,123		—		1,713		Issuance of common stock under stock compensation plans	411,785	4		(3,608)		—		—		(411,785)	5,074		—		1,470
Issuance of stock under Employee Stock Purchase Plan	Issuance of stock under Employee Stock Purchase Plan	12,798	—		81		—		—		(12,798)	151		—		232		Issuance of stock under Employee Stock Purchase Plan	10,976	—		69		—		—		(10,976)	137		—		206
Share-based compensation	Share-based compensation	—	—		4,056		4		—		—	—		—		4,060		Share-based compensation	—	—		4,003		49		—		—	—		—		4,052
Dividends, net of forfeitures on non-participating securities	Dividends, net of forfeitures on non-participating securities	—	—		—		(7,252)		—		—	—		—		(7,252)		Dividends, net of forfeitures on non-participating securities	—	—		—		(13,659)		—		—	—		—		(13,659)
Share repurchases																		Share repurchases	(3,789,576)	(38)		38		—		—		3,789,576	(81,747)		—		(81,747)

Noncontrolling interest capital distribution																		Noncontrolling interest capital distribution	—	—		—		—		—		—	—		(4,817)		(4,817)
Equity forward contract issuance																		Equity forward contract issuance	—	—		(105,000)		—		—		—	—		—		(105,000)
Balance at April 30, 2022																		Balance at April 30, 2022	59,330,217	$	593	$	417,448	$	1,174,379	$	(146,713)	83,441,729	$	(1,042,644)	$	28,176	$	431,239
Cumulative adjustment from adoption of new accounting guidance																		Cumulative adjustment from adoption of new accounting guidance	—	—		—		433		—		—	—		—		433
Net earnings																		Net earnings	—	—		—		23,962		—		—	—		3,478		27,440
Other comprehensive loss, net of income tax of ($69)																		Other comprehensive loss, net of income tax of ($69)	—	—		—		—		(9,811)		—	—		(324)		(10,135)
Issuance of common stock under stock compensation plans																		Issuance of common stock under stock compensation plans	290,393	3		(3,392)		—		—		(290,393)	3,628		—		239
Issuance of stock under Employee Stock Purchase Plan																		Issuance of stock under Employee Stock Purchase Plan	13,381	—		44		—		—		(13,381)	167		—		211
Share-based compensation																		Share-based compensation	—	—		6,624		3		—		—	—		—		6,627
Dividends, net of forfeitures on non-participating securities																		Dividends, net of forfeitures on non-participating securities	—	—		—		(13,881)		—		—	—		—		(13,881)
Share repurchases																		Share repurchases	(5,196,027)	(52)		52		—		—		5,196,027	(105,000)		—		(105,000)

Equity forward contract settlement																		Equity forward contract settlement	—	—		105,000		—		—		—	—		—		105,000
Balance at July 30, 2022																		Balance at July 30, 2022	54,437,964	$	544	$	525,776	$	1,184,896	$	(156,524)	88,333,982	$	(1,143,849)	$	31,330	$	442,173

Balance at May 1, 2021		64,932,613	$	649	$	550,831	$	1,039,581	$	(120,902)	77,860,227	$	(915,964)	$	22,998	$	577,193

Net earnings		—	—		—		61,062		—		—	—		2,085		63,147
Other comprehensive income (loss), net of income tax of ($403)		—	—		—		—		(3,026)		—	—		74		(2,952)
Issuance of common stock under stock compensation plans		24,233	1		60		—		—		(27,409)	323		—		384
Issuance of stock under Employee Stock Purchase Plan		11,129	—		79		—		—		(11,129)	130		—		209
Share-based compensation		—	—		4,795		7		—		—	—		—		4,802
Dividends, net of forfeitures on non-participating securities		—	—		—		(7,308)		—		—	—		—		(7,308)

Noncontrolling interest capital distribution		—	—		—		—		—		—	—		(3,452)		(3,452)
Balance at July 31, 2021		64,967,975	$	650	$	555,765	$	1,093,342	$	(123,928)	77,821,689	$	(915,511)	$	21,705	$	632,023
Net earnings		—	—		—		29,880		—		—	—		2,487		32,367
Other comprehensive loss, net of income tax of ($547)		—	—		—		—		(3,272)		—	—		(624)		(3,896)
Issuance of common stock under stock compensation plans		(1,137)	—		160		—		—		(25)	—		—		160
Issuance of stock under Employee Stock Purchase Plan		7,809	—		56		—		—		(7,809)	92		—		148
Share-based compensation		—	—		6,196		10		—		—	—		—		6,206
Dividends, net of forfeitures on non-participating securities		—	—		—		(7,649)		—		—	—		—		(7,649)
Redeemable noncontrolling interest redemption value adjustment		—	—		—		(10,454)		—		—	—		4,800		(5,654)

Balance at October 30, 2021		64,974,647	$	650	$	562,177	$	1,105,129	$	(127,200)	77,813,855	$	(915,419)	$	28,368	$	653,705

See accompanying notes to condensed consolidated financial statements.

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GUESS?, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~October~~July 29, ~~2022~~2023

(unaudited)

(1)Basis of Presentation

Description of the Business

Guess?, Inc. (the “Company” or “GUESS?”) designs, markets, distributes and licenses a leading lifestyle collection of contemporary apparel and accessories for men, women and children that reflect the American lifestyle and European fashion sensibilities. The Company’s designs are sold in GUESS? owned stores, to a network of wholesale accounts that includes better department stores, selected specialty retailers and upscale boutiques and through the Internet. GUESS? branded products, some of which are produced under license, are also sold internationally through a series of retail store licensees and wholesale distributors.

Reclassifications

The Company has made certain reclassifications to prior period amounts to conform to the current period presentation within the accompanying condensed consolidated financial statements and notes to the condensed consolidated financial statements.

Interim Financial Statements

In the opinion of management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated balance sheets as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, and the condensed consolidated statements of income, comprehensive income, cash flows and stockholders’ equity for the three and ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021.~~2022. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they have been condensed and do not include all of the information and footnotes required by GAAP for complete financial statements. The results of operations and cash flows for the three and ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 are not necessarily indicative of the results of operations to be expected for the full fiscal year.

These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended January ~~29, 2022.~~28, 2023.

Fiscal Periods

The Company operates on a 52/53-week fiscal year calendar, which ends on the Saturday nearest to January 31 of each year. The three and ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 had the same number of days as the three and ~~nine~~six months ended ~~October~~July 30, ~~2021.~~2022. All references herein to “fiscal ~~2022”~~2023” and “fiscal ~~2021”~~2022” represent the results of the 52-week fiscal ~~year~~years ended January ~~29, 2022~~28, 2023 and January ~~30, 2021,~~29, 2022, respectively. All references herein to “fiscal ~~2023”~~2024” represent the ~~52-week~~53-week fiscal year ending ~~January 28, 2023.~~February 3, 2024, with the extra week occurring in the fourth quarter of the year.

Business Update, Market Trends and Uncertainties

Macroeconomic conditions, including ~~rising~~ inflation, higher interest rates, foreign exchange rate fluctuations, declines in consumer spending, ~~and~~ the impact of the ongoing conflict in Ukraine and the ~~COVID-19 pandemic~~lingering effects of public health crises continue to negatively impact the Company’s business. Additionally, the Company has experienced negative impacts to its global supply chains as a result of the COVID-19 pandemic and other factors, contributing to industry-wide higher product and freight costs. The Company has been working actively to mitigate these headwinds to the extent possible through a number of global supply chain initiatives. Furthermore, certain of the Company’s stores, primarily in Asia, were impacted by government mandated capacity restrictions and other measures to prevent the spread of COVID-19, resulting in the closure of a limited number of its directly operated stores as of October 29, 2022. The impact of these closures was minimal to the Company’s three and nine months ended October 29, 2022 results.businesses.

The Company continues to carefully monitor global and regional developments and respond appropriately. The Company also continues to ~~developments in market conditions, including by~~ strategically ~~managing~~manage expenses in order to protect profitability and to mitigate, to the extent possible, the residual effect of ~~the~~ supply chain disruptions. The duration and scope of these conditions cannot be

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predicted, and therefore, any anticipated negative financial impact to the Company’s operating results cannot be reasonably estimated.

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Summary of Significant Accounting Policies

The accounting policies of the Company are set forth in further detail in Note 1 to the Company's Consolidated Financial Statements contained in the Company’s fiscal ~~2022~~2023 Annual Report on Form 10-K. The Company includes herein certain updates to those policies.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosed in the accompanying notes. Significant areas requiring the use of management estimates relate to the allowances for doubtful accounts, sales return and markdown allowances, gift card and loyalty accruals, valuation of inventories, share-based compensation, income taxes, recoverability of deferred income taxes, unrecognized income tax benefits, the useful life of assets for depreciation and amortization, evaluation of asset impairment (including goodwill and long-lived assets, such as property and equipment and operating lease right-of-use (“ROU”) assets), pension obligations, workers’ compensation and medical self-insurance expense and accruals, litigation reserves and restructuring expense and accruals. These estimates and assumptions may change as a result of the impact of global economic conditions, such as the uncertainty regarding the impact of ~~the COVID-19 pandemic,~~public health crises, the ongoing Russia-Ukraine conflict, ~~and~~ global inflationary pressures, volatility in foreign exchange rates and declining consumer spending. Actual results could differ from those estimates. Revisions in estimates could materially impact the results of operations and financial position.

The ~~COVID-19 pandemic and other global economic conditions have negatively impacted the Company’s business. The~~ Company’s operations could ~~continue to~~ be impacted in ways the Company is not able to predict ~~today due to the evolving situation.~~today. While the Company believes it has made reasonable accounting estimates based on the facts and circumstances that were available as of the reporting date, to the extent there are differences between these estimates and actual results, the Company’s results of operations and financial position could be materially impacted.

Revenue Recognition

The Company recognizes the majority of its revenue from its direct-to-consumer (brick-and-mortar retail stores and concessions as well as e-commerce) and wholesale distribution channels at a point in time when it satisfies a performance obligation and transfers control of the product to the respective customer.

The Company also recognizes royalty revenue from its trademark license agreements. The Company’s trademark license agreements represent symbolic licenses that are dependent on the Company’s continued support over the term of the license agreement. The amount of revenue that is recognized from the licensing arrangements is based on sales-based royalty and advertising fund contributions as well as specific fixed payments, where applicable. The Company’s trademark license agreements customarily provide for a multi-year initial term ranging from three to ten years and may contain options to renew prior to expiration for an additional multi-year period. The unrecognized portion of upfront payments is included in deferred royalties in accrued expenses and other long-term liabilities depending on the short or long-term nature of the payments to be recognized. As of ~~October~~July 29, ~~2022,~~2023, the Company had $4.9 million and ~~$11.3~~$12.9 million of deferred royalties related to these upfront payments included in accrued expenses and other current liabilities and other long-term liabilities, respectively. This compares to ~~$5.1~~$4.8 million and ~~$14.3~~$15.2 million of deferred royalties related to these upfront payments included in accrued expenses and other current liabilities and other long-term liabilities, respectively, at January ~~29, 2022.~~28, 2023. During the three and ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, the Company recognized ~~$3.3~~$3.6 million and ~~$10.0~~$7.2 million in net royalties related to the amortization of deferred royalties, respectively. During the three and ~~nine~~six months ended ~~October~~July 30, ~~2021,~~2022, the Company recognized ~~$3.5~~$3.3 million and ~~$10.6~~$6.7 million in net royalties related to the amortization of deferred royalties, respectively.

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Refer to Note 8 for further information on disaggregation of revenue by segment and country.

Allowance for Doubtful Accounts

In the normal course of business, the Company grants credit directly to certain wholesale customers after a credit analysis is performed based on financial and other criteria. Accounts receivable are recorded net of an

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allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses that may result from the inability of its wholesale customers and licensing partners to make their required payments. The Company bases its allowances on analysis of the aging of accounts receivable at the date of the financial statements, assessments of historical and current collection trends, evaluation of the impact of current and future forecasted economic conditions and whether the Company has obtained credit insurance or other guarantees. Management performs regular evaluations concerning the ability of its customers to make required payments and records a provision for doubtful accounts based on these evaluations.

As of ~~October~~July 29, ~~2022,~~2023, approximately ~~47%~~51% of the Company’s total net trade accounts receivable and ~~61%~~60% of its European net trade receivables were subject to credit insurance coverage, certain bank guarantees or letters of credit for collection purposes. The Company’s credit insurance coverage contains certain terms and conditions specifying deductibles and annual claim limits. Management evaluates the creditworthiness of the counterparties to the credit insurance, bank guarantees and letters of credit and records a provision for the risk of loss on these instruments based on these evaluations as considered necessary.

The Company’s credit losses for the periods presented were not significant compared to sales and did not significantly exceed management’s estimates. Refer to Note 5 for further information on the Company’s allowance for doubtful accounts.

Recently ~~Adopted Accounting Guidance~~

~~Convertible Instruments and Contracts in an Entity’s Own Equity~~

The Company adopted guidance to simplify the accounting for convertible instruments and contracts in an entity’s own equity and the diluted earnings per share computations for these instruments on January 30, 2022, using the modified retrospective transition method. The cumulative effect of the accounting change increased the carrying amount of the 2.00% convertible senior notes due 2024 (the “Notes”) by $27.5 million, reduced deferred income tax liabilities by $6.2 million, reduced additional paid-in capital by $43.1 million and increased retained earnings by $21.8 million, with no restatement of prior periods. Refer to Note 3 for the impact on the earnings per share calculation and Note 10 for the impact on the Notes.

~~Modifications or Exchanges of Freestanding Equity-Classified Written Call Options~~

The Financial Accounting Standards Board (“FASB”) issued authoritative guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified in equity after modification or exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). The Company adopted this guidance on January 30, 2022 which had no impact on the Company’s consolidated financial statement presentation or disclosures.

~~Recently~~ Issued Accounting Guidance

Reference Rate Reform

The ~~FASB~~Financial Accounting Standards Board (“FASB”) issued guidance to provide temporary optional expedients to ease the potential burden in accounting for reference rate reform. This guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to certain criteria, referencing ~~LIBOR~~the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. The FASB issued

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subsequent amendments to further clarify the scope of optional expedients and exceptions to derivatives affected by the transition. The guidance is intended to help stakeholders during the global market-wide reference rate transition period.

The Company identified and ~~will modify, if necessary,~~modified its loans and other financial instruments with attributes directly or indirectly influenced by LIBOR. The Company determined, of its current LIBOR references as outlined in Note 9 Borrowings and Finance Lease Obligations, Note 15 Fair Value Measurements and Note 16 Derivative Financial Instruments, only the obligations under Mortgage Debt (as defined in Note 9), credit facilities and ~~Interest Rate Swap Agreements are~~interest rate swap agreements were impacted by this guidance. In May 2023, the Company amended the terms of the Mortgage Debt for the interest rate to be based on Secured Overnight Financing Rate (“SOFR”) effective May 1, 2023. The Company also amended its existing interest rate swap agreement, resulting in a swap fixed rate of approximately 3.14%. As of July 29, 2023, the Company does not ~~expect this guidance to~~ have ~~a material impact on its consolidated~~any financial ~~position, results of operations~~instruments with attributes directly or ~~cash flows.~~indirectly influenced by LIBOR.

(2) Lease Accounting

The Company primarily leases its showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under operating lease agreements expiring on various dates through January 2039. The Company also leases some of its equipment, as well as computer hardware and software, under operating and finance lease agreements expiring on various dates through ~~September 2027.~~April 2028.

The Company’s lease agreements primarily provide for lease payments based on a minimum annual rental amount, a percentage of annual sales volume, periodic adjustments related to inflation or a combination of such lease payments. Certain retail store leases provide for lease payments based upon the minimum annual rental amount and a percentage of annual sales volume, generally ranging from 3% to 28%, when specific sales

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volumes are exceeded. The Company’s retail concession leases also provide for lease payments primarily based upon a percentage of annual sales volume, which averages approximately 32%.

In addition to the amounts as disclosed below, the Company has estimated additional operating lease commitments of approximately ~~$15.6~~$42.3 million for leases where the Company has not yet taken possession of the underlying asset as of ~~October~~July 29, ~~2022.~~2023. As such, the related operating lease ROU assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of ~~October~~July 29, ~~2022.~~2023.

The components of leases are (in thousands):

Oct 29, 2022 Jan 29, 2022
Assets Balance Sheet Location
Operating Operating lease right-of-use assets $ 614,705 $ 685,799
Finance Property and equipment, net 19,264 21,898
Total lease assets $ 633,969 $ 707,697
Liabilities Balance Sheet Location
Current:
Operating Current portion of operating lease liabilities $ 159,152 $ 195,516
Finance Current portion of borrowings and finance lease obligations 5,888 5,806
Noncurrent:
Operating Long-term operating lease liabilities 519,594 582,757
Finance Long-term debt and finance lease obligations 14,559 17,137
Total lease liabilities $ 699,193 $ 801,216

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		Jul 29, 2023		Jan 28, 2023
Assets	Balance Sheet Location
Operating	Operating lease right-of-use assets	$	651,722	$	636,148
Finance	Property and equipment, net	16,304		19,055
Total lease assets		$	668,026	$	655,203

Liabilities	Balance Sheet Location
Current:
Operating	Current portion of operating lease liabilities	$	170,020	$	170,192
Finance	Current portion of borrowings and finance lease obligations	6,450		6,684
Noncurrent:
Operating	Long-term operating lease liabilities	532,495		528,236
Finance	Long-term debt and finance lease obligations	10,883		13,181
Total lease liabilities		$	719,848	$	718,293

The components of lease costs are (in thousands):


			Three Months Ended				Nine Months Ended						Three Months Ended				Six Months Ended
		Income Statement Location	Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021			Income Statement Location	Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Operating lease costs	Operating lease costs	Cost of product sales	$	43,361	$	44,729	$	131,450	$	137,189	Operating lease costs	Cost of product sales	$	45,351	$	43,716	$	91,403	$	88,088
Operating lease costs	Operating lease costs	Selling, general and administrative expenses	6,000		6,300		18,582		18,846		Operating lease costs	Selling, general and administrative expenses	6,600		6,281		13,197		12,582
Operating lease costs1	Operating lease costs1	Net (gains) losses on lease modifications	(146)		3,006		(1,654)		441		Operating lease costs1	Net gains on lease modifications	(2,431)		(907)		(2,431)		(1,508)
Finance lease costs	Finance lease costs										Finance lease costs
Amortization of leased assets	Amortization of leased assets	Cost of product sales	21		5		60		33		Amortization of leased assets	Cost of product sales	29		20		52		39
Amortization of leased assets	Amortization of leased assets	Selling, general and administrative expenses	1,510		1,233		4,585		4,000		Amortization of leased assets	Selling, general and administrative expenses	1,583		1,574		3,112		3,076
Interest on lease liabilities	Interest on lease liabilities	Interest expense	209		474		747		1,103		Interest on lease liabilities	Interest expense	189		251		398		538
Variable lease costs2	Variable lease costs2	Cost of product sales	21,682		19,321		64,462		51,700		Variable lease costs2	Cost of product sales	23,660		20,784		48,151		42,780
Variable lease costs2	Variable lease costs2	Selling, general and administrative expenses	669		552		2,438		1,571		Variable lease costs2	Selling, general and administrative expenses	1,086		813		1,747		1,769
Short-term lease costs	Short-term lease costs	Cost of product sales	87		99		273		330		Short-term lease costs	Cost of product sales	79		90		149		186
Short-term lease costs	Short-term lease costs	Selling, general and administrative expenses	1,722		1,341		4,600		3,635		Short-term lease costs	Selling, general and administrative expenses	652		1,320		2,291		2,878
Total lease costs	Total lease costs		$	75,115	$	77,060	$	225,543	$	218,848	Total lease costs		$	76,798	$	73,942	$	158,069	$	150,428

Notes:

1During the three and ~~nine~~six months ended ~~October~~July 29, 2023 and July 30, 2022, ~~and October 30, 2021,~~ net ~~(gains) losses~~gains on lease modifications related primarily to the early termination of lease agreements for certain of the Company’s retail locations. Operating lease costs for these retail locations prior to the early termination were included in cost of product sales.

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2During the three and ~~nine~~six months ended ~~October~~July 29, 2023, variable lease costs included certain rent concessions of approximately $0.6 million and $1.0 million, respectively, received by the Company, primarily in Europe. During the three and six months ended July 30, 2022, variable lease costs included certain rent concessions of approximately ~~$1.1~~$2.2 million and $4.6 million, respectively, received by the Company, primarily in Europe, related to the COVID-19 pandemic. During the three and nine months ended October 30, 2021, variable lease costs included certain rent concessions of approximately $2.6 million and $14.5$3.5 million, respectively, received by the Company, primarily in Europe, related to the COVID-19 pandemic.

Maturities of the Company’s operating and finance lease liabilities as of ~~October~~July 29, ~~2022~~2023 are (in thousands):
Operating Leases
Maturity of Lease Liabilities Non-Related Parties Related Parties Finance Leases Total
Fiscal 2023 $ 53,046 $ 1,842 $ 2,142 $ 57,030
Fiscal 2024 167,666 7,766 6,950 182,382
Fiscal 2025 123,561 7,158 5,180 135,899
Fiscal 2026 92,423 6,766 4,788 103,977
Fiscal 2027 74,777 7,467 2,401 84,645
After fiscal 2027 190,441 28,294 725 219,460
Total lease payments 701,914 59,293 22,186 783,393
Less: Interest 70,574 11,887 1,739 84,200
Present value of lease liabilities $ 631,340 $ 47,406 $ 20,447 $ 699,193

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	Operating Leases
Maturity of Lease Liabilities	Non-Related Parties		Related Parties		Finance Leases		Total
Fiscal 2024	$	107,753	$	4,798	$	4,148	$	116,699
Fiscal 2025	154,678		7,241		5,711		167,630
Fiscal 2026	119,151		6,849		5,246		131,246
Fiscal 2027	102,879		7,550		2,686		113,115
Fiscal 2028	76,453		7,717		828		84,998
After fiscal 2028	189,052		20,826		4		209,882
Total lease payments	749,966		54,981		18,623		823,570
Less: Interest	90,454		11,978		1,290		103,722
Present value of lease liabilities	$	659,512	$	43,003	$	17,333	$	719,848

Other supplemental information is (in thousands):

Lease Term and Discount Rate

~~Oct~~Jul 29, ~~2022~~2023

Weighted-average remaining lease term

Operating leases

6.1 years

Finance leases

~~3.8~~3.3 years

Weighted-average discount rate

Operating leases

~~3.9%~~4.6%

Finance leases

4.7%


		Nine Months Ended					Six Months Ended
Supplemental Cash Flow Information	Supplemental Cash Flow Information	Oct 29, 2022		Oct 30, 2021		Supplemental Cash Flow Information	Jul 29, 2023		Jul 30, 2022
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities					Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	Operating cash flows from operating leases	$	166,910	$	167,444	Operating cash flows from operating leases	$	99,294	$	116,202

New operating ROU assets obtained in exchange for lease liabilities	New operating ROU assets obtained in exchange for lease liabilities	$	106,427	$	99,603	New operating ROU assets obtained in exchange for lease liabilities	$	64,636	$	91,331

Impairment

During the three and ~~nine~~six months ended ~~October~~July 29, 2023 and July 30, 2022, there were immaterial ROU asset impairment charges ~~recorded~~ primarily related to Europe. ~~During the three and nine months ended October 30, 2021, there were $0.7 million ROU asset~~Asset impairment charges ~~recorded primarily related to Europe. The asset impairment charges were~~are generally determined based on the excess of carrying value over the fair value of the ROU assets. The Company uses estimates of market participant rents to calculate fair value of the ROU assets. Refer to Note 15 for more information on the Company’s impairment testing.

~~(3)Earnings per Share~~

On January 30, 2022, the Company adopted the authoritative guidance which simplifies the accounting for convertible instruments and contracts in an entity’s own equity using the modified retrospective method. Following adoption, diluted earnings per share related to the Notes is calculated using the if-converted method. The number of dilutive shares is based on the conversion rate associated with the Notes.

Prior to adoption, the Company applied the treasury stock method when calculating the potential dilutive effect of the Notes, if any. As the Company expects to settle the principal amount of its outstanding Notes in cash and any excess in shares, only the amounts in excess of the principal amount were considered in diluted earnings per share, if applicable. Refer to Note 1 and Note 10 for more information regarding the Notes.

In addition, the Company granted certain nonvested stock units, subject to certain performance-based or market-based vesting conditions, as well as continued service requirements through the respective vesting periods. These nonvested stock units are included in the computation of diluted net earnings per common share attributable to common stockholders only to the extent the underlying performance-based or market-based vesting conditions are satisfied as of the end of the reporting period, or would be considered satisfied if the end of the reporting period was the end of the related contingency period, and the results would be dilutive under the treasury stock method.

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(3)Earnings per Share

The computation of basic and diluted net earnings per common share attributable to common stockholders is (in thousands, except per share data):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Net earnings attributable to Guess?, Inc.	Net earnings attributable to Guess?, Inc.	$	21,835	$	29,880	$	53,767	$	102,948	Net earnings attributable to Guess?, Inc.	$	39,033	$	23,962	$	27,228	$	31,932
Less net earnings attributable to nonvested restricted stockholders	Less net earnings attributable to nonvested restricted stockholders	260		336		511		1,116		Less net earnings attributable to nonvested restricted stockholders	502		264		392		264
Net earnings attributable to common stockholders	Net earnings attributable to common stockholders	21,575		29,544		53,256		101,832		Net earnings attributable to common stockholders	38,531		23,698		26,836		31,668
Add interest expense related to the Notes		1,026		—		2,960		—
Add interest expense related to the convertible senior notes										Add interest expense related to the convertible senior notes	2,743		988		3,159		1,925
Net earnings attributable to common stockholders used in diluted computations	Net earnings attributable to common stockholders used in diluted computations	$	22,601	$	29,544	$	56,216	$	101,832	Net earnings attributable to common stockholders used in diluted computations	$	41,274	$	24,686	$	29,995	$	33,593

Weighted average common shares used in basic computations	Weighted average common shares used in basic computations	53,894		64,373		57,300		64,248		Weighted average common shares used in basic computations	52,951		56,954		53,649		59,003

Effect of dilutive securities:	Effect of dilutive securities:									Effect of dilutive securities:
Stock options and restricted stock units	Stock options and restricted stock units	1,309		1,479		1,506		1,645		Stock options and restricted stock units	1,075		1,528		1,222		1,623
The Notes		11,899		—		11,899		—
Convertible senior notes										Convertible senior notes	15,843		11,817		10,737		11,817
Weighted average common shares used in diluted computations	Weighted average common shares used in diluted computations	67,102		65,852		70,705		65,893		Weighted average common shares used in diluted computations	69,869		70,299		65,608		72,443

Net earnings per common share attributable to common stockholders:	Net earnings per common share attributable to common stockholders:									Net earnings per common share attributable to common stockholders:
Basic	Basic	$	0.40	$	0.46	$	0.93	$	1.58	Basic	$	0.73	$	0.42	$	0.50	$	0.54
Diluted	Diluted	$	0.34	$	0.45	$	0.80	$	1.55	Diluted	$	0.59	$	0.35	$	0.46	$	0.46

During the three months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, equity awards granted for ~~1,319,998~~990,262 and ~~1,341,973~~1,209,255 shares, respectively, of the Company’s common stock and for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, equity awards granted for ~~1,261,633~~1,035,126 and ~~475,584~~1,294,538 shares, respectively, of the Company’s common stock were outstanding but were excluded from the computation of diluted weighted average common shares and common equivalent shares outstanding because the assumed proceeds ~~as calculated under the treasury stock method,~~ resulted in these awards being antidilutive. For the three and ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, the Company excluded ~~594,985~~640,042 nonvested stock units which were subject to the achievement of performance-based or market-based vesting conditions from the computation of diluted weighted average common shares and common equivalent shares outstanding because these conditions were not achieved as of ~~October~~July 29, ~~2022.~~2023. For the three and ~~nine~~six months ended ~~October~~July 30, ~~2021,~~2022, there were ~~465,590~~594,985 nonvested stock units subject to the achievement of performance-based or market-based vesting conditions that were excluded from the computation of diluted weighted average common shares and common equivalent shares outstanding as the respective conditions were not achieved as of ~~October~~July 30, ~~2021.~~2022.

Warrants related to the 2.00% convertible senior notes due April 2024 (the “2024 Notes”) to purchase approximately 4.6 million and 11.6 million shares of the Company’s common shares at an initial strike price of $46.88 per share were outstanding as of ~~October~~July 29, 2023 and July 30, 2022, respectively. Warrants related to the 3.75% convertible senior notes due April 2028 (the “2028 Notes”, and ~~October 30, 2021.~~together with the 2024 Notes, the “Notes”) to purchase approximately 11.1 million shares of the Company’s common shares at an initial strike price of $41.80 per share were outstanding as of July 29, 2023. These warrants were excluded from the computation of diluted net earnings per share since the warrants’ adjusted strike price was greater than the average market price of the Company’s common stock during the three and ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021.~~2022. See Note 10 for more information regarding the Notes.

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(4)Stockholders' Equity

Share Repurchase Program

During fiscal 2022, the Board of Directors terminated its previous 2012 $500 million share repurchase program (the “2012 Share Repurchase Program”) and authorized a new $200 million share repurchase program (the “2021 Share Repurchase Program”). On March 14, 2022, the Board of Directors expanded its repurchase authorization under the 2021 Share Repurchase Program by $100 million. Repurchases may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available

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means. There is no minimum or maximum number of shares to be repurchased under the program and the program may be discontinued at any time without prior notice.

OnDuring March ~~18,~~ 2022, pursuant to existing share repurchase authorizations, the Company entered into an accelerated share repurchase agreement (the “2022 ASR Contract”) with a financial institution (the “2022 ASR Counterparty”) to repurchase an aggregate of $175.0 million of the Company’s common stock. Under the 2022 ASR Contract, the Company made a payment of $175.0 million to the 2022 ASR Counterparty ~~and received an initial delivery of~~in exchange for approximately ~~3.3~~8.5 million shares of its common stock ~~on March 21, 2022. The Company received a final settlement~~in the first half of ~~an additional 5.2 million shares under the 2022 ASR Contract on June 24, 2022.~~fiscal 2023.

During the three months ended ~~October~~July 29, ~~2022,~~2023, there were no share repurchases. During the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, the Company repurchased ~~8,985,603~~2.2 million shares ~~of the Company’s common stock~~ under ~~the Company’s~~its 2021 Share Repurchase Program at an aggregate cost of $42.8 million, including excise tax. These shares were repurchased through broker assisted market transactions in connection with the exchange and subscription offering related to the 2024 Notes and the 2028 Notes. During the three and six months ended July 30, 2022, the Company repurchased 5.2 million and 9.0 million shares, respectively, of the Company’s common stock under its 2021 Share Repurchase Program at an aggregate cost of $105.0 million and $186.7 million, respectively, which is inclusive of the shares repurchased under the 2022 ASR Contract. ~~There were no shares repurchased under the Company’s 2021 or 2012 Share Repurchase Program during the three and nine months ended October 30, 2021.~~ As of ~~October~~July 29, ~~2022,~~2023, the Company had remaining authority under the 2021 Share Repurchase Program to purchase ~~$62.3~~$19.7 million of its common stock.

Dividends

The following sets forth the cash dividend declared per share:

Three Months Ended Nine Months Ended
Oct 29, 2022 Oct 30, 2021 Oct 29, 2022 Oct 30, 2021
Cash dividend declared per share $ 0.2250 $ 0.1125 $ 0.6750 $ 0.3375


	Three Months Ended				Six Months Ended
	Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Cash dividend declared per share	$	0.300	$	0.225	$	0.525	$	0.450

~~In accordance with the terms of the~~The indenture governing the 2024 Notes requires an adjustment to the conversion rate and the conversion price of the 2024 Notes for quarterly dividends exceeding $0.1125 per share. The indenture governing the 2028 Notes requires an adjustment to the conversion rate and the conversion price of the 2028 Notes for quarterly dividends exceeding $0.225 per share.

On May 24, 2023, the Company announced an increase to its regular quarterly cash dividend from $0.225 to $0.30 per share on the Company’s common stock, which was paid on June 23, 2023 to shareholders of record as of the close of business on June 7, 2023. In connection with the increase to the quarterly cash dividend, the Company has adjusted the conversion rate and the conversion price of the Notes in accordance with the terms of the indentures governing the respective Notes effective June 6, 2023, resulting in an increase to the conversion rate and a decrease in the conversion price. A corresponding adjustment was made to the strike prices with respect to the convertible note hedges and the warrants entered into by the Company in connection with the offering of the corresponding Notes, each of which was decreased in accordance with the terms of the applicable convertible note hedge confirmations and warrant confirmations. Refer to Note 10 for more information. An additional quarterly ~~dividends exceeding $0.1125 per share.~~cash dividend was declared on August 23, 2023, which will result in similar adjustments to the conversion rate and conversion price of the Notes and the strike prices applicable to the convertible note hedges and warrants. Refer to Note 17 for more information.

For each of the periods presented, dividends paid also included the impact from vesting of restricted stock units that are considered non-participating securities and are only entitled to dividend payments once the respective awards vest.

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Decisions on whether, when and in what amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of the Company’s Board of Directors, which reserves the right to change or terminate the Company’s dividend practices at any time and for any reason without prior notice. The payment of cash dividends in the future will be based upon a number of business, legal and other considerations, including the Company’s cash flow from operations, capital expenditures, debt service and covenant requirements, cash paid for income taxes, earnings, share repurchases, economic conditions and U.S. and global liquidity.

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Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss), net of related income taxes, are (in thousands):

Foreign Currency Translation Adjustment Derivative Financial Instruments Designated as Cash Flow Hedges Defined Benefit Plans Total
Three Months Ended Oct 29, 2022
Balance at July 30, 2022 $ (163,862) $ 14,240 $ (6,902) $ (156,524)
Gains (losses) arising during the period (9,685) 6,136 150 (3,399)
Reclassification to net earnings for gains realized — (3,709) (8) (3,717)
Net other comprehensive income (loss) (9,685) 2,427 142 (7,116)
Balance at October 29, 2022 $ (173,547) $ 16,667 $ (6,760) $ (163,640)
Nine Months Ended Oct 29, 2022
Balance at January 29, 2022 $ (135,861) $ 7,280 $ (6,968) $ (135,549)
Gains (losses) arising during the period (37,686) 15,578 221 (21,887)
Reclassification to net earnings for gains realized — (6,191) (13) (6,204)
Net other comprehensive income (loss) (37,686) 9,387 208 (28,091)
Balance at October 29, 2022 $ (173,547) $ 16,667 $ (6,760) $ (163,640)
Three Months Ended Oct 30, 2021
Balance at July 31, 2021 $ (113,728) $ (602) $ (9,598) $ (123,928)
Gains (losses) arising during the period (7,283) 2,701 48 (4,534)
Reclassification to net earnings for losses realized — 1,185 77 1,262
Net other comprehensive income (loss) (7,283) 3,886 125 (3,272)
Balance at October 30, 2021 $ (121,011) $ 3,284 $ (9,473) $ (127,200)
Nine Months Ended Oct 30, 2021
Balance at January 30, 2021 $ (105,970) $ (4,876) $ (9,829) $ (120,675)
Gains (losses) arising during the period (15,041) 5,725 125 (9,191)
Reclassification to net earnings for losses realized — 2,435 231 2,666
Net other comprehensive income (loss) (15,041) 8,160 356 (6,525)
Balance at October 30, 2021 $ (121,011) $ 3,284 $ (9,473) $ (127,200)



	Foreign Currency Translation Adjustment		Derivative Financial Instruments Designated as Cash Flow Hedges		Defined Benefit Plans		Total

	Three Months Ended Jul 29, 2023
Balance at April 29, 2023	$	(128,147)	$	(7,869)	$	(3,461)	$	(139,477)
Gains (losses) arising during the period	4,978		2,455		(145)		7,288
Reclassification to net earnings for (gains) losses realized	—		(391)		23		(368)
Net other comprehensive income (loss)	4,978		2,064		(122)		6,920
Balance at July 29, 2023	$	(123,169)	$	(5,805)	$	(3,583)	$	(132,557)



	Six Months Ended Jul 29, 2023
Balance at January 28, 2023	$	(129,168)	$	(1,584)	$	(3,321)	$	(134,073)
Gains (losses) arising during the period	5,999		1,513		(306)		7,206
Reclassification to net earnings for (gains) losses realized	—		(5,734)		44		(5,690)
Net other comprehensive income (loss)	5,999		(4,221)		(262)		1,516
Balance at July 29, 2023	$	(123,169)	$	(5,805)	$	(3,583)	$	(132,557)


	Three Months Ended Jul 30, 2022

Balance at April 30, 2022	$	(153,301)	$	13,400	$	(6,812)	$	(146,713)
Gains (losses) arising during the period	(10,561)		1,879		(81)		(8,763)
Reclassification to net earnings for gains realized	—		(1,039)		(9)		(1,048)
Net other comprehensive income (loss)	(10,561)		840		(90)		(9,811)
Balance at July 30, 2022	$	(163,862)	$	14,240	$	(6,902)	$	(156,524)


	Six Months Ended Jul 30, 2022

Balance at January 29, 2022	$	(135,861)	$	7,280	$	(6,968)	$	(135,549)
Gains (losses) arising during the period	(28,001)		9,442		71		(18,488)
Reclassification to net earnings for gains realized	—		(2,482)		(5)		(2,487)
Net other comprehensive income (loss)	(28,001)		6,960		66		(20,975)
Balance at July 30, 2022	$	(163,862)	$	14,240	$	(6,902)	$	(156,524)

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Details on reclassifications out of accumulated other comprehensive income (loss) to net earnings are (in thousands):


		Three Months Ended				Nine Months Ended				Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings		Three Months Ended				Six Months Ended				Location of (Gain) Loss Reclassified from Accumulated OCI into Earnings
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021				Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022

Derivative financial instruments designated as cash flow hedges:	Derivative financial instruments designated as cash flow hedges:										Derivative financial instruments designated as cash flow hedges:
Foreign exchange currency contracts	Foreign exchange currency contracts	$	(4,141)	$	1,270	$	(7,013)	$	2,561	Cost of product sales	Foreign exchange currency contracts	$	(311)	$	(1,198)	$	(6,204)	$	(2,872)	Cost of product sales

Interest rate swap	Interest rate swap	(30)		72		66		203		Interest expense	Interest rate swap	(148)		35		(276)		96		Interest expense
Less income tax effect	Less income tax effect	462		(157)		756		(329)		Income tax expense	Less income tax effect	68		124		746		294		Income tax expense
		(3,709)		1,185		(6,191)		2,435				(391)		(1,039)		(5,734)		(2,482)

Defined benefit plans:	Defined benefit plans:										Defined benefit plans:
Net actuarial loss amortization	Net actuarial loss amortization	13		106		55		317		Other expense	Net actuarial loss amortization	65		12		127		42		Other expense
Prior service credit amortization	Prior service credit amortization	(22)		(16)		(67)		(50)		Other expense	Prior service credit amortization	(40)		(22)		(79)		(45)		Other expense
Less income tax effect	Less income tax effect	1		(13)		(1)		(36)		Income tax expense	Less income tax effect	(2)		1		(4)		(2)		Income tax expense
		(8)		77		(13)		231				23		(9)		44		(5)
Total reclassifications during the period	Total reclassifications during the period	$	(3,717)	$	1,262	$	(6,204)	$	2,666		Total reclassifications during the period	$	(368)	$	(1,048)	$	(5,690)	$	(2,487)

(5)Accounts Receivable

Accounts receivable is summarized as follows (in thousands):


		Oct 29, 2022		Jan 29, 2022			Jul 29, 2023		Jan 28, 2023
Trade	Trade	$	280,044	$	299,160	Trade	$	282,367	$	306,737
Royalty	Royalty	38,866		33,790		Royalty	38,862		37,521
Other	Other	8,947		6,945		Other	5,264		6,235
		327,857		339,895			326,493		350,493
Less allowances	Less allowances	8,515		11,039		Less allowances	8,129		8,554
		$	319,342	$	328,856		$	318,364	$	341,939

Accounts receivable consists of trade receivables relating primarily to the Company’s wholesale business in Europe and, to a lesser extent, to its wholesale businesses in the Americas and Asia, royalty receivables relating to its licensing operations, credit card and retail concession receivables related to its retail businesses and certain other receivables. Other receivables generally relate to amounts due to the Company that result from activities that are not related to the direct sale of the Company’s products or collection of royalties.

(6)Inventories

Inventories consist of the following (in thousands):


		Oct 29, 2022		Jan 29, 2022			Jul 29, 2023		Jan 28, 2023
Raw materials	Raw materials	$	1,936	$	1,228	Raw materials	$	2,911	$	1,807
Work in progress	Work in progress	3		3		Work in progress	3		3
Finished goods	Finished goods	572,635		461,064		Finished goods	551,511		509,089
		$	574,574	$	462,295		$	554,425	$	510,899

The above balances include an allowance to write down inventories to the lower of cost or net realizable value of ~~$30.6~~$28.5 million and ~~$31.8~~$30.3 million as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, respectively.

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(7)Income Taxes

Effective Income Tax Rate

Income tax expense for the interim periods is computed using the income tax rate estimated to be applicable for the full fiscal year, adjusted for discrete items. The Company’s effective income tax rate was an expense of ~~34.2%~~29.2% for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to ~~28.7%~~35.8% for the ~~nine~~six months ended ~~October~~July 30, ~~2021.~~2022. The change in the effective income tax rate was primarily due to ~~a decrease in earnings,~~the discrete items, which included losses in certain tax jurisdictions for which the Company did not recognize an income tax benefit in fiscal ~~2023~~2024 compared to the same prior-year period.

Intra-Entity Transaction

During the third quarter of fiscal 2022, the Company completed an intra-entity transfer of intellectual property rights from certain U.S. entities to a wholly-owned Swiss subsidiary, more closely aligning the Company’s intellectual property rights with its business operations. This transaction resulted in a taxable gain in the U.S. The U.S. taxable gain generated by this intercompany transfer of intellectual property was primarily offset by the recognition of a deferred income tax asset in the Swiss subsidiary.

The Company is in discussions with the Swiss tax authority for potential income tax benefits related to additional business functions being performed in Switzerland. Although the timing and outcome of such discussions is uncertain, if a positive agreement is reached with the Swiss tax authority, it could result in a significant benefit to the Company’s consolidated financial statements.

Unrecognized Income Tax Benefit

The Company and its subsidiaries are subject to U.S. federal and foreign income tax, as well as income tax of multiple state and foreign local jurisdictions. From time-to-time, the Company is subject to routine income and other audits on various income tax matters around the world in the ordinary course of business. As of ~~October~~July 29, ~~2022,~~2023, no major income tax ~~and~~or other tax audits were ongoing.

As of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, the Company had ~~$61.2~~$65.4 million and ~~$57.5~~$64.4 million, respectively, of aggregate accruals for uncertain income tax positions, including penalties and interest. This includes an accrual of $19.9 million for the estimated transition tax (excluding interest) related to the 2017 Tax Cuts and Jobs Act (the “Tax Reform”) and $20.6 million for the intra-entity transfer of intellectual property rights from certain U.S. entities to a wholly-owned Swiss subsidiary, substantially offset by the related deferred income tax benefit recorded by the Swiss subsidiary. The Company reviews and updates the estimates used in the accrual for uncertain income tax positions, as appropriate, as more definitive information or interpretations become available from income taxing authorities, and on the completion of income tax audits, the receipt of assessments, expiration of statutes of limitations, or occurrence of other events.

During the second quarter of fiscal 2021, the Company became aware of a foreign withholding income tax regulation that could be interpreted to apply to certain of its previous transactions. The Company currently does not expect its exposure, if any, will have a material impact on its ~~condensed~~ consolidated financial position, results of operations or cash flows.

Indefinite Reinvestment Assertion

The Company has historically considered the undistributed earnings of its foreign subsidiaries to be indefinitely reinvested. As a result of the Tax Reform, the Company had a substantial amount of previously taxed earnings that could be distributed to the U.S. without additional U.S. taxation. As of ~~October~~July 29, ~~2022,~~2023, the Company determined that approximately ~~$25.7~~$59.5 million of such foreign earnings are not indefinitely reinvested. The incremental tax cost to repatriate these earnings to the U.S. is immaterial. The Company intends to indefinitely reinvest the remaining earnings from the Company’s foreign subsidiaries for which a deferred income tax liability has not already been recorded. The Company continues to evaluate its plans for reinvestment or repatriation of unremitted foreign earnings and regularly reviews its cash positions and determination of indefinite reinvestment of foreign earnings. If the Company determines that all or a portion of

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such foreign earnings are no longer indefinitely reinvested, the Company may be subject to additional foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax.

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(8)Segment Information

The Company’s businesses are grouped into five reportable segments for management and internal financial reporting purposes: Europe, Americas Retail, Americas Wholesale, ~~Europe,~~ Asia and Licensing. The Company’s Europe, Americas Retail, Americas Wholesale ~~Europe~~ and Licensing reportable segments are the same as their respective operating segments. Certain components of the Company’s Asia operating segment are separate operating segments based on region, which have been aggregated into the Asia reportable segment for disclosure purposes.

Management evaluates segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, asset impairment charges, net gains (losses) on lease modifications, restructuring charges and certain non-recurring credits (charges), if any. The Company believes this segment reporting reflects how its business segments are managed and how each segment’s performance is evaluated by the Company’s chief operating decision maker to assess performance and make resource allocation decisions.

Net revenue and earnings (loss) from operations are summarized (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Net revenue:	Net revenue:									Net revenue:
Europe										Europe	$	366,311	$	336,707	$	646,509	$	612,716
Americas Retail	Americas Retail	$	165,603	$	169,617	$	513,743	$	511,449	Americas Retail	167,568		181,655		311,112		348,140
Americas Wholesale	Americas Wholesale	53,181		58,999		171,733		154,287		Americas Wholesale	43,680		50,195		95,073		118,552
Europe		323,754		330,736		936,470		895,311
Asia	Asia	63,118		57,137		168,705		160,610		Asia	58,937		49,365		129,712		105,587
Licensing	Licensing	27,747		26,581		78,915		70,039		Licensing	28,016		24,768		51,904		51,168
Total net revenue	Total net revenue	$	633,403	$	643,070	$	1,869,566	$	1,791,696	Total net revenue	$	664,512	$	642,690	$	1,234,310	$	1,236,163
Earnings (loss) from operations:	Earnings (loss) from operations:									Earnings (loss) from operations:
Europe										Europe	$	47,196	$	34,538	$	48,789	$	52,428
Americas Retail	Americas Retail	$	11,365	$	24,070	$	49,552	$	82,260	Americas Retail	15,261		23,921		11,974		38,187
Americas Wholesale	Americas Wholesale	10,229		17,316		39,068		41,815		Americas Wholesale	11,065		11,442		24,158		28,839
Europe		36,222		44,509		88,650		100,124
Asia	Asia	(5)		(2,399)		(6,792)		(9,054)		Asia	(539)		(3,300)		3,291		(6,787)
Licensing	Licensing	24,849		24,402		70,499		63,987		Licensing	26,354		21,206		48,649		45,650
Total segment earnings from operations	Total segment earnings from operations	82,660		107,898		240,977		279,132		Total segment earnings from operations	99,337		87,807		136,861		158,317
Corporate overhead	Corporate overhead	(26,216)		(38,069)		(92,757)		(95,960)		Corporate overhead	(34,546)		(33,349)		(71,058)		(66,541)

Asset impairment charges1	Asset impairment charges1	(1,789)		(1,152)		(5,252)		(3,094)		Asset impairment charges1	(2,622)		(1,919)		(4,556)		(3,463)
Net gains (losses) on lease modifications2		146		(3,006)		1,654		(441)
Net gains on lease modifications2										Net gains on lease modifications2	2,431		907		2,431		1,508

Total earnings from operations	Total earnings from operations	$	54,801	$	65,671	$	144,622	$	179,637	Total earnings from operations	$	64,600	$	53,446	$	63,678	$	89,821

______________________________________________________________________

Notes:

1During the three and ~~nine~~six months ended ~~October~~July 29, 2023 and July 30, 2022, the Company recognized asset impairment charges related primarily to impairment of property and equipment ofand operating right-of-use assets related to certain retail locations resulting from under-performance and expected store closures. During the three and nine months ended October 30, 2021, the Company recognized asset impairment charges related primarily to certain operating lease ROU assets and property and equipment of certain retail stores resulting from lower revenue and future cash flow projections from the ongoing effects of the COVID-19 pandemic and expected store closures. Refer to Note 2 and Note 15 for more information regarding these asset impairment charges.

2During the three and ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, the Company recorded net gains ~~(losses)~~ on lease modifications related primarily to the early termination of certain lease agreements.

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The below presents information regarding geographic areas in which the Company operated. Net revenue is classified primarily based on the country where the Company’s customer is located (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Net revenue:	Net revenue:									Net revenue:
U.S.	U.S.	$	146,677	$	165,077	$	474,938	$	502,408	U.S.	$	145,181	$	159,134	$	279,133	$	328,261
Italy	Italy	63,983		62,835		193,044		175,191		Italy	81,290		72,695		141,660		129,061
South Korea										South Korea	34,901		28,125		82,490		64,009
Germany	Germany	45,582		46,314		130,486		133,196		Germany	47,960		49,063		80,324		84,904
Canada	Canada	43,111		41,447		127,671		102,512		Canada	37,636		43,982		70,210		84,560
South Korea		38,989		35,383		102,998		89,994
Spain	Spain	32,115		34,000		98,902		91,244		Spain	40,119		36,674		69,355		66,787
Other countries	Other countries	235,199		231,433		662,612		627,112		Other countries	249,409		228,249		459,234		427,413
Total product sales	Total product sales	605,656		616,489		1,790,651		1,721,657		Total product sales	636,496		617,922		1,182,406		1,184,995
Net royalties	Net royalties	27,747		26,581		78,915		70,039		Net royalties	28,016		24,768		51,904		51,168
Net revenue	Net revenue	$	633,403	$	643,070	$	1,869,566	$	1,791,696	Net revenue	$	664,512	$	642,690	$	1,234,310	$	1,236,163

Due to the seasonal nature of the Company’s business segments, the above net revenue and operating results are not necessarily indicative of the results that may be expected for the full fiscal year.

(9)Borrowings and Finance Lease Obligations

Borrowings and finance lease obligations are summarized (in thousands):


		Oct 29, 2022		Jan 29, 2022			Jul 29, 2023		Jan 28, 2023
Borrowings under credit facilities						Borrowings under credit facilities	$	127,335	$	70,304
Term loans	Term loans	$	29,038	$	48,253	Term loans	18,502		25,516
Finance lease obligations	Finance lease obligations	20,447		22,943		Finance lease obligations	17,333		19,865
Mortgage debt	Mortgage debt	17,356		17,860		Mortgage debt	16,842		17,189
Borrowings under credit facilities		123,152		12,201
Other	Other	3,350		3,092		Other	3,538		3,427
		193,343		104,349			183,550		136,301
Less current installments	Less current installments	39,626		43,379		Less current installments	37,507		40,380
Long-term debt and finance lease obligations	Long-term debt and finance lease obligations	$	153,717	$	60,970	Long-term debt and finance lease obligations	$	146,043	$	95,921

Term Loans

~~As a precautionary measure to ensure financial flexibility and maintain maximum liquidity in response to the COVID-19 pandemic, the~~The Company entered into term loans with certain banks primarily in Europe during fiscal 2021. These loans are primarily unsecured, have remaining terms of approximately two years and incur interest at annual rates ranging between 1.3% to ~~3.8%~~6.4%. As of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, the Company had outstanding borrowings of ~~$29.0~~$18.5 million and ~~$48.3~~$25.5 million, respectively, under these borrowing ~~arrangements, respectively.~~arrangements.

Finance Lease Obligations

~~During fiscal 2018, the~~The Company ~~relocated~~leases its European distribution center toin the ~~Netherlands. The~~Netherlands under a finance lease which primarily provides for monthly minimum lease payments through May 2027 with an effective interest rate of approximately 6%. The Company has also entered into finance leases for equipment used in its European distribution centers. These finance lease obligations totaled ~~$15.3~~$13.2 million and ~~$19.6~~$15.0 million as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, respectively.

The Company also has smaller finance leases related primarily to computer hardware and software. As of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, these finance lease obligations totaled ~~$5.1~~$4.1 million and ~~$3.4~~$4.9 million, respectively.

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Mortgage Debt

During fiscal 2017, the Company entered into a ten-year $21.5 million real estate secured loan (the “Mortgage Debt”) which is secured by the Company’s U.S. distribution center based in Louisville, Kentucky. The Mortgage Debt requires the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis if consolidated cash, cash equivalents, short-term investment balances and availability under borrowing arrangements fall below certain levels. In addition, the Mortgage Debt contains customary covenants, including covenants that limit or restrict the Company’s ability to incur liens on the mortgaged property and enter into certain contractual obligations. Upon the occurrence of an event of default under the Mortgage Debt, the lender may terminate the Mortgage Debt and declare all amounts outstanding to be immediately due and payable. The Mortgage Debt specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults and material judgment defaults. Interest on the Mortgage Debt was payable at a variable rate based on LIBOR. In May 2023, the Company amended the terms of the Mortgage Debt for the interest rate to be based on SOFR, effective May 1, 2023. The Company also amended its existing interest rate swap agreement, resulting in a swap fixed rate of approximately 3.14%.

Credit Facilities

~~2021~~Long-Term 2023 Credit Facility

During fiscal ~~2021,~~2023, the Company ~~entered into an amendment of~~amended and restated its senior secured asset-based revolving credit facility with Bank of America, N.A. and other lenders party thereto to extend the maturity date of the credit facility to December 20, 2027, among other changes (as amended, the ~~“2021~~“2023 Credit Facility”). In addition, the Company entered into an amendment agreement to permit, among other things, the exchange and subscription offering on April 12, 2023. Pursuant to the amendment, the 2023 Credit Facility is subject to earlier maturity as of 60 days before the maturity date of the Company’s 2024 Notes if satisfactory payment conditions have not been met during such 60 days period. The ~~2021~~amendment retains the 2023 Credit Facility’s existing provisions for earlier maturity as of 60 days before the maturity date of the Company’s 2024 Notes if (1) such notes have not been refinanced or converted into equity by that date or (2) arrangements satisfactory to the Lenders for the refinancing or conversion of the 2024 Notes have not been made. The 2023 Credit Facility provides for a borrowing capacity in an amount up to ~~$120~~$150 million, including a Canadian sub-facility up to $20 million, subject to a borrowing base. Based on applicable accounts receivable, inventory and ~~inventory balances as of October 29, 2022,~~eligible cash, subject to certain allowances, the Company could have borrowed up to ~~$110~~$118 million under the ~~2021~~2023 Credit ~~Facility.~~Facility as of July 29, 2023. The ~~2021~~2023 Credit Facility has an option to expand the borrowing capacity by up to ~~$180~~$150 million subject to certain terms and conditions, including the willingness of existing or new lenders to assume such increased amount. The ~~2021~~2023 Credit Facility is available for direct borrowings and the issuance of letters of credit, subject to certain letters of credit sublimits, and may be used for repayment of debt, working capital and other general corporate purposes. As of ~~October~~both July 29, ~~2022,~~2023 and January 28, 2023, the Company had ~~$9.6~~$8.1 million in outstanding standby letters of credit, no outstanding documentary letters of credit and no outstanding borrowings under the ~~2021~~2023 Credit Facility. ~~As of January 29, 2022,~~

Direct borrowings under the 2023 Credit Facility made by the Company ~~had $10.1 million in outstanding standby letters~~and its domestic subsidiaries bear interest at the U.S. base rate plus an applicable margin (varying from 0.25% to 0.75%) or at Term SOFR plus a spread adjustment plus an applicable margin (varying from 1.25% to 1.75%), provided that Term SOFR may not be less than zero. The U.S. base rate is based on the greater of ~~credit, no outstanding documentary letters~~(i) the U.S. prime rate, (ii) the federal funds rate, plus 0.5%, and (iii) Term SOFR plus a spread adjustment for a 30-day interest period, plus 1.0%, provided that the U.S. base rate may not be less than zero. Direct borrowings under the 2023 Credit Facility made by the Company’s Canadian subsidiaries bear interest at the Canadian prime rate plus an applicable margin (varying from 0.25% to 0.75%) or at the Canadian BA rate plus an applicable margin (varying from 1.25% to 1.75%), provided that the Canadian BA rate may not be less than zero. The Canadian rate is based on the greater of (i) the Canadian prime rate and (ii) the Canadian BA rate for a one-month interest period, plus 1.0%, provided that the Canadian prime rate may not be less than zero. The applicable margins are calculated

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quarterly and vary based on the average daily availability of the aggregate borrowing base. The Company is also obligated to pay certain commitment, letter of credit and ~~no outstanding borrowings under the 2021 Credit Facility.~~other fees customary for a credit facility of this size and type.

The ~~2021~~2023 Credit Facility contains various annual sustainability key performance targets, the achievement of which would result in an adjustment to the interest margin ranging from plus 5 basis points to minus 5 basis points per year and the commitment fee ranging from plus 1 basis point to minus 1 basis point per year. The 2023 Credit Facility requires the Company to comply with a fixed charge coverage ratio on a trailing four-quarter basis if a default or an event of default occurs under the ~~2021~~2023 Credit Facility or ~~generally if borrowings exceed 80%~~availability under the 2023 Credit Facility falls below the greater of 10% of the aggregate borrowing ~~base.~~base and $12.5 million. In addition, the ~~2021~~2023 Credit Facility contains customary covenants, including covenants that limit or restrict the Company and certain of its subsidiaries’ ability to: incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, merge or consolidate and enter into certain transactions with affiliates. Upon the occurrence of an event of default under the ~~2021~~2023 Credit Facility, the lenders may cease making loans, terminate the ~~2021~~2023 Credit Facility and declare all amounts outstanding to be immediately due and payable. The ~~2021~~2023 Credit Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, and material judgment defaults. The ~~2021~~2023 Credit Facility allows for both secured and unsecured borrowings outside of the ~~2021~~2023 Credit Facility up to specified amounts.

Long-Term 2022 Credit Facility

~~On May 5, 2022,~~During fiscal 2023, Guess Europe Sagl, a wholly owned subsidiary of the Company, entered into a credit agreement (the “Credit Agreement”) for a €250 million revolving credit facility (the “2022 Credit Facility”) with an initial five-year term. The Company has an option to extend the maturity date by up to two years and an option to expand the 2022 Credit Facility by up to €100 million, subject to certain conditions. At closing, there were no direct borrowings under the 2022 Credit Facility. The Company terminated certain European short-term borrowing arrangements totaling €120 million with various banks in Europe concurrently with the closing of the Credit Agreement.

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Borrowings under the 2022 Credit Facility bear interest based on the daily balance outstanding at the Euro Interbank Offered Rate (EURIBOR) plus an applicable margin (varying from 0.85% to 1.20%), provided that EURIBOR may not be less than ~~0.0%.~~zero. The 2022 Credit Facility carries a commitment fee equal to the available but unused borrowing capacity multiplied by 35% of an applicable margin (varying from 0.85% to 1.20%). The Company is also required to pay a utilization fee on the total amount of the loans outstanding under the 2022 Credit Facility at rates varying from 0.10% to 0.20%, depending on the balance outstanding. The applicable margins are calculated quarterly and vary based on the leverage ratio of the guarantor and its subsidiaries as set forth in the Credit Agreement.

The Credit Agreement contains various annual sustainability key performance targets, the achievement of which would result in an adjustment to the interest margin ranging from a plus 5 basis points to a minus 5 basis points per year. The Credit Agreement includes a financial covenant requiring a maximum leverage ratio of the guarantor and its subsidiaries. In addition, the Credit Agreement includes customary representations and warranties, affirmative and negative covenants and events of default. As of ~~October~~July 29, ~~2022,~~2023, the Company had ~~no outstanding standby letters~~$110.1 million of ~~credit, no outstanding documentary letters of credit, $109.6 million~~ outstanding borrowings and ~~$139.5~~$165.3 million available for future borrowings under the 2022 Credit Facility. As of January 28, 2023, the Company had $54.4 million of outstanding borrowings and $217.4 million available for future borrowings under the 2022 Credit Facility.

Other Credit Facilities

The Company, through its Chinese subsidiary, maintains a short-term uncommitted bank borrowing agreement that provides for a borrowing capacity up to $30 million, primarily for working capital purposes. ~~The~~As of both July 29, 2023 and January 28, 2023, the Company had ~~$12.2~~$14.0 million in outstanding borrowings under this ~~agreement as of both October 29, 2022 and January 29, 2022.~~agreement.

The Company, through its Japanese subsidiary, maintains a short-term uncommitted bank borrowing agreement that provides for a borrowing capacity up to ~~$3.4~~¥500 million($3.5 million), primarily for working

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capital purposes. The Company had ~~$1.3~~$3.2 million and $1.9 million in outstanding borrowings under this agreement as of ~~October~~July 29, ~~2022~~2023 and ~~no outstanding borrowings as of~~ January ~~29, 2022.~~28, 2023, respectively.

From time-to-time, the Company will obtain other financing in foreign countries for working capital to finance its local operations.

(10)Convertible Senior Notes and Related Transactions

Exchange and Subscription Agreements

In April 2023, the Company issued $275 million principal amount of the 2028 Notes in a private placement pursuant to separate, privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with a limited number of holders of its 2024 Notes and certain other investors, in each case pursuant to exemptions from registration under the Securities Act of 1933, as amended. Pursuant to the Exchange and Subscription Agreements, the Company exchanged approximately $184.9 million in aggregate principal amount of its 2024 Notes for $163.0 million in aggregate principal amount of new 2028 Notes and an aggregate of approximately $33.3 million in cash, representing accrued and unpaid interest and other consideration on the 2024 Notes, and issued $112.0 million aggregate principal amount of 2028 Notes for cash at par.Immediately following the closing of the aforementioned transactions, $115.1 million in aggregate principal amount of the 2024 Notes remained outstanding. In addition, the Company concurrently repurchased $42.8 million, including excise tax, of its common stock through broker-assisted market transactions, pursuant to the Company’s 2021 Share Repurchase Program.

The Company evaluated all exchanges and determined approximately 74% of the exchanged notes were accounted for as extinguishment of debt and approximately 26% were accounted for as modification of debt.As a result of these transactions, the Company recognized a $7.7 million loss on extinguishment of debt during the first quarter of fiscal 2024.

3.75% Convertible Senior Notes due 2028

In connection with the issuance of the 2028 Notes, the Company entered into an indenture (the “2028 Indenture”) with respect to the 2028 Notes with U.S. Bank Trust Company, N.A., as trustee (the “2028 Trustee”). The 2028 Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 3.75% payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2023. The 2028 Notes will mature on April 15, 2028, unless earlier repurchased or converted in accordance with their terms.

The 2028 Notes are convertible in certain circumstances into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion rate of 40.4858 shares of common stock per $1,000 principal amount of 2028 Notes, which is equivalent to an initial conversion price of approximately $24.70 per share, subject to adjustment upon the occurrence of certain events. In accordance with the terms of the 2028 Indenture, the Company has adjusted the conversion rate and the conversion price of the 2028 Notes for quarterly dividends exceeding $0.225 per share (the conversion price is currently approximately $24.60 per share). Prior to November 15, 2027, the 2028 Notes are convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2028 Notes.

Following certain corporate events described in the 2028 Indenture that occur prior to the maturity date, the conversion rate will be increased for a holder who elects to convert its 2028 Notes in connection with such corporate event in certain circumstances. The 2028 Notes are not redeemable prior to maturity, and no sinking fund is provided for the 2028 Notes. As of July 29, 2023, none of the conditions allowing holders of the 2028

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Notes to convert had been met. The Company expects to settle the principal amount of the 2028 Notes in fiscal 2029 in cash and any excess in shares.

The Company incurred approximately $5.9 million of debt issuance costs related to the 2028 Notes including third-party offering costs during the first quarter of fiscal 2024. Debt issuance costs were recorded as a contra-liability (other than $0.5 million expensed related to 2024 Notes that were subject to modification accounting) and are presented net against the 2028 Notes balance on the Company’s condensed consolidated balance sheets. These costs are being amortized to interest expense over the term of the 2028 Notes.

2.00% Convertible Senior Notes due 2024

In April 2019, the Company issued $300 million principal amount of the 2024 Notes in a private offering. In connection with the issuance of the 2024 Notes, the Company entered into an indenture (the ~~“Indenture”~~“2024 Indenture”) with respect to the Notes with U.S. Bank N.A., as trustee (the ~~“Trustee”~~“2024 Trustee”). The Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 2.00% payable semi-annually in arrears on April 15 and October 15 of each year. The Company incurred $5.3 million debt issuance costs, which was comprised of $3.8 million of discounts and commissions payable to the initial purchasers and third-party offering costs of approximately $1.5 million. These costs have been amortized to interest expense over the term of the 2024 Notes. As previously noted, $115.1 million of the 2024 Notes remains outstanding and will mature on April 15, 2024, unless earlier repurchased or converted in accordance with their terms.

The 2024 Notes are convertible in certain circumstances into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion rate of 38.7879 shares of common stock per $1,000 principal amount of 2024 Notes, which is equivalent to an initial conversion price of approximately $25.78 per share, subject to adjustment upon the occurrence of certain events. In accordance with the terms of the ~~indenture governing the Notes,~~2024 Indenture, the Company has adjusted the conversion rate and the conversion price of the 2024 Notes for quarterly dividends exceeding $0.1125 per share ~~(currently $25.21)~~(the conversion price is currently approximately $24.68 per share). Prior to November 15, 2023, the 2024 Notes are convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2024 Notes.

Following certain corporate events described in the 2024 Indenture that occur prior to ~~the~~such maturity date, the conversion rate will be ~~increased for a holder who elects to convert its Notes in connection with such corporate event in~~adjusted under certain circumstances. The 2024 Notes are not redeemable prior to maturity, and no sinking fund is provided for the 2024 Notes. As of ~~October~~July 29, ~~2022,~~2023, none of the conditions allowing holders of the 2024 Notes to convert had

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been met. The Company expects to settle the principal amount of the 2024 Notes in ~~2024~~fiscal 2025 in cash and any excess in shares.

On January 30, 2022, the Company adopted the authoritative guidance which simplifies the accounting for convertible instruments and contracts in an entity’s own equity using the modified retrospective method. Prior to adoption, the Company separated the Notes into liability and equity components. The liability component was recorded at fair value. The equity component represented the difference between the proceeds from the issuance of the Notes and the fair value of the liability component. The equity component was not subject to remeasurement as long as the equity component continued to meet the conditions for equity classification. The excess of the liability component over its carrying amount (“debt discount”) was being amortized to interest expense over the term of the Notes. During the three and nine months ended October 30, 2021, the Company recorded $2.8 million and $8.3 million, respectively, of interest expense related to the amortization of the debt discount. As a result of the adoption of the authoritative guidance on January 30, 2022, the Company derecognized the remaining unamortized debt discount on the Notes and recorded no interest expense related to the amortization of the debt discount during the three and nine months ended October 29, 2022. Refer to Note 1 for further information regarding this recently adopted guidance.

Debt issuance costs were comprised of $3.8 million of discounts and commissions payable to the initial purchasers and third-party offering costs of approximately $1.5 million. Debt issuance costs were recorded as a contra-liability and are presented net against the Notes balance on the Company’s condensed consolidated balance sheets. These costs are being amortized to interest expense over the term of the Notes.

The Notes consist of the following (in thousands):

Oct 29, 2022 Jan 29, 2022
Liability component:
Principal $ 300,000 $ 300,000
Unamortized debt discount1
— (27,498)
Unamortized issuance costs (1,269) (1,907)
Net carrying amount $ 298,731 $ 270,595
Equity component, net2
$ (759) $ 42,320


	Jul 29, 2023		Jan 28, 2023
2028 Notes1
Principal	$	275,000	$	—
Unamortized debt discount and issuance costs2	(8,890)		—
Net carrying amount	$	266,110	$	—

Fair value, net3	$	274,083	$	—

2024 Notes
Principal	$	115,144	$	300,000
Unamortized debt issuance costs	(245)		(1,069)
Net carrying amount	$	114,899	$	298,931

Fair value, net3	$	120,825	$	331,862

______________________________________________________________________

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Notes:

1~~Due to adoption~~For the three and six months ended July 29, 2023, the weighted average effective interest rate including amortization of debt discount and issuance costs on the ~~authoritative guidance,~~2028 Notes was 4.5%.

2The unamortized debt discount ~~was derecognized on January 30, 2022.~~

2~~As a~~related to the 2028 Notes is due to the result of ~~adoption~~the modification accounting for a portion of the ~~authoritative guidance on January 30, 2022, the equity component was eliminated and recorded as~~exchanged notes. This discount represents both an adjustment to retained earnings. As of October 29, 2022, the balance is associated with convertible bond hedge issuance costs and deferred income taxes, which are not impacted by the adoption. As of January 29, 2022, the balance was includedincrease in ~~paid-in capital within stockholders’ equity on the condensed consolidated balance sheets and is net of debt issuance costs and deferred taxes.~~

~~As of October 29, 2022 and January 29, 2022,~~ the fair value of the ~~Notes, net~~embedded conversion option, which is calculated as the difference between the fair value of ~~unamortized~~the embedded conversion option immediately before and after the exchange, and cash paid to modified noteholders. The change in conversion option value reduces the carrying amount of the convertible debt instrument with a corresponding increase in additional paid-in capital. The additional cash paid to modified noteholders increased the debt discount. This debt discount ~~and debt issuance costs, was approximately $293.6 million and $303.1 million, respectively.~~ is being amortized to interest expense over five years.

3The fair value of the Notes is determined based on inputs that are observable in the market and have been classified as Level 2 in the fair value hierarchy.

Interest expense for the Notes for the three and six months ended July 29, 2023 and July 30, 2022 consists of the following (in thousands):


	2028 Notes				2024 Notes
	Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
	Three Months Ended
Coupon interest	$	2,578	$	—	$	576	$	1,500
Amortization of debt discount and issuance costs	417		—		86		215
Total	$	2,995	$	—	$	662	$	1,715


	Six Months Ended


Coupon interest	$	2,979	$	—	$	1,922	$	3,000
Amortization of debt discount and issuance costs	479		—		284		429
Total	$	3,458	$	—	$	2,206	$	3,429

Convertible Bond Hedge and Warrant Transactions

In April 2023, in connection with the offering of the 2028 Notes, the Company entered into convertible note hedge transactions whereby the Company had the option to purchase a total of approximately ~~11.6~~11.1 million shares of its common stock at an initial strike price of approximately ~~$25.78~~$24.70 per ~~share, in each case subject to adjustment in certain circumstances.~~share. The total cost of the convertible note hedge transactions was ~~$61.0~~$51.8 million. In addition, the Company sold warrants whereby the holders of the warrants had the option to purchase a total of approximately ~~11.6~~11.1 millionshares of the Company’s common stock at an initial strike price of ~~$46.88~~$41.80 per share. The Company received ~~$28.1~~$20.2 million in cash proceeds from the sale of these warrants. Both the number

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of shares underlying the convertible note hedges and warrants and the strike price of the instruments are subject to customary adjustments. In accordance with the original terms of the convertible note hedge confirmations and warrant confirmations, ~~respectively,~~ the Company has adjusted the strike prices with respect to the convertible note hedges and ~~the~~ warrants for quarterly dividends exceeding ~~$0.1125~~$0.225 per share (currently ~~$45.84)~~approximately $24.60 per share and $41.64 per share, respectively). ~~Taken together, the~~The purchase of the convertible note hedges ~~and sale of the warrants are~~is intended to offset dilution from the conversion of the 2028 Notes to the extent the market price per share of the Company’s common stock exceeds the ~~adjusted~~then-applicable strike price of the convertible note hedges. The warrant transaction may have a dilutive effect with respect to the Company’s common stock to the extent the market price per share of the Company’s common stock exceeds the ~~adjusted~~then-applicable strike price of the warrants. The convertible note hedges and warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period.

~~As of October 29, 2022, there was no deferred income tax liability~~Concurrently, in connection with the ~~debt discount. As~~retirement of ~~January 29, 2022,~~$184.9 million in principal amount of the 2024 Notes, the Company entered into Partial Termination Agreements with certain financial institutions to unwind a portion of the convertible note hedge transactions and warrant transactions the Company had ~~a deferred income tax liability of $6.2 million~~entered into in connection with the ~~debt discount included~~issuance of the 2024 Notes. The terminated portion is in ~~deferred income tax assets on~~a notional amount corresponding to the amount of exchanged 2024 Notes. As a result, the Company received $7.2 million, which reduced the number of purchase options to approximately 4.6 million shares of common stock at an adjusted strike price of approximately $24.92 per share. Additionally, the Company paid $1.0 million related to terminated warrants, which reduced the number of shares that may be purchased pursuant to the warrants to 4.6 million shares of common stock at an adjusted strike price of approximately $45.31 per share. This transaction resulted in a

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$6.2 million net increase in additional paid-in capital in the Company’s ~~condensed~~ consolidated balance ~~sheet. As~~sheet as of ~~both October~~April 29, ~~2022~~2023. For the remaining portion of the convertible note hedge transactions and ~~January 29, 2022, the Company had a deferred income tax asset of $6.9 million~~warrant transactions entered into in connection with the 2024 Notes, both the number of shares underlying the instruments and the strike price of the instruments are subject to customary adjustments pursuant to their original terms. In accordance with the original terms of the convertible note hedge ~~transactions.~~confirmations and warrant confirmations, respectively, the Company has adjusted the strike prices with respect to the convertible note hedges and warrants for quarterly dividends exceeding $0.1125 per share (currently approximately $24.68 per share and $44.87 per share, respectively). The ~~net deferred income tax impact was included in deferred income tax assets on~~remaining convertible note hedges and warrant transactions continue to serve to partially offset the ~~Company’s condensed consolidated balance sheets.~~potential dilution arising from the conversion of the 2024 Notes that remain outstanding.

(11)Share-Based Compensation

The following summarizes the share-based compensation expense recognized under all of the Company’s stock plans (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Stock options	Stock options	$	706	$	862	$	2,018	$	2,676	Stock options	$	207	$	712	$	713	$	1,312
Stock awards/units	Stock awards/units	5,129		5,311		14,353		12,221		Stock awards/units	5,203		5,852		9,268		9,224
Employee Stock Purchase Plan	Employee Stock Purchase Plan	33		33		176		171		Employee Stock Purchase Plan	45		63		94		143
Total share-based compensation expense	Total share-based compensation expense	$	5,868	$	6,206	$	16,547	$	15,068	Total share-based compensation expense	$	5,455	$	6,627	$	10,075	$	10,679

~~Unrecognized~~As of July 29, 2023, there was no unrecognized compensation cost related to nonvested stock options and approximately $32.1 million of unrecognized compensation cost related to nonvested stock awards/~~units totaled approximately $1.5 million and $27.5 million, respectively, as of October 29, 2022.~~units. This cost is expected to be recognized over a weighted average period of ~~1.6~~1.7 years.

Grants

On ~~June~~May 12, 2023 and July 3, ~~2022,~~2023, the Company ~~made a grant of 451,830~~granted 471,373 and 5,153 nonvested stock units, respectively, to certain of its executive employees. These nonvested stock units are subject to certain performance-based or market-based vesting conditions.

~~Annual Grants~~

~~On May 10, 2022, the Company made an annual grant of 503,960 nonvested stock awards/units to its employees.~~

Performance-Based Awards

The Company has granted certain nonvested stock units subject to performance-based vesting conditions to select executive officers. Each award of nonvested stock units generally has an initial vesting period from the date of the grant through either (i) the end of the first fiscal year or (ii) the first anniversary of the date of grant, followed by annual vesting periods which may range from two-to-three years.

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The following summarizes the activity for nonvested performance-based units during the ~~nine~~six months ended ~~October~~July 29, ~~2022:~~2023:


		Number of Units	Weighted Average Grant Date Fair Value			Number of Units	Weighted Average Grant Date Fair Value
Nonvested at January 29, 2022		643,813	$	18.78
Nonvested at January 28, 2023					Nonvested at January 28, 2023	612,627	$	20.14
Granted	Granted	294,985	20.34		Granted	340,042	18.14
Vested	Vested	(314,453)	17.31		Vested	(278,757)	18.25
Forfeited	Forfeited	(11,718)	26.40		Forfeited	(184,365)	20.34
Nonvested at October 29, 2022		612,627	$	20.14
Nonvested at July 29, 2023					Nonvested at July 29, 2023	489,547	$	19.75

Market-Based Awards

The Company has granted certain nonvested stock units subject to market-based vesting conditions to select executive officers. These market-based awards include (i) units where the number of shares that may ultimately vest will equal 0% to 150% of the target number of shares, subject to the performance of the Company’s total stockholder return (“TSR”) relative to the TSR of a select group of peer companies over a

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three-year period and (ii) units scheduled to vest based on the attainment of certain absolute stock price levels over a four-year period. Vesting is also subject to continued service requirements through the vesting date.

The following summarizes the activity for nonvested market-based units during the ~~nine~~six months ended ~~October~~July 29, ~~2022:~~2023:

Number of Units Weighted Average Grant Date Fair Value
Nonvested at January 29, 2022 877,813 $ 14.22
Granted 156,845 14.66
Vested — —
Forfeited (87,871) 9.39
Nonvested at October 29, 2022 946,787 $ 14.75


	Number of Units	Weighted Average Grant Date Fair Value
Nonvested at January 28, 2023	946,787	$	14.75
Granted1	281,487	12.06
Vested1	(505,494)	6.38
Forfeited	—	—
Nonvested at July 29, 2023	722,780	$	19.55

Notes:

~~On April 22, 2022, the Company’s stockholders approved an amendment and restatement~~1As a result of the ~~Guess?, Inc. 2004 Equity Incentive Plan (the “2004 Plan”). The amendment and restatement~~achievement of certain market-based vesting conditions, there were 145,003 shares that vested in addition to the ~~2004 Plan (a) increased the aggregate~~original target number of shares of the Company’s common stock available for award grants under the 2004 Plan by 680,000 shares (from 29,100,000 shares to 29,780,000 shares), (b) changed the ratio at which a “Full-Value Award” (any award granted ~~under the 2004 Plan other than a stock option or stock appreciation right) counts against the total share limit under the 2004 Plan from 3.54 shares for every one share actually issued~~ in connection with such award to 1.6 shares for every one share actually issued in connection with such award, (c) extended the Company’s ability to grant new awards under the 2004 Plan through March 26, 2032, and (d) made members of the Company’s Board of Directors who are not employees of the Company or any of its subsidiaries eligible to receive award grants under the 2004 Plan.fiscal 2021.

(12)Related Party Transactions

The Company and its subsidiaries periodically enter into transactions with other entities or individuals that are considered related parties, including certain transactions with entities owned by, affiliated with, or for the respective benefit of, Paul Marciano, who is an executive and member of the Board of the Company, and Maurice Marciano, who is also a member of the Board, and certain of their children (the “Marciano Entities”).

Leases

The Company leases warehouse and administrative facilities, including the Company’s North American corporate headquarters in Los Angeles, California, from partnerships affiliated with the Marciano Entities and

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certain of their affiliates. There were four of these leases in effect as of ~~October~~July 29, ~~2022~~2023 with expiration or option exercise dates ranging from calendar years 2023 to 2030.

In August 2023, the Company (through a wholly-owned Canadian subsidiary) entered into a three-year lease extension through August 2026 with the related party landlord for the Company’s existing Canadian warehouse and administrative facility in Montreal, Quebec. All other material terms in the previously existing Canada lease (including base rent of approximately CAD$0.6 million (US$0.5 million) per year) remain the same.

Aggregate lease costs recorded under these four related party leases were approximately ~~$6.7~~$4.6 million and ~~$6.4~~$4.5 million for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, respectively. The Company believes that the terms of the related party leases ~~have not been significantly affected by the fact~~are no less favorable to the Company ~~and the lessors are related.~~than would have been available from unaffiliated third parties. Refer to Note 2 for more information on lease commitments.

Aircraft Arrangements

The Company periodically charters aircraft owned by the Marciano Entities through informal arrangements with the Marciano Entities and independent third-party management companies contracted by such Marciano Entities to manage their aircraft. The Company believes that the terms of the charter arrangements are no less favorable to the Company than would have been available from unaffiliated third parties. The total fees paid under these arrangements for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021~~2022 were approximately ~~$2.1~~$2.0 million and ~~$2.8~~$1.0 million, respectively.

Minority Investment

The Company owns a 30% interest in a privately held men’s footwear company (the “Footwear Company”) in which the Marciano Entities ~~also~~ own a 45% interest. In December 2020, the Company provided the Footwear Company with a revolving credit facility for $2.0 million, which provides for an annual interest rate

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of 2.75% and matures in November 2023. As of ~~October~~both July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, the Company had a note receivable of $0.4 million ~~and $0.2 million, respectively,~~ included in other assets in its condensed consolidated balance sheets related to outstanding borrowings by the Footwear Company under this revolving credit facility.

In May 2022, the Company entered into a Fulfillment Services Agreement with the Footwear Company under which the Company will provide certain fulfillment services for the Footwear Company’s U.S. wholesale and e-commerce businesses from the Company’s U.S distribution center on a cost-plus 5% basis. The Footwear Company also pays rent to the Company for the use of a small office space in the Company’s U.S. headquarters. In June 2022, the Company (through a wholly-owned Swiss subsidiary) entered into a Distributorship Agreement with the Footwear Company under which the Company was designated as the exclusive distributor (excluding e-commerce) for the Footwear Company in the European Union and other specified countries. The Distributorship Agreement ~~provides~~provided for (i) the Company to receive a 35% discount from the Footwear Company’s wholesale prices, (ii) no minimum sales requirements or advertising spending requirements for the ~~Company;~~Company, (iii) an initial 15 month term with annual renewals thereafter and (iv) other standard terms and conditions for similar arrangements. In May 2023, the Distributorship Agreement was amended to (i) reflect a reduction in the amount of sales services to be performed by the Company, (ii) revise the wholesale discount to 22% and (iii) provide an annual 2% advertising commitment by the Company. During the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, there were noapproximately $7,000 in fees ~~paid~~received with respect to the U.S. fulfillment services, approximately $9,000 in fees received with respect to office rent and ~~under~~less than $5,000 in amounts paid related to the distributorship arrangements. During the six months ended July 30, 2022, there were no fees received with respect to the U.S. fulfillment services, approximately $8,000 in fees received with respect to office rent and less than $5,000 in amounts paid related to the distributorship arrangements.

Vendor Purchases

The Company purchases faux fur products from a privately-held fashion accessories company (the “Fashion Company”). Mr. Maurice Marciano, Mr. Paul Marciano and Mr. Carlos Alberini own on a combined basis 20% of the outstanding common equity interests in the Fashion Company (with the Marcianos jointly owning 16% and Mr. Alberini owning 4%). The total payments made by the Company to the Fashion Company were approximately ~~$3.4~~$0.4 million and ~~$2.5~~$1.5 million for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, respectively. The Company believes that the price paid by the Company for the Fashion Company’s products and the terms of the transactions between the Company and the Fashion Company have not been affected by this passive investment of Messrs. Marcianos and Mr. Alberini in the Fashion Company.

Vendor Collaboration

During April 2023, the Company entered into a co-branding collaboration arrangement in connection with a large-scale music festival with a privately-held alcoholic beverage company (the “Beverage Company”) in which the Marciano Entities hold an approximately 15% ownership interest. The co-branding arrangement provided for (i) the Beverage Company to pay a $100,000 fee, provide certain beverage products, facilitate the acquisition of additional third-party sponsors for the event and co-brand its social media posts with the Company and (ii) the Company to engage social-media influencers to attend the event and promote both companies through social-media posts, and provide promotional travel, lodging, hospitality and other ancillary expenses for select attendees at the co-branded event.

(13) Commitments and Contingencies

Investment Commitments

As of ~~October~~July 29, ~~2022,~~2023, the Company had an unfunded commitment to invest ~~€11.0~~€8.8 million ($~~10.9~~9.7 million) in a group of private equity ~~fund.~~funds. Refer to Note 15 for further information.

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Legal and Other Proceedings

The Company is involved in legal proceedings, arising both in the ordinary course of business and otherwise, including the proceedings described below as well as various other claims and other matters incidental to the Company’s business. Unless otherwise stated, the resolution of any particular proceeding is

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not currently expected to have a material adverse impact on the Company’s financial position, results of operations or cash flows. Even if such an impact could be material, the Company may not be able to estimate the reasonably possible loss or range of loss until developments in the proceedings have provided sufficient information to support an assessment.

The Company has received customs tax assessment notices from the Italian Customs Agency (“ICA”) regarding its customs tax audit of one of the Company’s European subsidiaries for the period from July 2010 through December 2012. Such assessments totaled €9.8 million ($~~9.8~~10.8 million), including potential penalties and ~~interest.~~interest through such assessment dates. The Company strongly disagreed with the ICA’s positions and therefore filed appeals with the Milan First Degree Tax Court (“MFDTC”). Those appeals were split into a number of different cases that were then heard by different sections of the MFDTC. The MFDTC ruled in favor of the Company on all of these appeals. The ICA subsequently appealed €9.7 million ($~~9.7~~10.7 million) of these favorable MFDTC judgments with the Appeals Court. To date, €8.5 million ($~~8.5~~9.4 million) have been decided in favor of the Company and €1.2 million ($~~1.2~~1.3 million) have been decided in favor of the ICA. The Company believes that the unfavorable Appeals Court ruling is incorrect and inconsistent with the prior rulings on similar matters by both the MFDTC and other judges within the Appeals Court, and has appealed the decision to the Supreme Court. The ICA has appealed most of the favorable Appeals Court rulings to the Supreme Court. To date, of the cases that have been appealed to the Supreme Court, €0.4 million ($0.4 million) have been decided in favor of the Company based on the merits of the case and ~~€1.1~~€1.3 million ($~~1.1~~1.4 million) have been remanded back to the lower court for further consideration. There can be no assurances the Company will be successful in the remaining appeals. It also continues to be possible that the Company will receive similar or even larger assessments for periods subsequent to December 2012 or other claims or charges (including additional interest amounts) related to the matter in the future. Although the Company believes that it has a strong position and will continue to vigorously defend this matter, it is unable to predict with certainty whether or not these efforts will ultimately be successful or whether the outcome will have a material impact on the Company’s financial position, results of operations or cash flows.

On January 11, 2022, Legion Partners Holdings, LLC (“Legion”), a stockholder of Guess common stock, sent two letters to the Board of Directors of Guess (the “Board”). One letter sought books and records pursuant to Section 220 of the Delaware General Corporation Law (the “220 Demand”) to purportedly investigate potential breaches of fiduciary duties by the Board in connection with the Board’s renomination of Mr. Maurice Marciano to the Board and certain related party transactions. The second letter demanded that the Board take action to cause the Company to investigate and commence legal proceedings for breach of fiduciary duty claims the Company may have in connection with alleged misconduct of Mr. Paul Marciano, the Board’s oversight of and response to such alleged misconduct, and the Board’s review and approval of certain related-party transactions (the “Litigation Demand”). On January 31, 2022, the Company responded to both letters informing Legion that the Company was reviewing the formation of a committee in response to the Litigation Demand and detailing the deficiencies with the 220 Demand under Delaware law, including that Legion failed to state a proper purpose and that the scope of Legion’s requested books and records was overbroad. The Company subsequently formed a Demand Review Committee (the “DRC”), which has been engaged in an ongoing review of the matters detailed in the Litigation Demand.

On April 14, 2022, the Employees Retirement System of Rhode Island (“ERSRI”), a stockholder of Guess common stock, sent a letter to the Company seeking books and records pursuant to Section 220 of the Delaware General Corporation Law to purportedly investigate potential breaches of fiduciary duties by the Board in connection with alleged misconduct of Mr. Paul Marciano, the Board’s oversight of and response to such alleged misconduct, and the Board’s review and approval of certain related-party transactions. The Company responded to the letter on April 19, 2022, negotiated a Confidentiality Agreement, and has completed its production of books and records to ERSRI.

On September 19, 2022, ERSRI filed a stockholder derivative lawsuit styled Employees Retirement System of Rhode Island, derivatively on behalf of Guess?, Inc. v. Paul Marciano, et al., ~~was~~in the Court of Chancery of the State of Delaware against the Company, as the nominal defendant, Mr. Paul Marciano and

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other members of the Board, alleging breach of fiduciary duties relating to the continued service of Mr. Paul Marciano as a director of the Board and as the Company’s Chief Creative Officer following prior allegations of improper conduct by him relating to the treatment of models and other women. ERSRI did not make a demand on the Board before instituting the lawsuit and alleges such demand would have been futile. On October 28, 2022, ERSRI amended the complaint to include an additional basis for alleging demand futility. ERSRI seeks monetary damages and possible injunctive relief.

On February 16, 2023, Legion filed a stockholder derivative lawsuit styled Legion Partners Holdings, LLC, derivatively on behalf of Guess?, Inc. v. Paul Marciano, et al. in the Court of Chancery of the State of Delaware against the Company, as the nominal defendant, Mr. Paul Marciano and other members of the Board, ~~of Directors of the Company,~~ alleging breach of fiduciary duties relating to the continued service of Mr. Paul Marciano ~~as a director of~~to the ~~Board of Directors and as~~Company following the ~~Company’s Chief Creative Officer following~~ prior allegations ~~of improper conduct by him relating to~~described in the ~~treatment of models and other women. The~~ERSRI stockholder did not make a demand on the Company’s Board of Directors before instituting the lawsuit and alleges such demand would have been futile. On October 28, 2022, the stockholder amended the complaint to include an additional basis for alleging demand futility. The stockholderderivative lawsuit. Legion seeks monetary damages and possible injunctive relief. On March 15, 2023, the Company moved for a more definite statement and moved to dismiss or stay the action. On May 9, 2023, Legion voluntarily dismissed the claims against Mr. Paul Marciano without prejudice.

On June 3, 2023, the Company received a letter from an individual seeking to settle certain claims against Mr. Paul Marciano and the Company relating to allegations of improper treatment of the individual by Mr. Paul Marciano. The letter did not make an assertion of damages. The individual is represented by the same attorney who represented plaintiffs in similar actions in 2021 and 2022, which were settled out of court in 2022 to avoid the cost of litigation and without admitting liability or fault. No complaint has been filed with respect to the allegations in the June 2023 letter, and Mr. Paul Marciano and the Company dispute the allegations fully.

Redeemable Noncontrolling Interests

The Company is party to a put arrangement with respect to the common securities that represent the remaining noncontrolling interest for its majority-owned subsidiary, Guess Brasil Comércio e Distribuição S.A. (“Guess Brazil”). The put arrangement for Guess Brazil, representing 40% of the total outstanding equity interest of that subsidiary, may be exercised at the discretion of the noncontrolling interest holder by providing written notice to the Company every third anniversary beginning in March 2019, subject to certain time restrictions. The redemption value of the Guess Brazil put arrangement is based on a multiple of Guess Brazil’s earnings before interest, taxes, depreciation and amortization subject to certain adjustments and is classified as a redeemable noncontrolling interest outside of permanent equity in the Company’s condensed consolidated balance sheet. The carrying value of the redeemable noncontrolling interest related to Guess Brazil was ~~$0.4~~$0.6 million and $0.5 million as of ~~both October~~July 29, ~~2022~~2023 and January ~~29, 2022.~~

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28, 2023, respectively.

The Company (through a wholly-owned European subsidiary) ~~is also~~was previously party to a put arrangement with respect to the securities that ~~represent~~represented the remaining noncontrolling interest for its majority-owned Russian subsidiary, Guess? CIS, LLC (“Guess CIS”), which was established through a majority-owned joint venture during fiscal 2016. The put arrangement for Guess CIS (the “Put Option”), representing 30% of the total outstanding equity interest of that subsidiary, ~~may be exercised~~was exercisable at the sole discretion of the noncontrolling interest holder (the “Minority Holder”) by providing written notice to the Company ~~during the period after December 28, 2020, the fifth anniversary of the agreement,~~ through December 31, 2025. The redemption value of the Put Option iswas based on a multiple of Guess CIS’s earnings before interest, taxes, depreciation and amortization subject to certain adjustments and iswas classified as a redeemable noncontrolling interest outside of permanent equity in the Company’s condensed consolidated balance sheet. The carrying value of the redeemable noncontrolling interest related to Guess CIS was €8.0 million ~~and €8.1 million~~ as of ~~October 29, 2022 and~~ January ~~29, 2022, respectively.~~28, 2023.

In November 2022, the Minority Holder exercised the Put Option, triggering a contractual obligation for the Company to purchase the Minority Holder’s 30% interest in Guess CIS. Following a comprehensive review of the various economic sanctions imposed by the United States and European governments with respect to Russia, ~~earlier this year,~~ and obtaining guidance from the U.S. Department of the Treasury’s Office of Foreign Assets Control, ~~(“OFAC”),~~ the Company ~~has~~ determined that its acquisition of the Minority Holder’s 30% interest in Guess CIS pursuant to the Company’s pre-sanctions contractual ~~obligations~~obligation to fulfill the Minority Holder’s exercise of the Put Option is

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was not prohibited by current economic sanctions, including the U.S. ban on new investment in Russia. As such, following the exercise of the Put Option by the Minority Holder, the Company ~~expects~~and the Minority Holder entered into an agreement to ~~fulfill its pre-sanctions contractual obligation to purchase~~proceed with the Company’s acquisition of the Minority Holder’s 30% interest ~~as required~~in Guess CIS for a purchase price of €8.0 million, subject to the formal approval of the acquisition by the ~~terms~~relevant Russian government commission and certain other customary conditions. This formal approval was received, and the purchase was completed in May 2023. As a result of ~~the~~this transaction, there was no redeemable noncontrolling interest related to Guess CIS ~~agreements entered into during fiscal 2016 with the Minority Holder. The purchase is currently expected to be completed by the end~~as of ~~the first quarter of fiscal 2024.~~July 29, 2023.

The Company’s European subsidiary, Guess Europe SAGL has also ~~counter guaranteed~~counter-guaranteed up to $900,000 of Guess CIS’s obligations under its local Russian guarantee line, as required by certain lease agreements.

The redeemable noncontrolling interests of the Guess Brazil and Guess CIS put arrangements are recorded at the greater of their carrying values, adjusted for their share of the allocation of income or loss, dividends and foreign currency translation adjustments, or redemption values. During the nine months ended October 29, 2022, there was no redeemable noncontrolling interest redemption value adjustment. During the nine months ended October 30, 2021, the Company had $5.7 million in redeemable noncontrolling interest redemption value adjustment.

A reconciliation of the total carrying amount of redeemable noncontrolling interests is (in thousands):


		Nine Months Ended					Six Months Ended
		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022
Beginning balance	Beginning balance	$	9,500	$	3,920	Beginning balance	$	9,154	$	9,500
Redeemable noncontrolling interest redemption value adjustment		—		5,654

Foreign currency translation adjustment	Foreign currency translation adjustment	(1,066)		177		Foreign currency translation adjustment	0		777

Purchase of redeemable noncontrolling interest						Purchase of redeemable noncontrolling interest	(8,581)		—
Ending balance	Ending balance	$	8,434	$	9,751	Ending balance	$	573	$	10,277

(14)Defined Benefit Plans

Supplemental Executive Retirement Plan

The Company’s Supplemental Executive Retirement Plan (“SERP”) provides select employees who satisfy certain eligibility requirements with certain benefits upon retirement, termination of employment, death, disability or a change in control of the Company, in certain prescribed circumstances. As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has made periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP. The cash surrender values of the insurance policies were ~~$61.2~~$63.6 million and ~~$70.9~~$64.4 million as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, respectively, and were included in other assets in the

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Company’s condensed consolidated balance sheets. As a result of changes in the value of the insurance policy investments, the Company recorded immaterial unrealized gains in other income (expense) during the three and six months ended July 29, 2023, respectively, and unrealized losses of ~~$4.8~~$0.2 million and ~~$8.3~~$3.5 million in other income ~~and expense~~(expense) during the three and ~~nine~~six months ended ~~October 29,~~July 30, 2022, ~~respectively, and unrealized gains of $0.1 million and $2.3 million in other income and expense during the three and nine months ended October 30, 2021.~~respectively. The projected benefit obligation was ~~$49.2~~$42.3 million and ~~$49.4~~$42.4 million as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, respectively, and was included in accrued expenses and other current liabilities and other long-term liabilities in the Company’s condensed consolidated balance sheets depending on the expected timing of payments. SERP benefit payments of $0.5 million were made during each of the three months ended July 29, 2023 and ~~$1.4~~July 30, 2022. SERP benefit payments of $1.0 million were made during each of the ~~three and nine~~six months ended ~~October~~July 29, ~~2022, respectively. SERP benefit payments of $0.5 million~~2023 and ~~$1.4 million were made during the three and nine months ended October~~July 30, ~~2021, respectively.~~2022.

Foreign Pension Plans

In certain foreign jurisdictions, primarily in Switzerland, the Company is required to guarantee the returns on Company-sponsored defined contribution plans in accordance with local regulations. The Company’s contributions must be made in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary and gender.

As of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, the foreign pension plans had a total projected benefit obligation of ~~$39.4~~$51.9 million and ~~$42.7~~$47.4 million, respectively, and plan assets held in independent investment fiduciaries of ~~$35.1~~$45.2 million and ~~$38.0~~$41.2 million, respectively. The net liability of ~~$4.3~~$6.7 million and ~~$4.7~~$6.2 million was included in other long-term liabilities in the Company’s condensed consolidated balance sheets as of ~~October~~July 29, ~~2022~~2023 and January 28, 2023, respectively.

29 ~~2022, respectively.~~

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The components of net periodic defined benefit pension cost related to the Company’s defined benefit plans are (in thousands):

SERP Foreign Pension Plans Total
Three Months Ended Oct 29, 2022
Service cost $ — $ 733 $ 733
Interest cost 333 53 386
Expected return on plan assets — (66) (66)
Net amortization of unrecognized prior service credit — (22) (22)
Net amortization of actuarial losses — 13 13
Net periodic defined benefit pension cost $ 333 $ 711 $ 1,044
Nine Months Ended Oct 29, 2022
Service cost $ — $ 2,249 $ 2,249
Interest cost 1,000 165 1,165
Expected return on plan assets — (203) (203)
Net amortization of unrecognized prior service credit — (67) (67)
Net amortization of actuarial losses 17 38 55
Net periodic defined benefit pension cost $ 1,017 $ 2,182 $ 3,199


	SERP		Foreign Pension Plans		Total

	Three Months Ended Jul 29, 2023
Service cost	$	—	$	935	$	935
Interest cost	466		229		695
Expected return on plan assets	—		(203)		(203)
Net amortization of unrecognized prior service credit	—		(40)		(40)
Net amortization of actuarial losses	—		65		65
Net periodic defined benefit pension cost	$	466	$	986	$	1,452

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	Six Months Ended Jul 29, 2023
Service cost	$	—	$	1,848	$	1,848
Interest cost	931		453		1,384
Expected return on plan assets	—		(402)		(402)
Net amortization of unrecognized prior service credit	—		(79)		(79)
Net amortization of actuarial losses	—		127		127
Net periodic defined benefit pension cost	$	931	$	1,947	$	2,878


	SERP		Foreign Pension Plans		Total

	Three Months Ended Jul 30, 2022
Service cost	$	—	$	741	$	741
Interest cost	334		55		389
Expected return on plan assets	—		(67)		(67)
Net amortization of unrecognized prior service credit	—		(22)		(22)
Net amortization of actuarial losses	—		12		12
Net periodic defined benefit pension cost	$	334	$	719	$	1,053

SERP Foreign Pension Plans Total
Three Months Ended Oct 30, 2021
Service cost $ — $ 781 $ 781
Interest cost 289 18 307
Expected return on plan assets — (51) (51)
Net amortization of unrecognized prior service credit — (16) (16)
Net amortization of actuarial losses 21 85 106
Net periodic defined benefit pension cost $ 310 $ 817 $ 1,127
Nine Months Ended Oct 30, 2021
Service cost $ — $ 2,364 $ 2,364
Interest cost 866 56 922
Expected return on plan assets — (155) (155)
Net amortization of unrecognized prior service credit — (50) (50)
Net amortization of actuarial losses 61 256 317
Net periodic defined benefit pension cost $ 927 $ 2,471 $ 3,398




	Six Months Ended Jul 30, 2022
Service cost	$	—	$	1,516	$	1,516
Interest cost	667		112		779
Expected return on plan assets	—		(137)		(137)
Net amortization of unrecognized prior service credit	—		(45)		(45)
Net amortization of actuarial losses	17		25		42
Net periodic defined benefit pension cost	$	684	$	1,471	$	2,155

(15)Fair Value Measurements

Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.

Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e. interest rates, yield curves, etc.) and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

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Level 3—Unobservable inputs that reflect assumptions about what market participants would use in pricing the asset or liability. These inputs are based on the best information available, including the Company’s own data.

The following presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands):


		Fair Value Measurements								Fair Value Measurements									Fair Value Measurements								Fair Value Measurements
		at Oct 29, 2022								at Jan 29, 2022									at Jul 29, 2023								at Jan 28, 2023
Recurring Fair Value Measures	Recurring Fair Value Measures	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		Recurring Fair Value Measures	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:	Assets:																	Assets:
Foreign exchange currency contracts	Foreign exchange currency contracts	$	—	$	15,375	$	—	$	15,375	$	—	$	7,133	$	—	$	7,133	Foreign exchange currency contracts	$	—	$	754	$	—	$	754	$	—	$	2,219	$	—	$	2,219
Interest rate swap	Interest rate swap	—		1,317		—		1,317		—		—		—		—		Interest rate swap	—		1,111		—		1,111		—		1,034		—		1,034

Total	Total	$	—	$	16,692	$	—	$	16,692	$	—	$	7,133	$	—	$	7,133	Total	$	—	$	1,865	$	—	$	1,865	$	—	$	3,253	$	—	$	3,253
Liabilities:	Liabilities:																	Liabilities:
Foreign exchange currency contracts	Foreign exchange currency contracts	$	—	$	1,207	$	—	$	1,207	$	—	$	—	$	—	$	—	Foreign exchange currency contracts	$	—	$	10,960	$	—	$	10,960	$	—	$	16,704	$	—	$	16,704
Interest rate swap	Interest rate swap	—		—		—		—		—		74		—		74		Interest rate swap	—		—		—		—		—		—		—		—
Deferred compensation obligations	Deferred compensation obligations	—		14,753		—		14,753		—		15,794		—		15,794		Deferred compensation obligations	—		16,511		—		16,511		—		15,187		—		15,187
Total	Total	$	—	$	15,960	$	—	$	15,960	$	—	$	15,868	$	—	$	15,868	Total	$	—	$	27,471	$	—	$	27,471	$	—	$	31,891	$	—	$	31,891

Foreign exchange currency contracts may be entered into by the Company to hedge the future payment of inventory and intercompany transactions by non-U.S. subsidiaries. Periodically, the Company may also use

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foreign exchange currency contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries. The fair values of the Company’s foreign exchange currency contracts are based on quoted foreign exchange forward rates at the reporting date. The fair values of the Company’s interest rate swaps are based upon inputs corroborated by observable market data. Deferred compensation obligations to employees are adjusted based on changes in the fair value of the underlying employee-directed investments. Fair value of these obligations is based upon inputs corroborated by observable market data.

The Company included ~~€3.7~~€4.7 million ($~~3.7~~5.2 million) and ~~€3.6~~€3.7 million ($4.0 million) in other assets in the Company’s condensed consolidated balance sheets related to its investment in a group of private equity ~~fund~~funds as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, respectively. The Company uses net asset value per share as a practical expedient to measure the fair value of this investment and has not included this investment in the fair value hierarchy as disclosed above. As of ~~October~~July 29, ~~2022,~~2023, the Company had an unfunded commitment to invest an additional ~~€11.0~~€8.8 million ($~~10.9~~9.7 million) in the private equity ~~fund.~~funds.

The fair values of the Company’s debt instruments (see Note 9) are based on the amount of future cash flows associated with each instrument discounted using the Company’s incremental borrowing rate. As of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, the carrying value was not materially different from fair value, as the interest rates on the Company’s debt approximated rates currently available to the Company. The fair value of the Company’s Notes (see Note 10) is determined based on inputs that are observable in the market and have been classified as Level 2 in the fair value hierarchy.

The carrying amount of the Company’s remaining financial instruments, which principally include cash and cash equivalents, trade receivables, accounts payable and accrued expenses, approximates fair value due to the relatively short maturity of such instruments.

Long-Lived Assets

Long-lived assets, such as property and equipment and operating lease ROU assets, are reviewed for impairment quarterly or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The majority of the Company’s long-lived assets relate to its retail operations, which consist primarily of regular retail and flagship locations. The Company considers each individual regular retail location as an asset group for impairment testing, which is the lowest level at which individual cash flows

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can be identified. The Company also evaluates impairment risk for retail locations that are expected to be closed in the foreseeable future. The Company has flagship locations that are used as a regional marketing tool to build brand awareness and promote the Company’s current product. Provided the flagship locations continue to meet the appropriate criteria, impairment for these locations is tested at a reporting unit level similar to goodwill since they do not have separately identifiable cash flows.

An asset is considered to be impaired if the Company determines that the carrying value may not be recoverable based upon its assessment of the asset’s ability to continue to generate earnings from operations and positive cash flow in future periods or if significant changes in the Company’s strategic business objectives and utilization of the assets occurred. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows adjusted for lease payments, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value. The Company uses estimates of market participant rents to calculate fair value of ROU assets and discounted future cash flows of the asset group to quantify fair value for other long-lived assets. These nonrecurring fair value measurements are considered Level 3 inputs as defined above.

The impairment loss calculations require management to apply judgment in estimating future cash flows and the discount rates that reflect the risk inherent in future cash flows. Future expected cash flows for assets in regular retail locations are based on management’s estimates of future cash flows over the remaining lease period or expected life, if shorter. For expected location closures, the Company will evaluate whether it is necessary to shorten the useful life for any of the assets within the respective asset group. The Company will use this revised useful life when estimating the asset group’s future cash flows. The Company considers historical trends, expected future business trends and other factors when

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estimating the future cash flow for each regular retail location. The Company also considers factors such as the following: the Russia-Ukraine conflict, including the sanctions and trade restrictions imposed on Russia in response to the conflict; the local environment for each regular retail location, including mall traffic and competition; the Company’s ability to successfully implement strategic initiatives; and the ability to control variable costs such as cost of sales and payroll and, in some cases, renegotiate lease costs.

As discussed further in Note 1, macroeconomic conditions, including inflation, higher interest rates, foreign exchange rate fluctuations, declines in consumer spending, the ~~COVID-19 pandemic~~impact of the ongoing conflict in Ukraine and ~~other global economic conditions have~~the lingering effects of public health crises continued to negatively ~~impacted~~impact the Company’s financial results during the three and ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, and could continue to impact the Company’s operations in ways the Company is not able to predict ~~today due to the evolving dynamic situation.~~today. The Company has made reasonable assumptions and judgments to determine the fair value of the assets tested based on the facts and circumstances that were available as of the reporting date. If actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values, there may be additional exposure to future impairment losses that could be material to the Company’s results of operations.

The Company recorded asset impairment charges of ~~$1.8~~$2.6 million and ~~$5.3~~$4.6 million during the three and ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, respectively. The Company recorded asset impairment charges of ~~$1.2~~$1.9 million and ~~$3.1~~$3.5 million during the three and ~~nine~~six months ended ~~October~~July 30, ~~2021,~~2022, respectively. The Company recognized ~~$1.8~~$2.5 million and ~~$5.2~~$4.5 million in impairment of property and equipment related to certain retail locations primarily in ~~Europe~~the Americas and ~~Asia~~Europe driven by under-performance and expected store closures during the three and ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, respectively. The Company recognized ~~$0.5~~$1.8 million and ~~$2.4~~$3.4 million in impairment of property and equipment related to certain retail locations primarily in Europe and Asia during the three and ~~nine~~six months ended ~~October~~July 30, ~~2021,~~2022, respectively. The Company recognized immaterial impairment charges on ROU assets ~~primarily in Europe~~ during the three and ~~nine~~six months ended ~~October~~July 29, ~~2022. The Company recognized $0.7 million in impairment on ROU assets primarily in Europe in the three~~2023 and ~~nine months ended October~~July 30, ~~2021. Refer to Note 2 for further information on impairment charges recognized on operating lease ROU assets.~~2022.

Goodwill

Goodwill is tested annually for impairment or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. This determination is made at the reporting unit level which may be either an operating

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segment or one level below an operating segment if discrete financial information is available. Two or more reporting units within an operating segment may be aggregated for impairment testing if they have similar economic characteristics.

~~The COVID-19 pandemic and other global economic conditions continued to impact the Company’s businesses during the first nine months of fiscal 2023.~~ During the three months ended ~~October~~July 29, ~~2022,~~2023, the Company assessed qualitative factors and determined that it is not more likely than not that the fair values of its reporting units are less than their carrying amounts.

(16)Derivative Financial Instruments

Hedging Strategy

Foreign Exchange Currency Contracts

The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations. The Company has entered into certain forward contracts to hedge the risk of foreign currency rate fluctuations. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these hedges.

The Company’s primary objective is to hedge the variability in forecasted cash flows due to the foreign currency risk. Various transactions that occur primarily in Europe, Canada, South Korea, China, Hong Kong and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies. These

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types of transactions include U.S. dollar-denominated purchases of merchandise and U.S. dollar- and British pound-denominated intercompany liabilities. In addition, certain operating expenses, tax liabilities and pension-related liabilities are denominated in Swiss francs and are exposed to earnings risk as a result of exchange rate fluctuations when converted to the functional currency. Further, there are certain real estate leases that are denominated in a currency other than the functional currency of the respective entity that entered into the agreement (primarily Swiss francs, Russian roubles and Polish zloty). As a result, the Company may be exposed to volatility related to unrealized gains or losses on the translation of present value of future lease payment obligations when translated at the exchange rate as of a reporting period-end. The Company enters into derivative financial instruments, including forward exchange currency contracts, to offset some, but not all, of the exchange risk on certain of these anticipated foreign currency transactions.

Periodically, the Company may also use foreign exchange currency contracts to hedge the translation and economic exposures related to its net investments in certain of its international subsidiaries.

Interest Rate Swap Agreements

The Company is exposed to interest rate risk on its floating-rate debt. The Company has entered into interest rate swap agreements for certain of these agreements to effectively convert its floating-rate debt to a fixed-rate basis. The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company has elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts. Refer to Note 9 for further information.

The impact of the credit risk of the counterparties to the derivative contracts is considered in determining the fair value of the foreign exchange currency contracts and interest rate swap agreements. As of ~~October~~July 29, ~~2022,~~2023, credit risk has not had a significant effect on the fair value of the Company’s foreign exchange currency contracts and interest rate swap agreements.

Hedge Accounting Policy

Foreign Exchange Currency Contracts

U.S. dollar forward contracts are used to hedge forecasted merchandise purchases over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as cash flow hedges, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are

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recognized in cost of product sales in the period that approximates the time the hedged merchandise inventory is sold.

The Company has also used U.S. dollar forward contracts to hedge the net investments of certain of the Company’s international subsidiaries over specific months. Changes in the fair value of these U.S. dollar forward contracts, designated as net investment hedges, are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are not recognized in earnings ~~(loss)~~ until the sale or liquidation of the hedged net investment.

The Company also has foreign exchange currency contracts that are not designated as hedging instruments for accounting purposes. Changes in fair value of foreign exchange currency contracts not designated as hedging instruments are reported in net earnings ~~(loss)~~ as part of other income (expense).

Interest Rate Swap Agreements

Interest rate swap agreements are used to hedge the variability of the cash flows in interest payments associated with the Company’s floating-rate debt. Changes in the fair value of interest rate swap agreements designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are amortized to interest expense over the term of the related debt.

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Periodically, the Company may also enter into interest rate swap agreements that are not designated as hedging instruments for accounting purposes. Changes in the fair value of interest rate swap agreements not designated as hedging instruments are reported in net earnings ~~(loss)~~ as part of other income (expense).

Summary of Derivative Instruments

The fair value of derivative instruments in the condensed consolidated balance sheets is (in thousands):


		Fair Value at Oct 29, 2022		Fair Value at Jan 29, 2022		Derivative Balance Sheet Location		Fair Value at Jul 29, 2023		Fair Value at Jan 28, 2023		Derivative Balance Sheet Location
ASSETS:	ASSETS:						ASSETS:
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:						Derivatives designated as hedging instruments:
Cash flow hedges:	Cash flow hedges:						Cash flow hedges:
Foreign exchange currency contracts	Foreign exchange currency contracts	$	13,207	$	5,999	Other current assets/ Other assets	Foreign exchange currency contracts	$	442	$	1,073	Other current assets/Other assets
Interest rate swap	Interest rate swap	1,317		—		Other assets	Interest rate swap	1,111		1,034		Other assets
Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments	14,524		5,999			Total derivatives designated as hedging instruments	1,553		2,107
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:						Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Foreign exchange currency contracts	2,168		1,134		Other current assets	Foreign exchange currency contracts	312		1,146		Other current assets
Total	Total	$	16,692	$	7,133		Total	$	1,865	$	3,253
LIABILITIES:	LIABILITIES:						LIABILITIES:
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:						Derivatives designated as hedging instruments:
Cash flow hedges:	Cash flow hedges:						Cash flow hedges:
Foreign exchange currency contracts	Foreign exchange currency contracts	$	1,155	$	—	Accrued expenses/ Other long-term liabilities	Foreign exchange currency contracts	$	6,863	$	12,930	Accrued expenses/ Other long-term liabilities
Interest rate swap		—		74		Other long-term liabilities

Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments	1,155		74			Total derivatives designated as hedging instruments	6,863		12,930
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:						Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Foreign exchange currency contracts	52		—		Accrued expenses and other current liabilities	Foreign exchange currency contracts	4,097		3,774		Accrued expenses

Total	Total	$	1,207	$	74		Total	$	10,960	$	16,704

Derivatives Designated as Hedging Instruments

Foreign Exchange Currency Contracts Designated as Cash Flow Hedges

During the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, the Company purchased U.S. dollar forward contracts in Europe totaling US$~~256.0~~52.0 million that were designated as cash flow hedges. As of ~~October~~July 29, ~~2022,~~2023, the Company

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had forward contracts outstanding for its European operations of US$~~275.0~~165.0 million to hedge forecasted merchandise purchases, which are expected to mature over the next 1815 months.

As of ~~October~~July 29, ~~2022,~~2023, accumulated other comprehensive income (loss) related to foreign exchange currency contracts included a ~~$15.7~~$6.7 million net unrealized ~~gain,~~loss, net of tax, of which ~~$13.9~~$6.1 million will be recognized in cost of product sales over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values.

At January ~~29, 2022,~~28, 2023, the Company had forward contracts outstanding for its European operations of US$~~146.0~~253.0 million that were designated as cash flow hedges.

Interest Rate Swap Agreement Designated as Cash Flow Hedge

As of ~~October~~July 29, ~~2022,~~2023, accumulated other comprehensive income (loss) related to the interest rate swap agreement included a net unrealized gain of ~~$1.0~~$0.9 million, net of tax, which will be recognized in interest expense over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values.

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The following summarizes the gains (losses) before income taxes recognized on derivative instruments designated as cash flow hedges in OCI and net earnings (in thousands):


		Gains Recognized in OCI				Location of Gains (Losses) Reclassified from Accumulated OCI into Earnings		Gains (Losses) Reclassified from Accumulated OCI into Earnings
							Gains (Losses) Recognized in OCI						Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings		Gains (Losses) Reclassified from Accumulated OCI into Earnings
		Oct 29, 2022		Oct 30, 2021				Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022			Jul 29, 2023		Jul 30, 2022
		Three Months Ended											Three Months Ended
Derivatives designated as cash flow hedges:	Derivatives designated as cash flow hedges:											Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	Foreign exchange currency contracts	$	6,234	$	2,797	Cost of product sales		$	4,141	$	(1,270)	Foreign exchange currency contracts	$	2,467	$	2,298	Cost of product sales	$	311	$	1,198

Interest rate swap	Interest rate swap	764		275		Interest expense		30		(72)		Interest rate swap	338		(216)		Interest expense	148		(35)

Nine Months Ended
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts $ 16,358 $ 6,089 Cost of product sales $ 7,013 $ (2,561)
Interest rate swap 1,325 397 Interest expense (66) (203)



	Six Months Ended
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	1,395	$	10,124	Cost of product sales	$	6,204	$	2,872


Interest rate swap	353		561		Interest expense	276		(96)

The following summarizes net after income tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021			Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Beginning balance gain (loss)	Beginning balance gain (loss)	$	14,240	$	(602)	$	7,280	$	(4,876)	Beginning balance gain (loss)	$	(7,869)	$	13,400	$	(1,584)	$	7,280

Net gains from changes in cash flow hedges	Net gains from changes in cash flow hedges	6,136		2,701		15,578		5,725		Net gains from changes in cash flow hedges	2,455		1,879		1,513		9,442
Net (gains) losses reclassified into earnings		(3,709)		1,185		(6,191)		2,435
Ending balance gain		$	16,667	$	3,284	$	16,667	$	3,284
Net gains reclassified into earnings										Net gains reclassified into earnings	(391)		(1,039)		(5,734)		(2,482)
Ending balance gain (loss)										Ending balance gain (loss)	$	(5,805)	$	14,240	$	(5,805)	$	14,240

Foreign Exchange Currency Contracts Not Designated as Hedging Instruments

As of ~~October~~July 29, ~~2022,~~2023, the Company had euro foreign exchange currency contracts to purchase US$~~49.5~~89.0 million expected to mature over the next 149 months. As of January ~~29, 2022,~~28, 2023, the Company had euro foreign exchange currency contracts to purchase US$~~19.0~~83.5 million.

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The following summarizes the gains (losses) before income taxes recognized on derivative instruments not designated as hedging instruments in other income (expense) (in thousands):

Location of Gains Recognized in Earnings Gains Recognized in Earnings
Three Months Ended Nine Months Ended
Oct 29, 2022 Oct 30, 2021 Oct 29, 2022 Oct 30, 2021
Foreign exchange currency contracts Other expense $ 1,153 $ 360 $ 4,294 $ 916


	Location of Gains (Losses) Recognized in Earnings	Gains (Losses) Recognized in Earnings
		Three Months Ended				Six Months Ended
		Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022

Foreign exchange currency contracts	Other expense	$	165	$	1,561	$	(460)	$	3,141

(17)Subsequent Events

Dividends

On ~~November 22, 2022,~~August 23, 2023, the Company announced a regular quarterly cash dividend of ~~$0.225~~$0.30 per share on the Company’s common stock. The cash dividend will be paid on ~~December 23, 2022~~September 22, 2023 to shareholders of record as of the close of business on ~~December 7, 2022.~~September 6, 2023. As a result of this dividend declaration, ~~and in accordance~~

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~~with the terms of the indenture governing the Notes,~~ the Company will adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the Notes in accordance with the terms of the 2024 Indenture and the 2028 Indenture, effective as of ~~December 6, 2022.~~September 5, 2023. A corresponding adjustment is expected to be made to the strike prices with respect to the convertible note hedges and the warrants entered into by the Company in connection with the offering of the corresponding Notes, each of which will be decreased in accordance with the terms of the applicable convertible note hedge confirmations and warrant ~~confirmations, respectively.~~

confirmations.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

Unless the context indicates otherwise, when we refer to “we,” “us,” “our” or the “Company” in this Form 10‑Q, we are referring to Guess?, Inc. (“GUESS?”) and its subsidiaries on a consolidated basis.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may also be contained in our other reports filed under the Securities Exchange Act of 1934, as amended, in our press releases and in other documents.

~~Except for~~All statements other than statements of historical or current fact are forward-looking statements. These statements include those relating to expectations, analyses and other information ~~contained herein, certain matters discussed in this Quarterly Report, including~~based on current plans, forecasts of future results and estimates of amounts not yet determinable. These statements ~~concerning the impacts of the COVID-19 pandemic,~~also relate to our goals, future prospects, potential actions, and the ongoing conflict in Ukraine and other events impacting the markets in which we operate; statements concerning our future outlook, including with respect to the ~~fourth~~third quarter and full year of fiscal ~~2023;~~2024; statements concerning our expectations, goals, future prospects, and current business strategies and strategic initiatives; and statements expressing optimism or pessimism about future operating results and growth ~~opportunities are~~opportunities. These forward-looking statements ~~that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which~~ are frequently indicated by terms such as “expect,” “could,” “will,” “should,” “goal,” “strategy,” “believe,” “estimate,” “continue,” “outlook,” “plan,” “create,” “see,” and similar terms, are only expectations, and involve known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from what is currently anticipated. Factors which may cause actual results in future periods to differ materially from current expectations include, among others: our ability to maintain our brand image and reputation; domestic and international economic or political conditions, including economic and other ~~factors~~events that could negatively impact consumer confidence and discretionary consumer spending; sanctions and export controls targeting Russia and other impacts related to the war in Ukraine; impacts related to the COVID-19 pandemic or other public health crises; risks relating to our indebtedness; changes to estimates related to impairments, inventory and other reserves; changes in the competitive marketplace and in our commercial relationships; our ability to anticipate and adapt to changing consumer preferences and trends; our ability to manage our inventory commensurate with customer demand; the high concentration of our Americas Wholesale business; risks related to the costs and timely delivery of merchandise to our distribution facilities, stores and wholesale customers; unexpected or unseasonable weather conditions; our ability to effectively operate our various retail concepts, including securing, renewing, modifying or terminating leases for store locations; our ability to successfully and/or timely implement our growth strategies and other strategic initiatives; our ability to successfully enhance our global omni-channel capabilities; our ability to expand internationally and operate in regions where we have less experience, including through joint ventures; risks relating to our ~~$300 million 2.0%~~ convertible senior notes, ~~due 2024 (the “Notes”),~~ including our ability to settle the ~~liability~~liabilities in cash; disruptions at our distribution facilities; our ability to attract and retain management and other key personnel; obligations or changes in estimates arising from new or existing litigation, income tax and other regulatory proceedings; risks related to the income tax treatment of our third quarter fiscal 2022 intra-entity transfer of intellectual property rights from certain U.S. entities to a wholly-owned Swiss subsidiary; catastrophic events or natural disasters; changes in U.S. or foreign income tax or tariff policy, including changes to tariffs on imports into the U.S.; accounting adjustments to our unaudited financial statements identified during the completion of our annual independent audit of financial statements and financial controls or from subsequent events arising after issuance of this Quarterly Report; risk of future non-cash asset impairments, including goodwill, right-of-use lease assets and/or other store asset impairments; violations of, or changes to, domestic or international laws and regulations; risks associated with the acts or omissions of our licensees and third party vendors, including a failure to comply with our vendor code of conduct or other policies; risks associated with cyber security incidents and other cyber security risks; risks associated with our ability to properly collect, use, manage and secure consumer and employee data; risks associated with our vendors’ ability to maintain the strength and security of information technology systems;

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changes in economic, political, social and other conditions affecting our foreign operations and sourcing, including the impact of currency fluctuations, global income tax rates and economic and market conditions in the various countries in which we operate; impacts of inflation and further inflationary pressures; fluctuations in quarterly performance; slowing in-person customer traffic; increases in labor costs; increases in wages; risks relating to activist investor activity; and the significant voting power of our family founders. In addition to these factors, the economic, technological, managerial, and other risks identified in “Part I, Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K, “Part II, Item 1A. Risk Factors” herein and other filings with the Securities and Exchange Commission, including but not limited to the risk factors discussed therein, could cause actual results to differ materially from current expectations. The current global economic climate, the ongoing conflict in Ukraine, possible instability in the ~~impact of the COVID-19 pandemic,~~banking system, and uncertainty surrounding potential changes in U.S. policies and regulations may amplify many of these risks. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Business Update, Market Trends and Uncertainties

Macroeconomic conditions, including ~~rising~~ inflation, higher interest rates, foreign exchange rate fluctuations, declines in consumer spending, ~~and~~ the impact of the ongoing conflict in Ukraine and the ~~COVID-19 pandemic~~lingering effects of public health crises continue to negatively impact our business. ~~Additionally, the Company has experienced negative impacts to its~~These conditions have also negatively impacted global supply chains, ~~as a result of the COVID-19 pandemic and other factors,~~ contributing to industry-wide ~~higher~~increases to product and freight ~~costs. The Company has~~costs relative to pre-pandemic levels. We have been working actively to mitigate these headwinds to the extent possible through a number of global supply chain initiatives. Furthermore, certain of the Company’s stores, primarily in Asia were impacted by government mandated capacity restrictions and other measures to prevent the spread of COVID-19, resulting in the closure of less than 1% of our directly operated stores as of October 29, 2022. The impact of these closures was minimal to our three and nine months ended October 29, 2022 results.

We continue to carefully monitor and respond to developments in market conditions, including by strategically managing expenses in order to protect ~~profitability and to mitigate, to the extent possible, the effect of supply chain disruptions.~~profitability. The duration and scope of these conditions cannot be predicted, and therefore, any anticipated negative financial impact to ~~the Company’s~~our operating results cannot be reasonably estimated.

Business Segments

Our businesses are grouped into five reportable segments for management and internal financial reporting purposes: Europe, Americas Retail, Americas Wholesale, ~~Europe,~~ Asia and Licensing. Our Europe, Americas Retail, Americas Wholesale ~~Europe~~ and Licensing reportable segments are the same as their respective operating segments. Certain components of our Asia operating segment are separate operating segments based on region, which have been aggregated into the Asia reportable segment for disclosure purposes.

~~Management evaluates~~We evaluate segment performance based primarily on revenues and earnings (loss) from operations before corporate performance-based compensation costs, asset impairment charges, net gains ~~(losses)~~ on lease modifications, restructuring charges and certain non-recurring credits (charges), if any. We believe this segment reporting reflects how our business segments are managed and how each segment’s performance is evaluated by our chief operating decision maker to assess performance and make resource allocation decisions. Information regarding these segments is summarized in “Part I, Item 1. Financial Statements – Note 8 – Segment Information.”

Products

We derive our net revenue from the sale of GUESS?, G by GUESS (GbG), GUESS Kids and MARCIANO apparel and our licensees’ products through our worldwide network of directly-operated and licensed retail stores, wholesale customers and distributors, as well as our online sites. We also derive royalty revenue from worldwide licensing activities.

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Foreign Currency Volatility

Since the majority of our international operations are conducted in currencies other than the U.S. dollar (primarily the euro, British pound, Canadian dollar, Chinese yuan, ~~euro,~~ Japanese yen, Korean won, Mexican peso, Polish zloty, Russian rouble and Turkish lira), currency fluctuations can have a significant impact on the translation of our international revenues and earnings (loss) into U.S. dollars.

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Some of our transactions, primarily those in Europe, Canada, South Korea, China, Hong Kong and Mexico, are denominated in U.S. dollars, Swiss francs, British pounds and Russian roubles, exposing them to exchange rate fluctuations when these transactions (such as inventory purchases or periodic lease payments) are converted to their functional currencies. As a result, fluctuations in exchange rates can impact the operating margins of our foreign operations and reported earnings (loss), and are largely dependent on the transaction timing and magnitude during the period that the currency fluctuates. When these foreign exchange rates weaken versus the U.S. dollar at the time the respective U.S. dollar denominated payment is made relative to the payments made in the comparable period, our product margins have been and could continue to be unfavorably impacted.

In addition, there are certain real estate leases denominated in a currency other than the functional currency of the respective entity that entered into the agreement (primarily Swiss francs, Russian roubles and Polish zloty). As a result, we may be exposed to volatility related to unrealized gains or losses on the translation of present value of future lease payment obligations when translated at the exchange rate as of a reporting period-end.

During the first ~~nine~~six months of fiscal ~~2023,~~2024, the average U.S. dollar rate was stronger against the ~~euro,~~ British pound, Turkish lira, ~~Polish Slotzy,~~ Canadian dollar, Russian rouble, Japanese yen, Korean won ~~Mexican peso,~~ and Chinese yuan and weaker against the ~~Russian rouble,~~euro, Polish zloty and Mexican peso compared to the average rate in the same prior-year period. This had an overall unfavorable impact on the translation of our international revenues and an overall unfavorable impact on earnings from operations for the ~~three and nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year ~~periods.~~period.

For the remainder of fiscal ~~2023,~~2024, if the U.S. dollar ~~remains relatively strong against~~strengthens relative to the respective fiscal ~~2022~~2023 foreign exchange rates, foreign exchange could negatively impact our revenues and operating results, as well as our international cash and other balance sheet items, particularly in Canada, Europe (primarily the euro, Turkish lira, British ~~Pound~~pound and Russian rouble) and Mexico. Alternatively, if the U.S. dollar weakens relative to the respective fiscal ~~2022~~2023 foreign exchange rates, our revenues and operating results, as well as our other cash balance sheet items, could be positively impacted by foreign currency fluctuations during the remainder of fiscal ~~2023,~~2024, particularly in these regions. At roughly prevailing exchange rates, we do expect currencies to continue to represent a ~~significant~~ headwind to ~~revenues,~~ operating profit and margin for the ~~remainder of the~~full fiscal ~~year.~~year 2024.

We enter into derivative financial instruments to offset some, but not all, of the exchange risk on foreign currency transactions. For additional discussion regarding our exposure to foreign currency risk, forward contracts designated as hedging instruments and forward contracts not designated as hedging instruments, refer to “Item 3. Quantitative and Qualitative Disclosures About Market Risk.”

Inflation Impacts

Our financial results have been and may continue to be impacted by inflationary pressures affecting our overall cost structure, including transportation, employee compensation, raw materials and other costs. We estimate certain of our costs are impacted by inflation and other factors as follows:

Transportation. Our inbound and outbound transportation costs vary by the method of shipping, including air, ocean and ground. Each of these methods may be impacted by various factors, including inflation and other considerations, such as an imbalance between the overall freight capacity on the marketplace and demand. ~~The~~Compared to pre-pandemic levels, the increase in our transportation costs was primarily attributable to higher inbound freight costs.

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Employee Compensation. We have been impacted by the ongoing shortage of available qualified candidates for employment, as well as increases in compensation to attract and retain employees. We continue to evaluate our compensation and benefit offerings to be competitive with the current market and evaluate strategies to be more effective and efficient at all levels within the organization, including how to best serve our customers.

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Raw Materials. The costs of raw materials for our products have increased, both as a result of inflation and our ongoing initiatives to improve the quality and sustainability of our products. In addition, because a significant portion of our products are manufactured in other countries, declines in the relative value of local currencies versus the U.S. dollar have exacerbated many of these pricing pressures.

We seek to minimize the impact of inflation by continuously optimizing our supply chain, including logistics, as well as efficiently managing our workforce. It is difficult to determine the portion of cost increases solely attributable to inflation versus other factors, such as the cost of improvements to our products and imbalances in the supply chain.

These increased costs have negatively impacted our margins and expenses. Continued inflationary and other pressures could further impact our gross margin and selling, general and administrative expenses as a percentage of net sales if the sales price of our products does not increase with higher costs. Furthermore, prolonged inflationary conditions could have an adverse impact on consumer discretionary spending, which could negatively impact our sales and results in the future. In addition, inflation could materially increase the interest rates on any future debt we may incur.

We expect inflationary pressures will persist in the near term. The extent to which such pressures may impact our business depends on many factors, including our customers’ ability and willingness to accept price increases, our ability to improve our margins and potential downward pricing pressures if our competitors do not also raise their prices. Please refer to “Part ~~II,~~I, Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K for further information on the potential impacts and risk associated with inflation.

Russia-Ukraine Conflict

We are currently operating in Russia through our wholesale and retail channels and we have immaterial wholesale operations through local wholesale partners in Belarus and Ukraine. Our operations in Russia are operated primarily through Guess? CIS, LLC (“Guess CIS”), a ~~majority-owned~~wholly-owned Russian ~~subsidiary in which~~subsidiary. As more fully described below, we ~~had~~held a 70% interest ~~as of October 29, 2022 and January 29, 2022.~~in Guess CIS until May 2023, at which time we acquired the remaining 30% interest in Guess CIS from the noncontrolling interest holder. Guess CIS currently operates 44 retail stores in Russia and acts as a distributor for our wholesale partners in Russia. We also operate in Russia through other local wholesale partners and by selling directly to retail customers through our European online store. Prior to February 2022, we also sold directly to retail customers in Ukraine and Belarus through our European online store.

Our operations in Russia, Belarus and Ukraine represented ~~less~~slightly more than 3% of our total revenue for the year ended January ~~29, 2022~~28, 2023 and 3%slightly more than 4% for the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, with our operations in Russia comprising over 90% of this total revenue. As of ~~October~~July 29, ~~2022,~~2023, our total assets in Russia, all of which are held by Guess CIS, represented less than 2% of our total assets, consisting primarily of leasehold right of use assets, store inventory, furnishings and fixtures, and receivables. We only maintain inventory in Russia in an amount sufficient for operating our Russian retail stores. We do not maintain inventory or hold any other significant assets in Belarus or Ukraine. We do not rely, directly or indirectly, on goods sourced in Russia, Belarus or Ukraine. Other than such labor and services necessary to conduct our direct operations in Russia in the ordinary course of business, we do not rely, directly or indirectly, on services sourced in Russia, Belarus or Ukraine.

There has been no material impact to our existing operations as a result of the ongoing conflict in Ukraine, although we are limited in our ability to expand our business in Russia due to the U.S. ban on new investments in Russia described below under “―Impact of Sanctions and Trade Restrictions.” With respect to our supply and distribution channels, we have experienced increased costs and transit times associated with deliveries related to our Russia operations, due in part to new procedures and sanctions screening implemented in

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response to the conflict in Ukraine and the imposition of related sanctions. These costs and delays have not materially impacted our business or results of operations. Additionally, retail deliveries for online orders to Ukraine and Belarus have been suspended since February 2022 due to increased logistics costs and other difficulties in delivering to these regions. While we intend to re-open online orders to Ukraine and Belarus

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when appropriate, the suspension of these shipments has not had, and is not anticipated to have, a material impact on our business or results of operations. Our wholesale partner in Ukraine partially suspended its operations at the outset of the conflict; however, sales were re-opened in July 2022, and our business and results of operations were not materially impacted.

In addition, pursuant to an agreement entered into in 2018, our European subsidiary, Guess Europe SAGL has also counter-guaranteed up to $900,000 of Guess CIS’s obligations under its local Russian guarantee line, as required by certain lease agreements.

In connection with our investment in Guess CIS, we ~~are~~were previously party to a put arrangement with respect to the securities that ~~represent~~represented the remaining noncontrolling interest for Guess CIS (the “Put Option”). The Put Option ~~provides~~provided the noncontrolling interest holder of Guess CIS, a non-sanctioned Russian citizen (the “Minority Holder”), the right to compel us, through a wholly-owned European subsidiary, to purchase the remaining 30% of the total outstanding equity interest of Guess CIS at its sole discretion by providing written notice to us during the period after December 28, 2020, the fifth anniversary of the agreement, through December 31, 2025. The redemption value of the Put Option iswas based on a multiple of Guess CIS’s earnings before interest, taxes, depreciation and amortization, subject to certain adjustments. The carrying value of the redeemable noncontrolling interest related to ~~the put arrangement~~Guess CIS was €8.0 million ($~~8.0~~8.7 million) as of ~~October 29, 2022.~~ January 28, 2023.

In November 2022, the Minority Holder exercised the Put Option, triggering a contractual obligation for us to purchase the Minority Holder’s 30% interest in Guess CIS. Following a comprehensive review of the various economic sanctions imposed by the United States and European governments with respect to Russia ~~earlier this year~~ and obtaining guidance from the U.S. Department of the Treasury’s Office of Foreign Assets Control, ~~(“OFAC”),~~ we ~~have~~ determined that our acquisition of the Minority Holder’s 30% interest in Guess CIS pursuant to our pre-sanctions contractual ~~obligations~~obligation to fulfill the Minority Holder’s exercise of the Put Option iswas not prohibited by current economic sanctions, including the U.S. ban on new investment in Russia. As such, following the exercise of the Put Option by the Minority Holder, we ~~expect~~entered into an agreement with the Minority Holder to ~~fulfill~~proceed with our ~~pre-sanctions contractual obligation to purchase~~acquisition of the Minority Holder’s 30% interest ~~as required~~in Guess CIS for a purchase price of €8.0 million, subject to the formal approval of the acquisition by the ~~terms~~relevant Russian government commission and certain other customary conditions. This formal approval was received, and the purchase was completed, in May 2023. As a result of ~~the~~this transaction, there was no redeemable noncontrolling interest related to Guess CIS ~~agreements entered into during fiscal 2016 with the Minority Holder. The purchase is currently expected to be completed by the end~~as of ~~the first quarter of fiscal 2024.~~

In addition, pursuant to an agreement entered into in 2018, our European subsidiary, Guess Europe SAGL has also counter guaranteed up to $900,000 of Guess CIS’s obligations under its local Russian guarantee line, as required by certain lease agreements.July 29, 2023.

Impact of Sanctions and Trade Restrictions

Our Russian operations are subject to various sanctions and export control measures targeting Russia, Belarus and the Russian-controlled regions of Ukraine (Crimea, Donetsk and Luhansk). These measures include: (i) blocking sanctions prohibiting dealings with various Russian senior government officials, and companies in various sectors important to the Russian economy, including major Russian financial institutions; (ii) expanded sectoral sanctions related to designated Russian entities’ ability to raise capital; (iii) the disconnection of certain Russian and Belarusian banks from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) financial messaging network; (iv) a ban on new investment in Russia; (v) a ban on the provision of certain services in Russia in the areas of accounting, trust formation, ~~and~~ management consulting, ~~services;~~quantum computing, architecture, engineering and in relation to the maritime transport of Russian-origin crude oil and petroleum products; (vi) bans on the import into the United States of certain Russian origin products, including various energy products; (vii) bans on the conduct of business or investment activity in the Russian-controlled Crimea, Donetsk and Luhansk regions of Ukraine; and (viii) restrictions on the export of various products to Russia and Belarus, including certain dual-use industrial and commercial products, and luxury goods. Additionally, certain logistics operators have imposed bans on direct air deliveries to Russia and restrictions on land deliveries to and from Russia, Belarus and Ukraine, none of which have had a material impact on our operations to date. We assessed the applicability of these sanctions and trade restrictions based on internal assessments of relevant regulations and concluded our existing operations in Russia and Belarus have not been materially affected by these sanctions and trade restrictions, although we are limited from further ~~expansion of our business in Russia. All of our~~

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expansion of our business in Russia. All of our deliveries (both wholesale and retail) undergo sanctions screening, including screening for maximum product value of $300 and €300 per item and prevention of shipments to sanctioned final recipients.

Our assessment of the impact of the various sanctions and export control measures targeting Russia, Belarus and the Russian-controlled regions of Ukraine is subject to the following uncertainties and assumptions:

•The duration and extent of the armed conflict in Ukraine;

•The impact of sanctions and trade restrictions targeting Russia and Belarus, and the possibility that such sanctions or trade restrictions may be expanded, or new sanctions or trade restrictions may be imposed;

•~~Significant exchange rate fluctuation related to the Russian rouble during the first months of the conflict and the~~The possibility of significant exchange rate volatility inrelated to the ~~future;~~Russian rouble;

•Potential disruptions of normal cash flow resulting from the removal of Russian and Belarusian banks from the SWIFT financial messaging network and regulations of the Russian and Belarusian governments;

•Disruptions of transport access to and from Russia, Belarus or Ukraine; and

•The suspension of our online retail shipments to Belarus and Ukraine.

We continue to assess all of our operations in Russia to ensure compliance with applicable sanctions, including most notably the U.S. ban on new investment in Russia.

~~See Part II, Item 1A. Risk Factors—Our business may also be affected by existing or future sanctions and export controls targeting Russia and other responses to Russia's invasion of Ukraine~~ ~~for additional information.~~

We are actively monitoring the situation in Ukraine. While the extent to which our future operations in Russia, Belarus and Ukraine will be impacted by the ongoing conflict is impossible to predict, the impact is not expected to be material to our results of operations, financial condition or cash flows.

Strategy

~~In March 2021, Carlos Alberini, our Chief Executive Officer, shared his updated~~Our strategic vision and implementation plan for execution ~~which included~~includes several key priorities to drive revenue and operating profit growth. These priorities are: (i) brand relevancy and brand elevation; (ii) product excellence; (iii) customer centricity; (iv) global footprint; ~~and~~ (v) functional capabilities; and (vi) growth; each as further described below:

Brand Relevancy and Brand Elevation. We continue to optimize our brand architecture to be relevant with our three target consumer groups: Heritage, Millennials and Generation Z. We have developed and launched one global line of product for all categories. We seek to elevate our Guess and Marciano brands and improve the quality and sustainability of our products, allowing us to realize more full-priced sales and rely less on promotional activity. We continue to use unique go-to-market strategies and execute celebrity and influencer partnerships and collaborations as we believe that they are critical to engage more effectively with a younger and broader audience.

Product Excellence. We believe product is a key factor of success in our business. We strive to design and make great products and will extend our product offering to provide our customers with products for the different occasions of their lifestyles. We will seek to better address local product needs.

Customer Centricity. We continue to place the customer at the center of everything we do. We plan to implement processes and platforms to provide our customers with a seamless omni-channel experience and expand our digital business.

Global Footprint. We continue to expand the reach of our brands by optimizing the productivity and profitability of our current footprint and expanding our distribution channels.

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Functional Capabilities. We continue to drive operational improvements to leverage and support our global business more effectively, primarily in the areas of logistics, sourcing, product development and production, inventory management and overall infrastructure.

Growth. We intend to leverage our infrastructure and capabilities, as well as the strength of our brands, to drive revenue growth. We will focus on increasing the productivity of our existing network, growing

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organically in existing and new markets, pursuing brand extensions and category expansions and considering opportunities that leverage our global infrastructure and network of licensees and wholesale partners.

Capital Allocation

We plan to continue to prioritize capital allocation toward investments that support growth and infrastructure, while remaining highly disciplined in the way we allocate capital across projects, including new store development, store remodels, technology and logistics investments and others. When we prioritize investments, we will focus on their strategic significance and their return on invested capital expectations. We also plan to manage product buys and inventory ownership rigorously and optimize overall working capital management consistently. In addition, we plan to continue to return value to shareholders through dividends and share repurchases, as ~~appropriate.~~appropriate, and we will consider opportunities that leverage our global infrastructure and network of licensees and wholesale partners.

In April 2023, we issued $275 million aggregate principal amount of 3.75% convertible senior notes due April 2028 (the “2028 Notes”) and retired approximately $184.9 million aggregate principal amount of the existing 2.00% convertible senior notes due April 2024 (the “2024 Notes”, and together with the 2028 Notes, the “Notes”) in a private offering. During the first quarter of fiscal 2022, the Board of Directors terminated our previous 2012 $500 million share repurchase program (which had $47.8 million capacity remaining) and authorized a new $200 million share repurchase program. On March 14, 2022, the Board of Directors expanded the repurchase authorization by $100 million, leaving an available capacity of $249 million at that time. On March 18, 2022,2024, in connection with ~~this expanded authorization, we entered into an accelerated share repurchase agreement (the "2022 ASR Contract) with a financial institution (in such capacity,~~ the ~~"2022 ASR Counterparty") to repurchase an aggregate $175 million of our common stock. Under the 2022 ASR Contract, we made a payment of $175 million~~exchange and subscription offering related to the ~~2022 ASR Counterparty~~2024 Notes and ~~received an initial delivery of~~the 2028 Notes, we repurchased approximately ~~3.3~~2.2 million shares of our common stock ~~on March 21, 2022. We received a final settlement of an additional 5.2~~for $42.8 million, shares under the 2022 ASR Contract on June 24, 2022. Refer to “Part I, Item 1. Financial Statements – Note 4 – Stockholders' Equity” for further information on the 2022 ASR Contract. During the nine months ended October 29, 2022, we also repurchased approximately 0.5 million shares of our common stock in openincluding excise tax, through broker-assisted market transactions, ~~totaling $11.7 million, all of which occurred during the six months ended July 30, 2022.~~pursuant to our existing share repurchase program.

Comparable Store Sales

We report National Retail Federation calendar comparable store sales on a quarterly basis for our retail businesses which include the combined results from our brick-and-mortar retail stores and our e-commerce sites. We also separately report the impact of e-commerce sales on our comparable store sales metric. As a result of our omni-channel strategy, our e-commerce business has become strongly intertwined with our brick-and-mortar retail store business. Therefore, we believe that the inclusion of e-commerce sales in our comparable store sales metric provides a more meaningful representation of our retail results.

Sales from our brick-and-mortar retail stores include purchases that are initiated, paid for and fulfilled at our retail stores and directly-operated concessions as well as merchandise that is reserved online but paid for and picked up at our retail stores. Sales from our e-commerce sites include purchases that are initiated and paid for online and shipped from either our distribution centers or our retail stores as well as purchases that are initiated in a retail store, but due to inventory availability at the retail store, are ordered and paid for online and shipped from our distribution centers or picked up from a different retail store.

Store sales are considered comparable after the store has been open for 13 full fiscal months. If a store remodel results in a square footage change of more than 15%, or involves a relocation or a change in store concept, the store sales are removed from the comparable store base until the store has been opened at its new size, in its new location or under its new concept for 13 full fiscal months. Stores that are permanently closed or temporarily closed (including as a result of pandemic-related closures) for more than seven days in any fiscal month are excluded from the calculation in the fiscal month that they are closed. E-commerce sales are considered comparable after the online site has been operational in a country for 13 full fiscal months and exclude any related revenue from shipping fees. These criteria are consistent with the metric used by management for internal reporting and analysis to measure performance of the store or online sites. Definitions and calculations of comparable store sales used by us may differ from similarly titled measures reported by other companies.

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Other

We operate on a 52/53-week fiscal year calendar which ends on the Saturday nearest to January 31 of each year. The ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 had the same number of days as the ~~nine~~six months ended ~~October~~July 30, ~~2021.~~2022. All references herein to “fiscal 2023” and “fiscal 2022” represent the results of the 52-week fiscal years ended January 28, 2023 and January 29, 2022, respectively. All references herein to “fiscal 2024” represent the 53-week fiscal year ending February 3, 2024, with the extra week occurring in the fourth quarter of the year.

Executive Summary

Overview

Net earnings attributable to Guess?, Inc. ~~decreased 26.9%~~increased 62.9% to ~~$21.8~~$39.0 million, or diluted net earnings per share (“EPS”) of ~~$0.34~~$0.59 per common share, for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~$29.9~~$24.0 million, or diluted EPS of ~~$0.45~~$0.35 per common share, for the quarter ended ~~October~~July 30, ~~2021.~~2022.

During the quarter ended ~~October~~July 29, ~~2022,~~2023, we recognized ~~$1.8~~$2.6 million in asset impairment charges; ~~$0.1~~$2.4 million in net gains on lease modifications; ~~$1.5~~$0.2 million for certain professional service and legal fees and related (credits) costs; $0.2 million of amortization of debt discount related to our Notes; and $0.2 million for certain discrete income tax adjustments (or a combined ~~$2.9~~$0.7 million, or $0.13 per share, negative impact after considering the related income tax benefit of $0.1 million). Excluding the impact of these items, adjusted net earnings attributable to Guess?, Inc. was $39.7 million and adjusted diluted EPS was $0.72 per common share for the quarter ended July 29, 2023.

During the quarter ended July 30, 2022, we recognized $1.9 million in asset impairment charges; $0.9 million in net gains on lease modifications; $1.3 million for certain professional services and legal fees and related (credits) costs; and $2.8 million for certain discrete income tax adjustments (or a combined $1.1 million positive impact after considering the related income tax benefit of ~~$0.4~~$0.6 million); and we excluded the dilutive share impact of the Notes in our adjusted ~~diluted~~ EPS (or a combined ~~$0.1~~$0.04 negative per share impact). Excluding the impact of these items, adjusted net earnings attributable to Guess?, Inc. was ~~$24.7~~$22.9 million and adjusted diluted EPS was ~~$0.44~~$0.39 per common share for the quarter ended ~~October 29,~~July 30, 2022.

During the quarter ended October 30, 2021, we recognized $1.2 million in asset impairment charges; $3.0 million in net losses on lease modifications; $0.6 million for certain professional services and legal fees and related (credits) costs; $2.8 million of amortization of debt discount related to our Notes; and $5.9 million in additional income tax expense from certain discrete income tax adjustments related primarily to an intra-entity transfer of intellectual property rights to a wholly-owned Swiss subsidiary (or a combined $11.7 million, or $0.17 per share, negative impact after considering the related income tax benefit of these adjustments of $1.7 million). Excluding the impact of these items, adjusted net earnings attributable to Guess?, Inc. was $41.6 million and adjusted diluted EPS was $0.62 per common share for the quarter ended October 30, 2021. References to financial results excluding the impact of these items are non-GAAP measures and are addressed below under “Non-GAAP Measures.”

Highlights of our performance for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year quarter are presented below, followed by a more comprehensive discussion under “Results of Operations”: (References to constant currency results are non-GAAP measures and are addressed under “Non-GAAP Measures.”)

Operations

•Total net revenue ~~decreased 1.5%~~increased 3.4% to ~~$633.4~~$664.5 million for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~$643.1~~$642.7 million in the same prior-year quarter. In constant currency, net revenue increased by ~~10.4%~~2.8%.

•Gross margin (gross profit as a percentage of total net revenue) ~~decreased 320~~increased 220 basis points to ~~42.5%~~44.3% for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~45.7%~~42.1% in the same prior-year quarter.

•Selling, general and administrative (“SG&A”) expenses as a percentage of total net revenue (“SG&A rate”) ~~decreased 120~~increased 100 basis points to ~~33.6%~~34.6% for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~34.8%~~33.6% in the same prior-year quarter. SG&A expenses ~~decreased 4.8%~~increased 6.3% to ~~$212.9~~$229.7 million for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~$223.8~~$216.0 million in the same prior-year quarter.

•During the quarter ended ~~October~~July 29, ~~2022,~~2023, we recognized ~~$1.8~~$2.6 million of asset impairment charges, compared to ~~$1.2~~$1.9 million in the same prior-year quarter.

•During the quarter ended ~~October~~July 29, ~~2022,~~2023, we recorded ~~$0.1~~$2.4 million net gains on lease modifications, compared to ~~$3.0~~$0.9 million ~~net losses~~ in the same prior-year quarter.

•Operating margin ~~decreased 160~~increased 140 basis points to ~~8.6%~~9.7% for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~10.2%~~8.3% in the same prior-year quarter. The ~~decrease~~increase in operating margin was ~~mainly~~ driven primarily by ~~180 basis points from currency headwinds, 160 basis points from~~ higher ~~expenses and 130 basis points from higher markdowns, partially offset by 240 basis points from leveraging of expenses. Earnings from operations~~

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~~decreased 16.6%~~initial markups and the favorable impact of business mix, partially offset by the unfavorable impact of currency and higher expenses. Earnings from operations increased 20.9% to ~~$54.8~~$64.6 million for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~$65.7~~$53.4 million in the same prior-year quarter.

•Other expense, net, totaled ~~$15.2~~$4.6 million for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~$7.8~~$9.1 million in the same prior-year quarter.

•The effective income tax rate decreased by ~~7.1%~~7.6% to ~~31.6%~~26.5% for the quarter ended ~~October~~July 29, ~~2022,~~2023, compared to ~~38.7%~~34.1% in the same prior-year quarter.

Key Balance Sheet Accounts

•We had ~~$174.1~~$302.6 million in cash and cash equivalents ~~and no restricted cash~~ as of ~~October~~July 29, ~~2022~~2023 compared to ~~$391.1~~$174.4 million ~~in cash and cash equivalents and $0.2 million in restricted cash~~ at ~~October~~July 30, ~~2021.~~2022.

◦As of ~~October~~July 29, ~~2022,~~2023, we had ~~$29.0~~$18.5 million in outstanding borrowings under our term loans and ~~$123.2~~$127.3 million in outstanding borrowings under our credit facilities compared to ~~$52.3~~$36.4 million in outstanding borrowings under our term loans and ~~$7.1~~$58.3 million in outstanding borrowings under our credit facilities as of ~~October~~July 30, ~~2021.~~2022.

◦In April 2023, we issued $275 million aggregate principal amount of the 2028 Notes and retired approximately $184.9 million aggregate principal amount of the 2024 Notes in separate, privately-negotiated transactions, for which we received total cash proceeds of $80.3 million. In connection with these transactions, we (i) entered into convertible note hedge transactions for which we paid an aggregate $51.8 million, (ii) sold warrants for which we received aggregate proceeds of $20.2 million and (iii) terminated a portion of the convertible note hedge transactions and warrant transactions entered into in connection with the issuance of the 2024 Notes, for which we received net proceeds of $6.2 million. These transactions are intended to reduce the potential dilution with respect to our common stock upon conversion of the notes and/or offset any cash payments we may be required to make in excess of the principal amount of the converted notes.

◦During the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, in connection with the exchange and subscription offering related to the 2024 Notes and the 2028 Notes in April 2023, we ~~made~~repurchased 2.2 million shares of our common stock for $42.8 million, including excise tax, through broker-assisted market transactions.

•Inventory increased by $18.9 million, or 3.5%, to $554.4 million as of July 29, 2023, from $535.5 million at July 30, 2022. On a ~~payment~~constant currency basis, inventory increased by $1.3 million, or 0.2%, when compared to July 30, 2022. The increase was mainly driven by the residual effect of ~~$175.0 million for share repurchases under~~last year’s initiative to mitigate supply chain disruptions by ordering products earlier as well as the ~~2022 ASR Contract. During~~impact of higher average unit costs due to the ~~nine months ended October 30, 2021, there were no share repurchases.~~elevation of the quality of our products, our investments in sustainability and inflationary pressures.

•Accounts receivable consists of trade receivables relating primarily to our wholesale business in Europe and, to a lesser extent, to our wholesale businesses in the Americas and Asia, royalty receivables relating to our licensing operations, credit card and retail concession receivables related to our retail businesses and certain other receivables. Accounts receivable ~~decreased~~increased by ~~$2.0~~$16.7 million, or ~~0.6%~~5.5%, to ~~$319.3~~$318.4 million as of ~~October~~July 29, ~~2022~~2023 compared to ~~$321.3~~$301.7 million at ~~October~~July 30, ~~2021.~~2022. On a constant currency basis, accounts receivable increased by ~~$46.2~~$2.1 million, or ~~14.4%~~0.7%, when compared to ~~October~~July 30, ~~2021.~~

•Inventory increased by $92.1 million, or 19.1%, to $574.6 million as of October 29, 2022, from $482.5 million at October 30, 2021. On a constant currency basis, inventory increased by $160.8 million, or 33.3%, when compared to October 30, 2021. The increase was mainly driven by our initiative to mitigate supply chain disruptions by ordering products earlier as well as the impact of higher average unit costs due to the elevation of the quality of our products, our investments in sustainability and inflationary pressures.2022.

Global Store Count

During the ~~quarter~~three months ended ~~October~~July 29, ~~2022,~~2023, together with our partners, we opened 23nine new stores worldwide, consisting of 11four stores in Europe and the Middle East, ~~eight~~four stores in Asia and the Pacific and ~~four stores~~one store in the Americas. Together with our partners, we closed 2428 stores worldwide, consisting of ~~seven~~17 stores in Europe and the Middle East, 12six stores in Asia and the Pacific and five stores in the Americas.

~~We ended the third quarter of fiscal 2023 with stores and concessions worldwide comprised as follows:~~

Stores Concessions
Region Total Directly-Operated Partner Operated Total Directly-Operated Partner Operated
United States 242 242 — — — —
Canada 72 72 — — — —
Central and South America 103 69 34 29 29 —
Total Americas 417 383 34 29 29 —
Europe and the Middle East 799 561 238 54 54 —
Asia and the Pacific 414 120 294 251 127 124
Total 1,630 1,064 566 334 210 124

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We ended the quarter ended July 29, 2023 with stores and concessions worldwide comprised as follows:


	Stores			Concessions
Region	Total	Directly-Operated	Partner Operated	Total	Directly-Operated	Partner Operated
United States	234	234	—	—	—	—
Canada	61	61	—	—	—	—
Central and South America	103	69	34	29	29	—
Total Americas	398	364	34	29	29	—
Europe and the Middle East	769	546	223	58	58	—
Asia and the Pacific	402	113	289	241	132	109
Total	1,569	1,023	546	328	219	109

Of the total stores, ~~1,344~~1,297 were GUESS? stores, ~~188~~179 were GUESS? Accessories stores, 5960 were G by GUESS (GbG) stores and 3933 were MARCIANO stores.

Results of Operations

Three Months Ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021~~2022

Consolidated Results

The following presents our condensed consolidated statements of income (in thousands, except per share data):


		Three Months Ended															Three Months Ended
		Oct 29, 2022					Oct 30, 2021					$ change		% change			Jul 29, 2023					Jul 30, 2022					$ change		% change
Net revenue	Net revenue	$	633,403		100.0	%	$	643,070		100.0	%	$	(9,667)	(1.5	%)	Net revenue	$	664,512		100.0	%	$	642,690		100.0	%	$	21,822	3.4	%
Cost of product sales	Cost of product sales	364,032			57.5	%	349,466			54.3	%	14,566		4.2	%	Cost of product sales	370,069			55.7	%	372,189			57.9	%	(2,120)		(0.6	%)
Gross profit	Gross profit	269,371			42.5	%	293,604			45.7	%	(24,233)		(8.3	%)	Gross profit	294,443			44.3	%	270,501			42.1	%	23,942		8.9	%

Selling, general and administrative expenses	Selling, general and administrative expenses	212,927			33.6	%	223,775			34.8	%	(10,848)		(4.8	%)	Selling, general and administrative expenses	229,652			34.6	%	216,043			33.6	%	13,609		6.3	%
Asset impairment charges	Asset impairment charges	1,789			0.3	%	1,152			0.2	%	637		55.3	%	Asset impairment charges	2,622			0.4	%	1,919			0.3	%	703		36.6	%
Net (gains) losses on lease modifications		(146)			(0.0	%)	3,006			0.5	%	(3,152)		(104.9	%)
Net gains on lease modifications																Net gains on lease modifications	(2,431)			(0.4	%)	(907)			(0.1	%)	(1,524)		168.0	%
Earnings from operations	Earnings from operations	54,801			8.6	%	65,671			10.2	%	(10,870)		(16.6	%)	Earnings from operations	64,600			9.7	%	53,446			8.3	%	11,154		20.9	%
Interest expense, net	Interest expense, net	(2,817)			(0.4	%)	(5,063)			(0.8	%)	2,246		(44.4	%)	Interest expense, net	(2,881)			(0.4	%)	(2,776)			(0.4	%)	(105)		3.8	%

Other expense, net	Other expense, net	(15,211)			(2.4	%)	(7,800)			(1.2	%)	(7,411)		95.0	%	Other expense, net	(4,592)			(0.7	%)	(9,053)			(1.4	%)	4,461		(49.3	%)
Earnings before income tax expense	Earnings before income tax expense	36,773			5.8	%	52,808			8.2	%	(16,035)		(30.4	%)	Earnings before income tax expense	57,127			8.6	%	41,617			6.5	%	15,510		37.3	%
Income tax expense	Income tax expense	11,616			1.8	%	20,441			3.2	%	(8,825)		(43.2	%)	Income tax expense	15,165			2.3	%	14,177			2.2	%	988		7.0	%
Net earnings	Net earnings	25,157			4.0	%	32,367			5.0	%	(7,210)		(22.3	%)	Net earnings	41,962			6.3	%	27,440			4.3	%	14,522		52.9	%
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	3,322			0.6	%	2,487			0.4	%	835		33.6	%	Net earnings attributable to noncontrolling interests	2,929			0.4	%	3,478			0.6	%	(549)		(15.8	%)
Net earnings attributable to Guess?, Inc.	Net earnings attributable to Guess?, Inc.	$	21,835		3.4	%	$	29,880		4.6	%	$	(8,045)	(26.9	%)	Net earnings attributable to Guess?, Inc.	$	39,033		5.9	%	$	23,962		3.7	%	$	15,071	62.9	%

Net earnings per common share attributable to common stockholders:	Net earnings per common share attributable to common stockholders:															Net earnings per common share attributable to common stockholders:
Basic	Basic	$	0.40				$	0.46				$	(0.06)			Basic	$	0.73				$	0.42				$	0.31
Diluted	Diluted	$	0.34				$	0.45				$	(0.11)			Diluted	$	0.59				$	0.35				$	0.24

Effective income tax rate	Effective income tax rate	31.6		%			38.7		%							Effective income tax rate	26.5		%			34.1		%

Net Revenue. Net revenue ~~decreased~~increased by ~~$10~~$22 million, or 2%3%, for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year quarter. Currency translation fluctuations relating to our non-U.S. operations ~~unfavorably~~ favorably

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impacted net revenue by ~~$76~~$4 million compared to the same prior-year quarter. In constant currency, net revenue increased by ~~10%~~3%. ~~Roughly 45% of the~~The increase in constant currency ~~net revenue~~ was mainly driven by ~~higher wholesale shipments, slightly over 30% was due to~~roughly 1% from each of positive store comparable sales ~~and roughly 20% was due to~~as well as net new ~~store openings.~~concession revenues.

Gross Margin. Gross margin ~~decreased~~increased by ~~3.2%~~2.2% for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year ~~quarte~~r,quarter, driven by ~~a 240~~190 basis ~~point decrease in product margin and an~~points from higher initial markups, 80 basis ~~point increase in occupancy rate. The lower product margin was~~points due to ~~the~~favorable revenue mix and 40 basis points from lower markdowns, partially offset by 90 basis points from unfavorable ~~130~~currency impact and 50 basis ~~point impacts from each of currency headwinds and higher markdowns. The higher occupancy rate was~~points due to ~~a 50 basis point unfavorable impact from~~ higher ~~store occupancy costs and a 20 basis point unfavorable impact from lower rent relief.~~expenses.

Gross Profit. Gross profit ~~decreased~~increased $24 million for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year quarter. The ~~decrease~~increase in gross profit was driven by ~~$35 million of unfavorable~~ ~~impact from currency translation, $9~~$14 million due to higher ~~markdowns, $8~~revenues, $13 million ~~from unfavorable currency transactional~~

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~~impacts~~higher initial markups and $4$3 million ~~from higher store occupancy expense,~~of lower markdowns, partially offset by ~~$33~~$4 million of unfavorable currency impact, including $3 million of favorable currency translation impact, ~~due to~~and $3 million of higher ~~revenues in constant currency.~~expenses.

Distribution costs, ~~include~~including labor, inbound freight charges, purchasing costs and related ~~overhead. Distribution costs~~overhead, related to supplying inventory to store locations within our retail business are included in cost of product sales. We also include net royalties received on our inventory purchases of licensed product as a reduction to cost of product sales. We generally exclude wholesale-related distribution costs from gross margin, including them instead in SG&A expenses. Additionally, we include retail store occupancy costs in cost of product sales. As a result, our gross margin may not be comparable to that of other entities. To ensure expenses are separated appropriately, we track activities at each distribution center location and record the costs associated with our shipments of goods either as cost of sales or as selling, general and administrative expenses, accordingly.

SG&A Rate. Our SG&A rate ~~decreased 1.2%~~increased 1.0% for the quarter ended ~~October~~July 29, ~~2022~~2023 from the same prior-year quarter. The ~~favorable~~unfavorable change in SG&A rate was mainly driven by ~~210~~150 basis points of ~~expense leverage due to~~ higher ~~revenues in constant currency~~expenses and ~~190~~30 basis points of ~~lower performance-based compensation,~~unfavorable currency impact, partially offset by ~~the impact of higher SG&A expenses described below.~~30 basis points due to leverage.

SG&A Expenses. SG&A expenses ~~decreased $11~~increased $14 million for the quarter ended ~~October~~July 29, ~~2022~~2023 from the same prior-year quarter. The ~~decrease~~increase in SG&A expenses was mainly driven by the favorable impact from currency translation and $13 million of lower performance-based compensation, partially offset by $8 million of higher variable expenses driven by higher revenues in constant currency and $14$10 million of higher expenses ~~including~~primarily from store ~~selling expenses.~~ labor costs, investment in infrastructure and inflationary pressures. Currency translation fluctuations relating to our foreign operations ~~favorably~~unfavorably impacted SG&A expenses by ~~$23~~$3 million.

Asset Impairment Charges. During the ~~quarter~~quarters ended ~~October~~July 29, 2023 and July 30, 2022, we recognized ~~$1.8~~$2.6 million and $1.9 million, respectively, of property and equipment and operating lease ~~right-of-use (“ROU”) assets~~ROU asset impairment charges related to certain retail locations resulting from under-performance and expected store closures. During the quarter ended October 30, 2021, we recognized $1.2 million for the impairment of certain operating lease ROU assets and property and equipment related to certain retail locations resulting from lower revenue and future cash flow projections from the ongoing effects of the COVID-19 pandemic and expected store closures.

Net ~~(Gains) Losses~~Gains on Lease Modifications. During the quarters ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, we recorded net gains on lease modifications of ~~$0.1~~$2.4 million and ~~net losses of $3.0~~$0.9 million, ~~on lease modifications,~~ respectively, related primarily to the early termination of lease agreements for certain retail locations.

Operating Margin. Operating margin ~~decreased 1.6%~~increased 1.4% for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year quarter. The ~~decrease~~increase in operating margin was ~~mainly~~ driven primarily by ~~180 basis points from currency headwinds, 160~~190 basis points from higher ~~expenses~~initial markups, 110 basis points from the favorable impact of business mix and 40 basis points from lower markdowns, partially offset by 130 basis points from ~~higher markdowns, partially offset by 240~~the unfavorable impact of currency and 110 basis points ~~from leveraging of expenses.~~due to higher expenses. Excluding the impact of asset impairment charges, certain professional service and legal fees and related (credits) costs and net gains ~~(losses)~~ on lease modifications, our operating margin would have ~~decreased 1.8%~~increased 1.1% compared to the same prior-year quarter.

Earnings from Operations. ~~Earnings~~As a result of the foregoing, earnings from operations ~~decreased~~increased by $11 million for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year quarter. Currency ~~translation~~ fluctuations relating to our foreign operations unfavorably impacted earnings from operations by ~~$12 million.~~$8 million, including $1 million of unfavorable translational impact.

Other Expense, Net. Other expense, net for the quarter ended ~~October~~July 29, ~~2022~~2023 was ~~$15~~$5 million compared to $8$9 million in the same prior-year quarter. The change was primarily due to lower net unrealized ~~losses on our Supplemental Executive Retirement Plan (“SERP”) related assets compared to net unrealized gains in the same prior-year quarter~~ and ~~to a lesser extent, higher unrealized~~realized losses from foreign currency ~~exposures compared to the same prior-year quarter.~~exposures.

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Income Tax Expense. Income tax expense for the quarter ended ~~October~~July 29, ~~2022~~2023 was ~~$12~~$15 million, or a ~~31.6%~~26.5% effective income tax rate, compared to ~~$20~~$14 million, or a ~~38.7%~~34.1% effective income tax rate in the same prior-year quarter. ~~Generally, income~~Income tax expense for the interim periods is computed using the income tax rate estimated to be applicable for the full fiscal year, adjusted for discrete items, which is subject to ongoing

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review and evaluation by management. The change in the effective income tax rate was primarily due to ~~a decrease in earnings,~~the discrete items, which included losses in certain tax jurisdictions for which we did not recognize an income tax benefit in fiscal ~~2023~~2024 compared to the same prior-year period.

On October 8, 2021, the Organization for Economic Co-operation and Development (OECD) announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting which agreed to a two-pillar solution to address tax challenges arising from digitalization of the economy. On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. The OECD continues to release additional guidance on the two-pillar framework with widespread implementation anticipated by 2024. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by individual countries.

Net Earnings Attributable to Guess?, Inc. Net earnings attributable to Guess?, Inc. ~~decreased $8~~increased $15 million for the quarter ended ~~October~~July 29, ~~2022~~2023, compared to the same prior-year quarter. Diluted EPS ~~decreased $0.11~~increased $0.24 for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year quarter. We estimate a ~~net~~ positive impact ~~of $0.07~~ from ~~our adoption of the accounting guidance related to our Notes and~~ share buybacks of $0.04 and a negative impact from currency of ~~$0.22~~$0.05 on diluted EPS in the quarter ended ~~October~~July 29, ~~2022~~2023 when compared to the same prior-year quarter.

Refer to “Non-GAAP Measures” for an overview of our non-GAAP, or adjusted, financial results for the quarters ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021.~~2022. Excluding the impact of these non-GAAP items, adjusted net earnings attributable to Guess?, Inc. ~~decreased~~increased $17 million and adjusted diluted EPS ~~decreased $0.18~~increased $0.33 for the quarter ended ~~October~~July 29, ~~2022~~2023, compared to the same prior-year quarter. We estimate a ~~net~~ positive impact from our share buybacks of ~~$0.07~~$0.06 and a negative impact from currency of ~~$0.28~~$0.07 on adjusted diluted EPS in the quarter ended ~~October~~July 29, ~~2022~~2023 when compared to the same prior-year quarter.

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Information by Business Segment

The following presents our net revenue and earnings (loss) from operations by segment (in thousands):


		Three Months Ended											Three Months Ended
		Oct 29, 2022			Oct 30, 2021			$ change		% change			Jul 29, 2023			Jul 30, 2022			$ change		% change
Net revenue:	Net revenue:											Net revenue:
Europe												Europe	$	366,311		$	336,707		$	29,604	8.8	%
Americas Retail	Americas Retail	$	165,603		$	169,617		$	(4,014)	(2.4	%)	Americas Retail	167,568			181,655			(14,087)		(7.8	%)
Americas Wholesale	Americas Wholesale	53,181			58,999			(5,818)		(9.9	%)	Americas Wholesale	43,680			50,195			(6,515)		(13.0	%)
Europe		323,754			330,736			(6,982)		(2.1	%)
Asia	Asia	63,118			57,137			5,981		10.5	%	Asia	58,937			49,365			9,572		19.4	%
Licensing	Licensing	27,747			26,581			1,166		4.4	%	Licensing	28,016			24,768			3,248		13.1	%
Total net revenue	Total net revenue	$	633,403		$	643,070		(9,667)		(1.5	%)	Total net revenue	$	664,512		$	642,690		21,822		3.4	%
Earnings (loss) from operations:	Earnings (loss) from operations:											Earnings (loss) from operations:
Europe												Europe	$	47,196		$	34,538		12,658		36.6	%
Americas Retail	Americas Retail	$	11,365		$	24,070		(12,705)		(52.8	%)	Americas Retail	15,261			23,921			(8,660)		(36.2	%)
Americas Wholesale	Americas Wholesale	10,229			17,316			(7,087)		(40.9	%)	Americas Wholesale	11,065			11,442			(377)		(3.3	%)
Europe		36,222			44,509			(8,287)		(18.6	%)
Asia	Asia	(5)			(2,399)			2,394		(99.8	%)	Asia	(539)			(3,300)			2,761		(83.7	%)
Licensing	Licensing	24,849			24,402			447		1.8	%	Licensing	26,354			21,206			5,148		24.3	%
Total segment earnings from operations	Total segment earnings from operations	82,660			107,898			(25,238)		(23.4	%)	Total segment earnings from operations	99,337			87,807			11,530		13.1	%
Corporate overhead	Corporate overhead	(26,216)			(38,069)			11,853		(31.1	%)	Corporate overhead	(34,546)			(33,349)			(1,197)		3.6	%

Asset impairment charges	Asset impairment charges	(1,789)			(1,152)			(637)		55.3	%	Asset impairment charges	(2,622)			(1,919)			(703)		36.6	%
Net gains (losses) on lease modifications		146			(3,006)			3,152		(104.9	%)
Net gains on lease modifications												Net gains on lease modifications	2,431			907			1,524		168.0	%
Total earnings from operations	Total earnings from operations	$	54,801		$	65,671		$	(10,870)	(16.6	%)	Total earnings from operations	$	64,600		$	53,446		$	11,154	20.9	%

Operating margins:	Operating margins:											Operating margins:
Europe												Europe	12.9		%	10.3		%
Americas Retail	Americas Retail	6.9		%	14.2		%					Americas Retail	9.1		%	13.2		%
Americas Wholesale	Americas Wholesale	19.2		%	29.3		%					Americas Wholesale	25.3		%	22.8		%
Europe		11.2		%	13.5		%
Asia	Asia	(0.0		%)	(4.2		%)					Asia	(0.9		%)	(6.7		%)
Licensing	Licensing	89.6		%	91.8		%					Licensing	94.1		%	85.6		%
Total Company	Total Company	8.6		%	10.2		%					Total Company	9.7		%	8.3		%

~~Americas Retail~~Europe

Net revenue from our ~~Americas Retail~~Europe segment ~~decreased~~increased by $4$30 million, or 2%9%, for the quarter ended ~~October~~July 29, ~~2022~~2023 from the same prior-year quarter. Currency translation fluctuations ~~relating to our non-U.S. retail stores and e-commerce sites~~ had ~~an unfavorable~~a favorable impact on net revenue of ~~$1.7 million. In constant~~

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~~currency, net revenue decreased by 1% compared to the same prior-year quarter. The decrease in net revenue in constant currency was primarily driven by the unfavorable impact of permanent store closures.~~ Comparable sales (including e-commerce) decreased 1% in U.S. dollars and remained relatively flat in constant currency compared to the same prior-year quarter. The inclusion of our e-commerce sales had no impact on the comparable sales percentage in U.S. dollars and constant currency. As of October 29, 2022, we directly operated 383 stores in the Americas compared to 387 stores at October 30, 2021, excluding concessions, which represents a 1% decrease from the same prior-year quarter.

~~Operating margin decreased 7.3% for the quarter ended October 29, 2022 from the same prior-year quarter.~~ Approximately 250 basis points of the decrease was primarily driven by higher markdowns, 250 basis points was due to higher expenses, including higher store labor costs, 110 basis points was due to higher inventory obsolescence reserves, and 80 basis points was due to lower COVID-19 relief compared to the same prior-year quarter. This was partially offset by 200 basis points of favorable impact from higher initial markups.

~~Earnings from operations from our Americas Retail segment decreased by $13 million, or 53%, for the quarter ended October 29, 2022 from the same prior-year quarter~~. The decrease was primarily driven by $4 million of higher markdowns, $4 million of higher expenses, including higher store labor costs, $2 million of higher inventory obsolescence reserves, and $1 million of lower COVID-19 relief compared to the same prior-year quarter. This was partially offset by a $3 ~~million increase driven by higher initial markups.~~

~~Americas Wholesale~~

Net revenue from our Americas Wholesale segment decreased by $5.8 million, or 10%, for the quarter ended October 29, 2022 from the same prior-year quarter. Currency translation fluctuations relating to our non-U.S. wholesale businesses had an unfavorable impact on net revenue of $0.7 million. In constant currency, net revenue decreased by 9%~~. The decrease in net revenues in constant currency was driven by lower shipments in our U.S. wholesale business.~~

~~Operating margin decreased 10.1% for the quarter ended October 29, 2022 compared to the same prior-year quarter. The decrease in operating margin was mainly driven by a decrease of 600 basis points due to higher markdowns and a decrease of 400 basis points due to higher expenses.~~

~~Earnings from operations from our Americas Wholesale segment decreased by $7 million, or 41% for the quarter ended October 29, 2022 from the same prior-year quarter, mainly driven by $3 million of higher markdowns and $2 million for each of higher expenses and lower revenues.~~

~~Europe~~

Net revenue from our Europe segment decreased by $7 million, or 2%, for the quarter ended October 29, 2022 compared to the same prior-year quarter. Currency translation fluctuations had an unfavorable impact on net revenue of $64 million. In constant currency, net revenue increased by ~~17%~~8%. The increase in net revenue in constant currency was mainly driven by ~~$33~~$16 million due to positive comparable sales and $6 million due to higher wholesale ~~revenue, $19 million from positive comparable store sales and $8 million in net new store openings~~.revenue. Comparable sales (including e-commerce) ~~decreased 8%~~increased 11% in both U.S. dollars and ~~increased 9% in~~ constant currency compared to the same prior-year quarter. The inclusion of our e-commerce sales negatively impacted the comparable sales percentage by 4%a minimal amount in U.S. dollars and 6%2% in constant currency. Our retail sales in Turkey, a relatively small market, had an outsized impact on our comparable sales (including e-commerce) for the quarter ended ~~October~~July 29, ~~2022,~~2023, contributing a positive impact of 2%1% in U.S. dollars and 7%2% in constant currency, largely due to the current hyper-inflation environment in Turkey. As of ~~October~~July 29, ~~2022,~~2023, we directly operated ~~561~~546 stores in Europe compared to ~~540~~560 stores at ~~October~~July 30, ~~2021,~~2022, excluding concessions, which represents a ~~4% increase~~3% decrease from the same prior-year quarter.

Operating margin ~~decreased 2.3%~~increased 2.6% for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year quarter. The ~~decrease~~increase in operating margin was driven primarily by ~~330~~300 basis points of higher initial markups, 230 basis point favorable impact of higher revenues and 70 basis points due to lower markdowns, partially offset by 240 basis points of unfavorable currency ~~impact~~impacts and 130 basis points of higher expenses.

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~~220 basis points of higher expenses, partially offset by 380 basis points favorable impact of higher revenues in constant currency.~~

Earnings from operations from our Europe segment ~~decreased~~increased by $8$13 million, or ~~19%~~37%, for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year quarter. The ~~decrease~~increase in operating profit was mainly driven by ~~$20~~$11 million from each of higher initial markups and higher revenues and $2 million from lower markdowns, partially offset by $8 million of unfavorable currency impacts, including ~~$12~~$1 million of unfavorable translation impact, and $8$5 million of higher expenses.

Americas Retail

Net revenue from our Americas Retail segment decreased by $14 million, or 8%, for the quarter ended July 29, 2023 from the same prior-year quarter. Currency translation fluctuations relating to our non-U.S. retail stores and e-commerce sites had a favorable impact on net revenue of $1 million. In constant currency, net revenue decreased by 8% compared to the same prior-year quarter. The decrease in net revenue in constant currency was primarily driven by $11 million due to negative comparable sales and $4 million due to the impact of net store closures. Comparable sales (including e-commerce) decreased 6% in both U.S. dollars and constant currency compared to the same prior-year quarter. The inclusion of our e-commerce sales positively impacted the comparable sales percentage by 1% in both U.S. dollars and constant currency. As of July 29, 2023, we directly operated 364 stores in the Americas compared to 384 stores at July 30, 2022, excluding concessions, which represents a 5% decrease from the same prior-year quarter.

Operating margin decreased 4.1% for the quarter ended July 29, 2023 from the same prior-year quarter. Approximately 220 basis points of the decrease was driven by higher expenses, 170 basis points from the unfavorable impact of lower revenues and 110 basis points from higher markdowns, partially offset by 100 basis points from higher initial markups.

Earnings from operations from our Americas Retail segment decreased by $9 million, or 36%, for the quarter ended July 29, 2023 from the same prior-year quarter. The decrease was primarily driven by $5 million due to lower revenues, $4 million due to higher expenses and $2 million due to higher markdowns, partially offset by $2 million of higher initial markups.

Americas Wholesale

Net revenue from our Americas Wholesale segment decreased by $7 million, or 13%, for the quarter ended July 29, 2023 from the same prior-year quarter. Currency translation fluctuations relating to our non-U.S. wholesale businesses had a favorable impact on net revenue of $1 million. In constant currency, net revenue decreased by 16%. The decrease in net revenues in constant currency was mainly driven by lower shipments in our Mexico and U.S. wholesale businesses.

Operating margin increased 2.5% for the quarter ended July 29, 2023 compared to the same prior-year quarter. The increase in operating margin was mainly driven by 820 basis points of higher product margin mainly due to lower markdowns, partially offset by 540 basis points of higher expenses.

Earnings from operations from our Americas Wholesale segment decreased by 3% for the quarter ended July 29, 2023 from the same prior-year quarter, mainly driven by $2 million from each of lower revenues and higher expenses, partially offset by ~~the $23~~$4 million ~~favorable impact~~ of higher ~~revenues.~~product margin due to lower markdowns.

Asia

Net revenue from our Asia segment increased by $6$10 million, or ~~10%~~19%, for the quarter ended ~~October~~July 29, ~~2022~~2023 from the same prior-year quarter. Currency translation fluctuations had an unfavorable impact on net revenue of ~~$10~~$1 million. In constant currency, net revenue increased by ~~28%~~22%. The increase in net revenue in constant currency was mainly driven ~~by $7~~by increases of $6 million due to net new ~~store openings,~~concession revenues, including ~~stores~~concessions we recently acquired from our wholesale partners in Korea, ~~$4 million of higher e-commerce revenues~~ and $3$2 million due to ~~each of positive comparable store sales and~~ higher wholesale shipments. Comparable sales (including e-commerce) ~~decreased~~increased 2% in U.S. dollars and ~~increased 13%~~5% in constant currency compared to the same prior-year quarter. The inclusion of our e-commerce sales positively impacted the comparable sales percentage by 2% in U.S. dollars and constant currency.

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Operating margin increased ~~4.2%~~5.8% for the quarter ended ~~October~~July 29, ~~2022~~2023 from the same prior-year quarter, mainly driven primarily by ~~leveraging~~900 basis points from the favorable impact of higher revenues, partially offset by 260 basis points of higher expenses.

Loss from operations from our Asia segment ~~decreased by $2~~was $1 million ~~or 100%,~~ for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to a loss of $3 million in the same prior-year ~~quart~~quar~~er,~~ter, mainly driven by the impact of $5 million due to higher ~~revenues. Currency~~revenues partially offset by $2 million of higher expenses. Currency translation fluctuations relating to our Asia operations ~~unfavorably~~favorably impacted the loss from operations by ~~$0.4~~$0.1 million.

Licensing

Net royalty revenue from our Licensing segment increased by $1$3 million, or 4%13%, for the quarter ended ~~October~~July 29, ~~2022~~2023 from the same prior-year quarter, mainly driven by higher royalties in our ~~handbag category.~~fragrance category and, to a lesser extent, handbags, footwear and watches.

Earnings from operations from our Licensing segment increased by 2%24% for the quarter ended ~~October~~July 29, ~~2022~~2023 from the same prior-year quarter.

Corporate Overhead

Unallocated corporate overhead ~~decreased~~increased by ~~$12~~$1 million, or ~~31%~~4%, for the quarter ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year ~~quarter,~~quarter, primarily due to ~~lower performance-based compensation.~~mark to market losses on our deferred compensation plan as well as various infrastructure investments.

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~~Nine~~Six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021~~2022

Consolidated Results

The following presents our condensed consolidated statements of income (in thousands, except per share data):


		Nine Months Ended															Six Months Ended
		Oct 29, 2022					Oct 30, 2021					$ change		% change			Jul 29, 2023					Jul 30, 2022					$ change		% change

Net revenue	Net revenue	$	1,869,566		100.0	%	$	1,791,696		100.0	%	$	77,870	4.3	%	Net revenue	$	1,234,310		100.0	%	$	1,236,163		100.0	%	$	(1,853)	(0.1	%)
Cost of product sales	Cost of product sales	1,082,545			57.9	%	992,448			55.4	%	90,097		9.1	%	Cost of product sales	707,882			57.4	%	718,513			58.1	%	(10,631)		(1.5	%)
Gross profit	Gross profit	787,021			42.1	%	799,248			44.6	%	(12,227)		(1.5	%)	Gross profit	526,428			42.6	%	517,650			41.9	%	8,778		1.7	%

Selling, general and administrative expenses	Selling, general and administrative expenses	638,801			34.2	%	616,076			34.4	%	22,725		3.7	%	Selling, general and administrative expenses	460,625			37.3	%	425,874			34.4	%	34,751		8.2	%
Asset impairment charges	Asset impairment charges	5,252			0.3	%	3,094			0.2	%	2,158		69.7	%	Asset impairment charges	4,556			0.3	%	3,463			0.3	%	1,093		31.6	%
Net (gains) losses on lease modifications		(1,654)			(0.1	%)	441			0.0	%	(2,095)		(475.1	%)
Net gains on lease modifications																Net gains on lease modifications	(2,431)			(0.2	%)	(1,508)			(0.1	%)	(923)		61.2	%
Earnings from operations	Earnings from operations	144,622			7.7	%	179,637			10.0	%	(35,015)		(19.5	%)	Earnings from operations	63,678			5.2	%	89,821			7.3	%	(26,143)		(29.1	%)
Interest expense, net	Interest expense, net	(8,112)			(0.4	%)	(16,163)			(0.9	%)	8,051		(49.8	%)	Interest expense, net	(4,584)			(0.4	%)	(5,295)			(0.4	%)	711		(13.4	%)
Loss on extinguishment of debt																Loss on extinguishment of debt	(7,696)			(0.6	%)	—			—	%	(7,696)		100.0	%
Other expense, net	Other expense, net	(40,716)			(2.2	%)	(11,502)			(0.6	%)	(29,214)		254.0	%	Other expense, net	(7,223)			(0.6	%)	(25,505)			(2.1	%)	18,282		(71.7	%)
Earnings before income tax expense	Earnings before income tax expense	95,794			5.1	%	151,972			8.5	%	(56,178)		(37.0	%)	Earnings before income tax expense	44,175			3.6	%	59,021			4.8	%	(14,846)		(25.2	%)
Income tax expense	Income tax expense	32,743			1.7	%	43,588			2.4	%	(10,845)		(24.9	%)	Income tax expense	12,907			1.1	%	21,127			1.7	%	(8,220)		(38.9	%)
Net earnings	Net earnings	63,051			3.4	%	108,384			6.1	%	(45,333)		(41.8	%)	Net earnings	31,268			2.5	%	37,894			3.1	%	(6,626)		(17.5	%)
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	9,284			0.5	%	5,436			0.3	%	3,848		70.8	%	Net earnings attributable to noncontrolling interests	4,040			0.3	%	5,962			0.5	%	(1,922)		(32.2	%)
Net earnings attributable to Guess?, Inc.	Net earnings attributable to Guess?, Inc.	$	53,767		2.9	%	$	102,948		5.8	%	$	(49,181)	(47.8	%)	Net earnings attributable to Guess?, Inc.	$	27,228		2.2	%	$	31,932		2.6	%	$	(4,704)	(14.7	%)

Net earnings per common share attributable to common stockholders:	Net earnings per common share attributable to common stockholders:															Net earnings per common share attributable to common stockholders:
Basic	Basic	$	0.93				$	1.58				$	(0.65)			Basic	$	0.50				$	0.54				$	(0.04)
Diluted	Diluted	$	0.80				$	1.55				$	(0.75)			Diluted	$	0.46				$	0.46				$	—

Effective income tax rate	Effective income tax rate	34.2		%			28.7		%							Effective income tax rate	29.2		%			35.8		%

Net Revenue. Net revenue ~~increased~~decreased by ~~$78~~$2 million ~~or 4%,~~for the six months ended July 29, 2023 compared to the same prior-year period. Currency translation fluctuations relating to our non-U.S. operations unfavorably impacted net revenue by ~~$170.1~~$10 million compared to the same prior-year period. In constant currency, net revenue increased by ~~14%~~1%. ~~Roughly 40% of the~~ The increase in constant currency ~~net revenue~~ was mainly driven by ~~higher wholesale revenue, nearly 25% from the operation~~increases of ~~stores in the current year period that had been temporarily closed in the same prior-year period, and 15%~~1% from each of ~~positive store comparable sales and~~ net new concession revenues and positive comparable store ~~openings.~~sales, partially offset by 2% of lower wholesale revenues.

Gross Margin. Gross margin ~~decreased 2.5%~~increased 0.7% for the ~~nine~~six months ended ~~October~~July 29, ~~2022 compared to the same prior-year period.~~ The decrease in gross margin was mainly driven by lower product margin. The product margin decrease was mainly driven by 110 basis points due to higher markdowns and 100 basis points due to unfavorable currency impacts. Overall, occupancy rate increased 30 basis points mainly driven by lower COVID relief2023 compared to the same prior-year period, driven by 190 basis points due to higher initial markups and ~~higher occupancy costs,~~60 basis points due to favorable revenue mix, partially offset by ~~leveraging~~100 basis points of ~~expenses.~~unfavorable currency impact and 50 basis points of higher store occupancy costs.

Gross Profit. Gross profit ~~decreased $12~~increased $9 million for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year ~~perio~~d.period. The ~~decrease~~increase in gross profit was driven by ~~$94~~$24 million due to higher initial markups and $11 million from the favorable impact of higher revenues, partially offset by $17 million due to the unfavorable impact of currency, including $3 million of unfavorable currency translational impact, as well as $7 million of higher store occupancy costs.

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of currency, including $78 million of unfavorable currency translational impact, $22 million of higher markdowns, $11 million of lower COVID relief compared to the prior year, partially offset by the $125 million impact of higher revenues in constant currency.

SG&A Rate. Our SG&A rate ~~decreased 0.2%~~increased 2.9% for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 from the same prior-year period. The ~~favorable~~unfavorable change in SG&A rate was ~~due to a 250 basis point impact of higher revenues in constant currency and 70 basis points of lower performance-based compensation, partially offset~~mainly driven by 210 basis points ofdue to higher ~~SG&A~~ expenses ~~described below, including store labor costs.~~and 90 basis points due to lower COVID-related government subsidies.

SG&A Expenses. SG&A expenses increased ~~by $23~~$35 million for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 from the same prior-year period. TheThe increase in SG&A expenses was mainly driven by ~~$43~~$27 million of higher expenses ~~including~~primarily from store labor costs, investment in infrastructure and ~~$34 million related to revenue growth, partially offset by the favorable impact of currency translation fluctuations of $52 million and $14~~inflationary pressures, $11 million of lower ~~performance-based compensation.~~COVID-related government subsidies and $3 million due to business mix. Currency translation fluctuations relating to our foreign operations favorably impacted SG&A expenses by $2 million.

Asset Impairment Charges. During the ~~nine~~six months ended ~~October~~July 29, 2023 and July 30, 2022, we recognized ~~$5.3~~$4.6 million and $3.5 million, respectively, of property and equipment and operating lease ROU ~~assets~~asset impairment charges related to certain retail locations resulting from under-performance and expected store closures. During the nine months ended October 30, 2021, we recognized $3.1 million for the impairment of certain operating lease ROU assets and property and equipment related to certain retail locations resulting from lower revenue and future cash flow projections from the ongoing effects of the COVID-19 pandemic and expected store closures.

Net ~~(Gains) Losses~~Gains on Lease Modifications. During the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, we recorded net gains on lease modifications of ~~$1.7~~$2.4 million and ~~net losses of $0.4~~$1.5 million, ~~on lease modifications,~~ respectively, related primarily to the early termination of lease agreements for certain retail locations.

Operating Margin. Operating margin decreased ~~2.3%~~2.1% for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year ~~period.~~period. The decrease in operating margin was driven primarily by ~~a 210~~270 basis ~~point impact from~~points of higher expenses, ~~including store labor costs, a 140~~120 basis ~~point~~points due to the unfavorable currency impact ~~from currency translation, a~~and 110 basis ~~point impact from higher markdowns, and a 60 basis point impact~~points from lower ~~rent relief and~~ government subsidies compared to the same prior-year period, partially offset by ~~320~~190 basis points ~~of leveraging of expenses~~ from higher ~~revenues.~~ ~~Higher expenses related to certain professional service~~initial markups and ~~legal fees and related (credits) costs unfavorably impacted operating margin by 30~~60 basis ~~points.~~points from the favorable impact of business mix. Excluding the impact of asset impairment charges, certain professional service and legal fees and related (credits) costs and net gains ~~(losses)~~ on lease modifications, our operating margin would have decreased ~~2.0%~~2.5% compared to the same prior-year period.

Earnings from Operations. ~~Earnings~~As a result of the foregoing, earnings from operations decreased by ~~$35~~$26 million for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year period. Currency ~~translation~~ fluctuations relating to our foreign operations unfavorably impacted earnings from operations by ~~$26 million.~~$15 million, including $1 million of unfavorable translational impact.

Loss on Extinguishment of Debt. During the six months ended July 29, 2023, we recorded a loss of $8 million related to the partial extinguishment of our 2024 Notes. There was no loss on extinguishment of debt during the six months ended July 30, 2022.

Other Expense, Net. Other expense, net for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 was ~~$41~~$7 million compared to ~~$12~~$26 million in the same prior-year period. The change was primarily due to ~~higher net~~lower unrealized and realized losses from foreign currency ~~exposures and, to a lesser extent, net unrealized losses on our SERP related assets compared to net unrealized gains in the same prior-year period.~~exposures.

Income Tax Expense. Income tax expense for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 was ~~$33~~$13 million, or a ~~34.2%~~29.2% effective income tax rate, compared to ~~income tax expense of $44~~$21 million, or a ~~28.7%~~35.8% effective income

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tax rate in the same prior-year period. ~~Generally, income~~Income tax expense for the interim periods is computed using the income tax rate estimated to be applicable for the full fiscal year, adjusted for discrete items, which is subject to ongoing review and evaluation by management. The change in the effective income tax rate was primarily due to ~~a decrease in earnings,~~the discrete items, which included losses in certain tax jurisdictions for which we did not recognize an income tax benefit in fiscal ~~2023~~2024 compared to the same prior-year period.

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Net Earnings Attributable to Guess?, Inc. Net earnings attributable to Guess?, Inc. decreased ~~$49~~$5 million for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year period. Diluted EPS ~~decreased $0.75~~remained consistent at $0.46 for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year period. We estimate a ~~net~~ positive impact from ~~our adoption of new accounting guidance related to our Notes and~~ share buybacks of ~~$0.16~~$0.04 and a ~~negative~~positive impact from currency of ~~$0.53~~$0.02 on diluted EPS in the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 when compared to the same prior-year period.

Refer to “Non-GAAP Measures” for an overview of our non-GAAP, or adjusted, financial results for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021.~~2022. Excluding the impact of these non-GAAP items, adjusted net earnings attributable to Guess?, Inc. decreased ~~$57~~$2 million and adjusted diluted EPS ~~decreased $0.73~~increased $0.03 for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year period. We estimate a ~~net~~ positive impact from our share buybacks of ~~$0.12~~$0.07 and a ~~negative~~positive impact from currency of ~~$0.61~~$0.01 on adjusted diluted EPS in the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 when compared to the same prior-year period.

Information by Business Segment

The following presents our net revenue and earnings (loss) from operations by segment (in thousands):


		Nine Months Ended											Six Months Ended
		Oct 29, 2022			Oct 30, 2021			$ change		% change			Jul 29, 2023			Jul 30, 2022			$ change		% change

Net revenue:	Net revenue:											Net revenue:
Europe												Europe	$	646,509		$	612,716		$	33,793	5.5	%
Americas Retail	Americas Retail	$	513,743		$	511,449		$	2,294	0.4	%	Americas Retail	311,112			348,140			(37,028)		(10.6	%)
Americas Wholesale	Americas Wholesale	171,733			154,287			17,446		11.3	%	Americas Wholesale	95,073			118,552			(23,479)		(19.8	%)
Europe		936,470			895,311			41,159		4.6	%
Asia	Asia	168,705			160,610			8,095		5.0	%	Asia	129,712			105,587			24,125		22.8	%
Licensing	Licensing	78,915			70,039			8,876		12.7	%	Licensing	51,904			51,168			736		1.4	%
Total net revenue	Total net revenue	$	1,869,566		$	1,791,696		77,870		4.3	%	Total net revenue	$	1,234,310		$	1,236,163		(1,853)		(0.1	%)
Earnings (loss) from operations:	Earnings (loss) from operations:											Earnings (loss) from operations:
Europe												Europe	$	48,789		$	52,428		(3,639)		(6.9	%)
Americas Retail	Americas Retail	$	49,552		$	82,260		(32,708)		(39.8	%)	Americas Retail	11,974			38,187			(26,213)		(68.6	%)
Americas Wholesale	Americas Wholesale	39,068			41,815			(2,747)		(6.6	%)	Americas Wholesale	24,158			28,839			(4,681)		(16.2	%)
Europe		88,650			100,124			(11,474)		(11.5	%)
Asia	Asia	(6,792)			(9,054)			2,262		(25.0	%)	Asia	3,291			(6,787)			10,078		(148.5	%)
Licensing	Licensing	70,499			63,987			6,512		10.2	%	Licensing	48,649			45,650			2,999		6.6	%
Total segment earnings from operations	Total segment earnings from operations	240,977			279,132			(38,155)		(13.7	%)	Total segment earnings from operations	136,861			158,317			(21,456)		(13.6	%)
Corporate overhead	Corporate overhead	(92,757)			(95,960)			3,203		(3.3	%)	Corporate overhead	(71,058)			(66,541)			(4,517)		6.8	%

Asset impairment charges	Asset impairment charges	(5,252)			(3,094)			(2,158)		69.7	%	Asset impairment charges	(4,556)			(3,463)			(1,093)		31.6	%

Net gains (losses) on lease modifications		1,654			(441)			2,095		(475.1	%)
Net gains on lease modifications												Net gains on lease modifications	2,431			1,508			923		61.2	%

Total earnings from operations	Total earnings from operations	$	144,622		$	179,637		$	(35,015)	(19.5	%)	Total earnings from operations	$	63,678		$	89,821		$	(26,143)	(29.1	%)

Operating margins:	Operating margins:											Operating margins:
Europe												Europe	7.5		%	8.6		%
Americas Retail	Americas Retail	9.6		%	16.1		%					Americas Retail	3.8		%	11.0		%
Americas Wholesale	Americas Wholesale	22.7		%	27.1		%					Americas Wholesale	25.4		%	24.3		%
Europe		9.5		%	11.2		%
Asia	Asia	(4.0		%)	(5.6		%)					Asia	2.5		%	(6.4		%)
Licensing	Licensing	89.3		%	91.4		%					Licensing	93.7		%	89.2		%
Total Company	Total Company	7.7		%	10.0		%					Total Company	5.2		%	7.3		%

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~~Americas Retail~~Europe

Net revenue from our ~~Americas Retail~~Europe segment increased by $2$34 million, or ~~less than 1%~~6%, for the ~~nine~~six months ended ~~October~~July 29, ~~2022 compared to~~2023 from the same prior-year period. Currency translation fluctuations ~~relating to our non-U.S. retail stores and e-commerce sites~~ had an unfavorable impact on net revenue of $3$6 million. In constant currency, net revenue increased by ~~1% compared to the same prior-year period. T~~he7%. The increase in net revenue in constant currency was mainly driven by ~~$17~~increases of $32 million due to positive comparable sales, $7 million due to higher productivity levels from ~~the operation~~newly opened and remodeled stores and $3 million of ~~stores during the current year period that had been temporarily closed in the same prior-year period. This was~~higher e-commerce sales, partially offset by $5$3 million of lower ~~e-commerce sales and $2 million for each~~wholesale revenue due to earlier shipments in the fourth quarter of ~~negative comparable sales and net permanent store closures.~~the prior year. Comparable sales (including e-commerce) ~~decreased 2%~~increased 11% in U.S. dollars and 1%12% in constant currency compared to the same prior-year ~~period.~~quarter. The inclusion of our e-commerce sales decreased the comparable sales percentage by 1%2% in U.S. dollars and no impact in constant currency. As of October 29, 2022, we directly operated 383 stores in the Americas compared to 387 stores at October 30, 2021, excluding concessions, which represents a 1% decrease from the same prior-year period.

~~Operating margin decreased 6.5% for the nine months ended October 29, 2022 compared to the same prior-year period.~~ Approximately 320 basis points of the decrease was driven by higher expenses, including higher store labor costs, 250 basis points was due to higher markdowns and 120 basis points was due to lower rent relief and lower government subsidies. This was partially offset by higher initial markups.

~~Earnings from operations from our Americas Retail segment decreased $33 million for the nine months ended October 29, 2022 compared to the same prior-year p~~eriod. Higher expenses, including store selling costs, drove $17 million of the decrease, $13 million was due to higher markdowns and $6 million was due to lower rent relief and government subsidies. This was partially offset by higher initial markups.

~~Americas Wholesale~~

~~Net revenue from our Americas Wholesale segment increased by $17 million, or 11%, for the nine months ended October 29, 2022 from the same prior-year period.~~ Approximately 75% of the increase in constant currency was driven by our Mexico wholesale business and approximately 30% from our Canada wholesale business, partially offset by lower shipments in our U.S. wholesale business. ~~Currency translation fluctuations relating to our non-U.S. wholesale businesses had an unfavorable impact on net revenue of $1 million.~~

~~Operating margin decreased 4.4% for the nine months ended October 29, 2022 from the same prior-year period.~~ ~~The decrease in operating margin was mainly driven by 430 basis points of higher markdowns, partially offset by leverage from higher revenues.~~

~~Earnings from operations from our Americas Wholesale~~ segment decreased by $3 million for the nine months ended October 29, 2022 from the same prior-year period. Approximately $7 million of the decrease is due to higher markdowns, partially offset by the impact of higher revenues.

~~Europe~~

~~Net revenue from our Europe segment increased by $41 million, or 5%, for the nine months ended October 29, 2022 from the same prior-year period. In constant currency, net revenue increased by 21%.~~ The increase was driven by $81 million of higher wholesale shipments, $46 million from the operation of stores in the current year period that had been temporarily closed in the same prior-year period, $36 million of positive store comparable sales and $23 million of net new store openings, ~~partially offset~~ ~~by $146 million of unfavorable currency translation impact.~~ Comparable sales (including e-commerce) decreased 6% in U.S. dollars and increased 8% in constant currency compared to the same prior-year period. The inclusion of our e-commerce sales decreased the comparable sales percentage by 3% ~~in U.S. dollars and 5%~~ in constant currency. Our retail sales in Turkey, a relatively small market, had an outsized impact on our comparable sales (including e-commerce) for the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, contributing a positive impact of 1% in U.S. dollars and 4%3% in constant currency, largely due to the current hyper-inflation environment in Turkey. As of ~~October~~July 29, ~~2022,~~2023, we directly operated ~~561~~546 stores in Europe compared to ~~540~~560 stores at ~~October~~July 30, ~~2021,~~2022, excluding concessions, which represents a ~~4% increase~~3% decrease from the same prior-year period.

Operating margin decreased 1.1% for the six months ended July 29, 2023 from the same prior-year period. The decrease in operating margin was driven primarily by 240 basis points of unfavorable currency impact, 190 basis points of higher expenses and 180 basis points of lower government subsidies compared to the prior year, partially offset by 290 basis points from higher initial markups and 210 basis points due to the favorable impact of higher revenues.

Earnings from operations from our Europe segment decreased by $4 million, or 7%, for the six months ended July 29, 2023 compared to the same prior-year period. The decrease in operating profit was mainly driven by $16 million of unfavorable currency impact, $13 million of higher expenses and $12 million of lower COVID-related government subsidies, partially offset by $19 million due to higher initial markups and a $17 million favorable impact of higher revenues.

Americas Retail

Net revenue from our Americas Retail segment decreased by $37 million, or 11%, for the six months ended July 29, 2023 compared to the same prior-year period. Currency translation fluctuations relating to our non-U.S. retail stores and e-commerce sites had a minimal impact on net revenue. In constant currency, net revenue decreased by 11% compared to the same prior-year period. The decrease in net revenue in constant currency was primarily driven by $28 million due to negative comparable sales, $8 million due to the impact of net store closures and $2 million due to lower e-commerce revenues. Comparable sales (including e-commerce) decreased 9% in both U.S. dollars and constant currency compared to the same prior-year quarter. The inclusion of our e-commerce sales positively impacted the comparable sales percentage by 1% in both U.S. dollars and constant currency. As of July 29, 2023, we directly operated 364 stores in the Americas compared to 384 stores at July 30, 2022, excluding concessions, which represents a 5% decrease from the same prior-year period.

Operating margin decreased 7.2% for the six months ended July 29, 2023 compared to the same prior-year period. The decrease was driven primarily by 300 basis points from the unfavorable impact from lower revenues, 260 basis points from higher expenses and 120 basis points from higher markdowns.

Earnings from operations from our Americas Retail segment decreased $26 million for the six months ended July 29, 2023 compared to the same prior-year period. The change was primarily driven by $13 million of lower revenues, $8 million of higher expenses, including higher store costs, and $4 million of higher markdowns.

Americas Wholesale

Net revenue from our Americas Wholesale segment decreased by $23 million, or 20%, for the six months ended July 29, 2023 from the same prior-year period. Currency translation fluctuations relating to our non-U.S.

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wholesale businesses had a favorable impact on net revenue of $2 million. In constant currency, net revenue decreased by 22%. The decrease in net revenues in constant currency was driven by lower shipments in our U.S. wholesale business.

Operating margin ~~decreased 1.7%~~increased 1.1% for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 from the same prior-year ~~perio~~d.period. The ~~decrease~~increase in operating margin was ~~mainly~~ driven primarily by ~~260~~520 basis points ~~from unfavorable currency impacts and 170 basis points from~~of higher product margin mainly due to lower ~~initial markups,~~markdowns, partially offset by ~~favorable leverage from~~380 basis points of higher ~~revenues.~~expenses.

Earnings from operations from our ~~Europe~~Americas Wholesale segment decreased by ~~$11~~$5 million, or ~~11%~~16%, for the ~~nine~~six months ended ~~October~~July 29, ~~2022 compared to~~2023 from the same prior-year period,~~. The decrease in operating profit was~~ mainly driven by ~~$42~~$8 million ~~of unfavorable currency impacts, including a~~ ~~$26~~due to fewer shipments and $4 million ~~unfavorable translation impact, and an $18 million decrease in initial markups,~~ due to higher expenses, partially offset by ~~the favorable impact~~$5 million of higher ~~revenues.~~product margin due to lower markdowns.

Asia

Net revenue from our Asia segment increased by $8$24 million, or 5%23%, for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year period. Currency translation fluctuations had an unfavorable impact on net revenue of $6 million. In constant currency, net revenue increased by ~~17%~~28%. The increase in net revenue in constant currency was mainly driven by ~~$17~~increases of $16 million due to net new ~~store openings,~~concession revenues, including ~~stores~~concessions we recently acquired from our wholesale partners in Korea, $7$6 million due to higher wholesale shipments, $4 million of higher e-commerce revenues and $5$3 million ~~due to~~of positive comparable store sales. Comparable sales (including e-commerce) ~~decreased 5%~~increased 2% in U.S. dollars and ~~increased 5%~~7% in constant currency compared to the same prior-year period. The inclusion of our e-commerce sales ~~negatively~~positively impacted the comparable sales percentage by 1%2% in both U.S. dollars and constant currency. ~~Currency translation fluctuations relating to our~~ ~~Asian operations unfavorably impacted net revenue by $19 million.~~

Operating margin increased ~~1.6%~~8.9% for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 from the same prior-year ~~period.~~ period~~The increase in operating margin was mainly~~ , driven primarily by ~~480~~the favorable impact of 1,000 basis points due to higher revenues, partially offset by ~~the impact of~~190 basis points from higher expenses.

~~Loss~~Earnings from operations from our Asia segment ~~decreased by $2~~was $3 million ~~or 25%,~~ for the ~~nine~~six months ended ~~October~~July 29, ~~2022 from~~2023 compared to a loss of $7 million in the same prior-year ~~period. The decrease in losses was~~period, mainly driven by ~~$7 million due to~~ the impact of $12 million of higher revenues, partially offset by $3 million of higher expenses. Currency translation fluctuations relating to our Asia operations ~~unfavorably~~favorably impacted ~~the loss~~earnings from operations by ~~$0.5~~$0.1 million.

Licensing

Net royalty revenue from our Licensing segment increased by $9$1 million, or ~~13%~~1%, for the ~~nine~~six months ended ~~October~~July 29, ~~2022 compared~~2023 compared to the same prior-year period, mainly driven by higher royalties in our ~~handbag~~fragrance category.

Earnings from operations from our Licensing segment increased by $7$3 million, or ~~10%~~7%, for the ~~nine~~six months ended ~~October~~July 29, ~~2022 compared to~~2023 from the same prior-year period. ~~The increase was driven by the favorable impact to earnings from higher revenues.~~

Corporate Overhead

Unallocated corporate overhead ~~decreased~~increased by $3$5 million, or 3%7%, for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 from the same prior-year period, due to a decrease of $14 million in performance based compensation, partially offset by an increase of $5 million in expenses related to certain professional service and legal fees and related (credits) costs, an increase of $4 millionprimarily due to higher ~~personnel costs~~performance-based compensation, mark to market losses on our deferred compensation plan and ~~an increase of $1 million in advertising costs.~~various infrastructure investments.

Non-GAAP Measures

The financial information presented in this Quarterly Report includes non-GAAP financial measures, such as adjusted results and constant currency financial information. For the three and ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, the adjusted results exclude the impact of certain professional service and legal fees and related (credits) costs, asset impairment charges, net ~~(gains) losses~~gains on lease modifications, loss on extinguishment of debt, non-cash amortization of debt discount onof our 2028 Notes, the related income tax ~~impacts~~effects of these ~~adjustments,~~foregoing items, the impact from changes in the income tax law on deferred income taxes in certain tax jurisdictions, ~~net income tax~~

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~~settlements and adjustments to specific uncertain income tax positions,~~ as well as certain discrete income tax adjustments related primarily to an intra-entity transfer of intellectual property rights from certain U.S. entities to a wholly-owned Swiss subsidiary, in each case where

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applicable. These non-GAAP measures are provided in addition to, and not as alternatives for, our reported GAAP results.

These items affect the comparability of our reported results. The financial results are also presented on a non-GAAP basis, as defined in Section 10(e) of Regulation S-K of the ~~SEC,~~United States Securities and Exchange Commission (the “SEC”), to exclude the effect of these items. We have excluded these items from our adjusted financial measures primarily because we believe these items are not indicative of the underlying performance of our business and the adjusted financial information provided is useful for investors to evaluate the comparability of our operating results and our future outlook (when reviewed in conjunction with our GAAP financial statements).

A reconciliation of reported GAAP results to comparable non-GAAP results follows (in thousands, except per share data):

Three Months Ended Nine Months Ended
Oct 29, 2022 Oct 30, 2021 Oct 29, 2022 Oct 30, 2021
Reported GAAP net earnings attributable to Guess?, Inc. $ 21,835 $ 29,880 $ 53,767 $ 102,948
Certain professional service and legal fees and related (credits) costs1
1,508 550 7,185 1,737
Asset impairment charges2
1,789 1,152 5,252 3,094
Net (gains) losses on lease modifications3
(146) 3,006 (1,654) 441
Amortization of debt discount4
— 2,782 — 8,344
Discrete income tax adjustments5
208 5,912 624 6,140
Income tax impact from adjustments6
(448) (1,729) (2,318) (3,200)
Total adjustments affecting net earnings attributable to Guess?, Inc. 2,911 11,673 9,089 16,556
Adjusted net earnings attributable to Guess?, Inc. $ 24,746 $ 41,553 $ 62,856 $ 119,504
Net earnings per common share attributable to common stockholders:
GAAP diluted7
$ 0.34 $ 0.45 $ 0.80 $ 1.55
Adjusted diluted7
$ 0.44 $ 0.62 $ 1.06 $ 1.79
Weighted average common shares outstanding attributable to common stockholders:
GAAP diluted7
67,102 65,852 70,705 65,893
Adjusted diluted7
55,204 65,852 58,807 65,893


	Three Months Ended				Six Months Ended
	Jul 29, 2023		Jul 30, 2022		Jul 29, 2023		Jul 30, 2022
Reported GAAP net earnings attributable to Guess?, Inc.	$	39,033	$	23,962	$	27,228	$	31,932
Certain professional service and legal fees and related (credits) costs1	201		1,260		1,112		5,677
Asset impairment charges2	2,622		1,919		4,556		3,463
Net gains on lease modifications3	(2,431)		(907)		(2,431)		(1,508)
Loss on extinguishment of debt4	—		—		7,696		—
Amortization of debt discount5	163		—		188		—
Discrete income tax adjustments6	249		(2,772)		497		416
Income tax impact from adjustments7	(125)		(589)		(2,621)		(1,870)
Total adjustments affecting net earnings attributable to Guess?, Inc.	679		(1,089)		8,997		6,178
Adjusted net earnings attributable to Guess?, Inc.	$	39,712	$	22,873	$	36,225	$	38,110

Net earnings per common share attributable to common stockholders:
GAAP diluted	$	0.59	$	0.35	$	0.46	$	0.46
Adjusted diluted8	$	0.72	$	0.39	$	0.65	$	0.62
Weighted average common shares outstanding attributable to common stockholders:
GAAP diluted	69,869		70,299		65,608		72,443
Adjusted diluted8	54,026		58,482		54,871		60,626

______________________________________________________________________

Notes:

1 ~~Amounts recorded~~Adjustments represent certain professional service and legal fees and related (credits) costs which we otherwise would not have incurred as part of our business operations.

2 ~~Amounts~~Adjustments represent asset impairment charges related primarily to impairment of property and equipment and operating ~~lease~~ right-of-use assets related to certain retail locations resulting from under-performance and expected store closures.

3 ~~Amounts recorded~~Adjustments represent net ~~(gains) losses~~gains on lease modifications related primarily to the early termination of certain lease agreements.

4Adjustment represents loss on extinguishment of debt from a portion of the exchanged 2024 Notes in April 2023.

5In April ~~2019,~~2023, we issued ~~$300~~$275 million principal amount of ~~the Notes~~3.75% convertible senior notes due 2028 in a private offering. ~~Prior to adoption of ASU 2020-06, we separated the Notes into liability (debt) and equity (conversion option) components.~~ The debt discount, which ~~represented an amount equal to~~resulted from the ~~fair value~~modification accounting for a portion of the ~~equity component, was~~exchanged 2024 Notes, will be amortized as non-cash interest expense over the term of the 2028 Notes. We adopted ASU 2020-06 under the modified retrospective method as of January 30, 2022. Upon adoption, the equity component was eliminated in the current period and recorded as an adjustment to retained earnings. Prior periods are not affected.

56 ~~Amounts~~Adjustments represent discrete income taxes related primarily to the impact from changes in the income tax law on deferred income taxes in certain tax jurisdictions and adjustments from an intra-entity transfer of intellectual property rights from certain U.S. entities to a wholly-owned Swiss ~~subsidiary, impacts from cumulative valuation allowances and the income tax benefits from an income tax rate change due to net operating loss carrybacks.~~subsidiary.

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7The income tax effect of certain professional service and legal fees and related (credits) costs, asset impairment charges, net ~~(gains) losses~~gains on lease modifications, loss on extinguishment of debt and ~~the~~ amortization of debt discount was based on ~~the~~ our assessment of deductibility using the statutory income tax rate (inclusive of the impact of valuation allowances) of the tax jurisdiction in which the charges were incurred.

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7 Prior to adoption of ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40), for GAAP purposes, we incurred dilution above the initial strike price of our Notes of $25.78. At October 30, 2021, there was no dilution related to the Notes for the period.

We adopted ASU 2020-06 under the modified retrospective method as of January 30, 2022. Upon adoption, we prospectively utilize the if-converted method to calculate GAAP diluted EPS. For GAAP purposes, we incur dilution of our Notes based on the initial conversion rate associated with the Notes. For the three and nine months ended October 29, 2022, shares used in computing diluted EPS increased by 11.9 million shares due to the change from the treasury stock method to the if-converted method. Diluted net income per share for the three and nine months ended October 29, 2022 is calculated based on GAAP net income and diluted weighted-average shares of 67.1 million and 70.7 million, respectively, which also includes the potentially dilutive effect of our stock options, restricted stock units and the Notes.

~~For adjusted diluted shares, we~~ exclude the dilutive impact of the 2024 Notes at initial stock prices below $46.88 and the 2028 Notes at initial stock prices below $41.80, based on the bond hedge contracts in place that will deliver shares to offset dilution. At initial stock prices in excess of $46.88 for the 2024 Notes and $41.80 for the 2028 Notes, we would have an obligation to deliver additional shares in excess of the dilution protection provided by the bond hedges.

Our discussion and analysis herein also includes certain constant currency financial information. Foreign currency exchange rate fluctuations affect the amount reported from translating our foreign revenue, expenses and balance sheet amounts into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results under GAAP. We provide constant currency information to enhance the visibility of underlying business trends, excluding the effects of changes in foreign currency translation rates. To calculate net revenue, comparable store sales and earnings (loss) from operations on a constant currency basis, operating results for the current-year period are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year. To calculate balance sheet amounts on a constant currency basis, the current period balance sheet amount is translated into U.S. dollars at the exchange rate in effect at the comparable prior-year period end. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency that is different from the functional currency of that entity when exchange rates fluctuate. ~~The constant currency information presented may not be comparable to similarly titled measures reported by other companies.~~

In calculating the estimated impact of currency fluctuations (including translational and transactional impacts) on other measures such as earnings (loss) per share, we estimate gross margin (including the impact of foreign exchange currency contracts designated as cash flow hedges for anticipated merchandise purchases) and expenses using the appropriate prior-year rates, translate the estimated foreign earnings (loss) at the comparable prior-year rates and ~~exclude~~consider the year-over-year earnings impact of gains or losses arising from balance sheet remeasurement and foreign exchange currency contracts not designated as cash flow hedges for merchandise purchases. The constant currency information presented may not be comparable to similarly titled measures reported by other companies.

Liquidity and Capital Resources

We use our liquidity globally primarily to fund our working capital, occupancy costs, interest and principal payments on our debt, remodeling and rationalization of our retail stores, shop-in-shop programs, concessions, systems, infrastructure, compensation expenses, other existing operations, expansion plans, international growth and potential acquisitions and investments. ~~If we experience a sustained decrease in consumer demand, we may require access to additional credit, which may not be available to us on commercially acceptable terms, or at all.~~ Generally, our working capital needs are highest during the late summer and fall as our inventories increase before the holiday selling period. In addition, in the U.S., we need liquidity ~~to fund share repurchases and~~for payment of dividends to our ~~stockholders.~~stockholders and to fund share repurchases, if any.

During the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, we relied primarily on trade credit, available cash, real estate and other operating leases, finance leases, proceeds from our credit facilities and term loans and internally generated funds to finance our operations. We anticipate we will be able to satisfy our ongoing cash requirements for the foreseeable future, including at least the next 12 months, for working capital, capital expenditures, payments on our debt, including the 2024 Notes, finance leases and operating leases, as well as lease modification payments, potential acquisitions and investments, expected income tax payments, ~~and share repurchases and~~ dividend payments to stockholders and share repurchases, if any, primarily with cash flow from operations and existing cash balances as supplemented by borrowings under our existing credit facilities, ~~and~~ proceeds from our term loans and other indebtedness, as needed. ~~We are in the process~~

On May 5, 2022, we entered into a €250 million revolving credit facility through a European subsidiary, which replaced certain European short-term borrowing arrangements. As of ~~negotiating~~July 29, 2023, we had approximately $165.3 million of borrowing capacity on this facility. On December 20, 2022, we entered into an ~~extension~~amendment of our ~~2021~~ senior secured asset-based revolving credit facility, which ~~is currently scheduled~~increased borrowing capacity from $120 million to ~~mature~~$150 million and extended the maturity date of the credit facility to December 20, 2027. As of July 29, 2023, we had approximately $118.0 million of borrowing capacity on ~~April 21, 2023. If we experience a sustained decrease in consumer demand related to the COVID-19 pandemic, the ongoing conflict in Ukraine or to economic,~~this facility.

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~~political~~Due to the seasonality of our business and cash needs, we may increase borrowings under our established credit facilities or ~~other conditions or events,~~enter new credit facilities from time-to-time during the next 12 months and beyond. If we experience a sustained decrease in consumer demand, we may require access to additional credit, which may not be available to us on commercially acceptable terms or at all. ~~(Such arrangements are described further~~

In April 2023, we issued $275 million aggregate principal amount of 2028 Notes and retired approximately $184.9 million aggregate principal of 2024 Notes in ~~“Part I, Item 1. Financial Statements – Note 9 – Borrowings and Finance Lease Obligations” in the Form 10-Q.)~~

~~Due to the seasonality of our business and cash needs, we may increase borrowings under our established credit facilities from time-to-time during the next 12 months and beyond.~~

a private offering. We expect to settle the principal amount of our remaining outstanding 2024 Notes in ~~2024~~fiscal 2025 and 2028 Notes in fiscal 2029 in cash and any excess in shares. Our outstanding Notes may be converted at the option of the holders as described in “Part I, Item 1. Financial Statements – Note 10 – Convertible Senior Notes and Related Transactions” of this Form 10-Q and in “Note 10 – Convertible Senior Notes and Related Transactions” of the Consolidated Financial Statements included in our Annual Report on Form 10-K. As of ~~October~~July 29, ~~2022,~~2023, none of the conditions allowing holders of the Notes to convert had been met. Pursuant to one of these conditions, if our stock trading price exceeds 130% of the conversion price of the Notes (currently ~~$25.21)~~approximately $24.68 per share for the 2024 Notes and $24.60 for the 2028 Notes) for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, the last trading day of any calendar quarter, holders of the Notes would have the right to convert their convertible notes during the next calendar quarter. In accordance with the terms of the ~~indenture~~indentures governing the 2024 Notes and the 2028 Notes, we ~~have adjusted~~are required to adjust the conversion rate and the conversion price of the 2024 Notes for quarterly dividends exceeding $0.1125 per share and of the 2028 Notes for quarterly dividends exceeding 0.225 per share. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the indenture governing the Notes. The convertible note hedge transaction we entered into in connection with our issuance of the Notes is expected generally to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of the Notes that are converted, as the case may be.

We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested. As a result of the 2017 Tax Cuts and Jobs Act, we had a substantial amount of previously taxed earnings that could be distributed to the U.S. without additional U.S. taxation. As of ~~October~~July 29, ~~2022,~~2023, we determined that approximately ~~$25.7~~$59.5 million of such foreign earnings are not indefinitely reinvested. The incremental tax cost to repatriate these earnings to the U.S. is immaterial. We intend to indefinitely reinvest the remaining earnings from ~~the~~ our foreign subsidiaries for which a deferred income tax liability has not already been recorded. We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings and regularly review our cash positions and determination of indefinite reinvestment of foreign earnings. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax.

As of ~~October~~July 29, ~~2022,~~2023, we had cash and cash equivalents of ~~$174.1~~$302.6 million, of which approximately ~~$52.8~~$123.5 million was held in the U.S. Excess cash and cash equivalents, which represent the majority of our outstanding balance, are held primarily in overnight deposit and short-term time deposit accounts and money market accounts. As of July 29, 2023, we had roughly $299 million of available global borrowing capacity, bringing our combined cash, cash equivalents and borrowing capacity to slightly over $600 million. Please refer to “Forward-Looking Statements” discussed above, “Part II, Item 1A. Risk Factors” in this Form 10-Q and “Part I, Item 1A. Risk Factors” contained in our most recent Annual Report on Form 10-K for the fiscal year ended January ~~29, 2022~~28, 2023 for a discussion of risk factors which could reasonably be likely to result in a decrease of internally generated funds available to finance capital expenditures and working capital requirements.

~~COVID-19 Impact on Liquidity~~Six Months Ended July 29, 2023 and July 30, 2022

~~Refer~~Operating Activities

Net cash provided in operating activities was $47.3 million for the six months ended July 29, 2023, compared to $1.5 million for the ~~“Business Update, Market Trends and Uncertainties” section and in “Part 1, Item 1. Financial Statements - Note 1 - Basis~~same prior-year period, or an improvement of ~~Presentation” for a discussion of the impact of the COVID-19 pandemic and global economic conditions on our financial performance and our liquidity.~~

In light of store closures and reduced traffic in stores, we have taken certain actions with respect to certain of our existing leases, including engaging with landlords to discuss rent deferrals as well as other rent concessions. We suspended rental payments and/or paid reduced rental amounts with respect to certain of our retail stores that were closed or experiencing drastically reduced customer traffic as a result of the COVID-19 pandemic. We also have successfully negotiated with several landlords, including some of our larger landlords$45.8 million. This

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and received rent abatement benefits as well as new lease terms for some of our affected leases. In some instances, where negotiations with landlords proved unsuccessful, we were engaged in litigation related to rent obligations both during the COVID-19 pandemic and through the term of the lease.

~~Nine Months Ended October 29, 2022 and October 30, 2021~~

~~Operating Activities~~

Net cash used in operating activities was $21.4 million for the nine months ended October 29, 2022, compared to net cash provided by operating activities of $4.6 million for the same prior-year period, or a deterioration of $26.0 million. This deteriorationimprovement was driven primarily by ~~unfavorable~~favorable changes in working capital, partially offset by non-cash adjustments to net earnings and lower net earnings ~~partially offset by lower tax payments~~ compared to the same prior-year period. The ~~unfavorable~~favorable changes in working capital were ~~due~~ primarily ~~to higher inventory levels as we placed orders earlier in order to mitigate some of the supply chain disruptions and experienced higher average unit costs~~ due to ~~the elevation of the quality of our products, our investments in sustainability~~improved inventory and ~~inflationary pressures.~~accounts receivable management.

Investing Activities

Net cash used in investing activities was ~~$72.0~~$35.8 million for the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, compared to ~~$40.4~~$51.2 million for the same prior-year period. Net cash used in investing activities for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 related primarily to investments in existing store remodeling programs and retail expansion and, to a lesser extent, technology and other infrastructure.

The ~~increase~~decrease in cash used in investing activities was driven primarily by ~~higher~~lower retail ~~remodel and~~ expansion costs and ~~higher~~lower investments in ~~technology and other~~ infrastructure during the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 compared to the same prior-year period. During the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, we opened 59ten directly-operated stores compared to 5536 directly-operated stores that were opened in the same prior-year period.

Financing Activities

Net cash provided by financing activities was $13.3 million for the six months ended July 29, 2023, compared to net cash used in financing activities ~~was $131.8 million for the nine months ended October 29, 2022, compared to $28.5~~of $181.1 million for the same prior-year period. ~~Net cash used in financing activities for the nine months ended October 29, 2022~~The improvement of $194.4 million was primarily due to $175 million of share repurchases related ~~primarily~~ to ~~our entrance into~~ the 2022 ASR Contract ~~to repurchase an aggregate of $175 million of our common stock~~in the same prior-year period, convertible senior note transactions entered into in April 2023 and ~~payment of dividends, partially offset by~~increased net ~~proceeds from borrowings.~~borrowings in Europe during the six months ended July 29, 2023.

Effect of Exchange Rates on Cash and Cash Equivalents ~~and Restricted Cash~~

During the ~~nine~~six months ended ~~October~~July 29, ~~2022,~~2023, changes in foreign currency translation rates ~~decreased~~increased our reported cash and cash equivalents ~~and restricted cash~~ balance by ~~$16.3~~$2.2 million compared to a decrease of ~~$13.8~~$10.3 million during the same prior-year period. Refer to “Foreign Currency Volatility” for further information on fluctuations in exchange rates.

Working Capital

As of ~~October~~July 29, ~~2022,~~2023, we had net working capital (including cash and cash equivalents) of ~~$417.8~~$402.8 million compared to ~~$466.2~~$448.7 million at January ~~29, 2022~~28, 2023 and ~~$466.6~~$338.7 million at ~~October~~July 30, ~~2021.~~

2022. Our primary working capital needs are for payments for inventories, salaries and wages, and the current portion of lease liabilities, ~~accounts receivable and inventory.~~ as well as principal payments on the 2024 Notes.

The accounts receivable balance consists of trade receivables relating primarily to our wholesale business in Europe and, to a lesser extent, to our wholesale businesses in the Americas and Asia, royalty receivables relating to our licensing operations, credit card and retail concession receivables related to our retail businesses and certain other receivables. Accounts receivable ~~decreased~~increased by ~~$2.0~~$16.7 million, or ~~0.6%~~5.5%, to ~~$319.3~~$318.4 million as of ~~October~~July 29, ~~2022,~~2023, from ~~$321.3~~$301.7 million at ~~October~~July 30, ~~2021.~~2022. On a constant currency basis, accounts receivable increased by ~~$46.2~~$2.1 million, or ~~14.4%~~0.7%, when compared to ~~October~~July 30, ~~2021.~~2022. As of ~~October~~July 29, ~~2022,~~2023, approximately ~~47%~~51% of our total net trade receivables and ~~61%~~60% of our European net trade receivables were subject to credit insurance coverage, certain bank guarantees or letters of credit for collection purposes. Our credit insurance coverage contains certain terms and conditions specifying deductibles and

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annual claim limits.

Inventory increased by ~~$92.1~~$18.9 million, or ~~19.1%~~3.5%, to ~~$574.6~~$554.4 million as of ~~October~~July 29, ~~2022,~~2023, from ~~$482.5~~$535.5 million at ~~October~~July 30, ~~2021.~~2022. On a constant currency basis, inventory increased by ~~$160.8~~$1.3 million, or ~~33.3%~~0.2%, when compared to ~~October~~July 30, ~~2021~~2022, driven primarily by ~~management initiatives~~the residual effect of last year’s initiative to mitigate supply chain disruptions, including accelerating product orders, as well as higher average unit costs due to the elevation of the quality of our products, our investments in sustainability and inflationary pressures.

Capital Expenditures

Gross capital expenditures totaled ~~$71.7~~$34.8 million, before deducting lease incentives of ~~$3.6~~$1.0 million, for the ~~nine~~six months ended ~~October~~July 29, ~~2022.~~2023. This compares to gross capital expenditures of ~~$40.6 million, before deducting lease incentives of $2.2~~$51.2 million for the same prior-year period.

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We will periodically evaluate strategic acquisitions and alliances and pursue those we believe will support and contribute to our overall growth ~~initiatives.~~initiatives and/or will leverage our global infrastructure and network of licensees and wholesale partners.

Dividends

On ~~November 22, 2022,~~August 23, 2023, we announced a regular quarterly cash dividend of ~~$0.225~~$0.30 per share on our common stock. The cash dividend will be paid on ~~December 23, 2022~~September 22, 2023 to shareholders of record as of the close of business on ~~December 7, 2022. In~~September 6, 2023. As a result of this dividend declaration and in accordance with the terms of the ~~indenture~~indentures governing the Notes, we will adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the Notes, effective as of ~~December 6, 2022.~~September 5, 2023. A corresponding adjustment is expected to be made to the strike prices with respect to the convertible note hedges and the warrants entered into by the Company in connection with the offering of the corresponding Notes, each of which will be decreased in accordance with the terms of the applicable convertible note hedge confirmations and warrant confirmations.

Decisions on whether, when and in what amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of our Board of Directors, which reserves the right to change or terminate our dividend practices at any time and for any reason without prior notice. The payment of cash dividends in the future will be based upon a number of business, legal and other considerations, including our cash flow from operations, capital expenditures, debt service and covenant requirements, cash paid for income taxes, earnings, share repurchases, economic conditions and U.S. and global liquidity.

Share Repurchases

During fiscal 2022, the Board of Directors terminated its previous 2012 $500 million share repurchase program and authorized a new $200 million share repurchase ~~program.~~program (the “2021 Share Repurchase Program”). On March 14, 2022, the Board of Directors expanded its repurchase authorization by $100 million. Repurchases may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program and the program may be discontinued at any time, without prior notice.

~~On March 18, 2022, pursuant to existing~~During the three months ended July 29, 2023, we did not make any share ~~repurchase authorizations, we entered into~~repurchases. During the ~~2022 ASR Contract with~~six months ended July 29, 2023, the 2022 ASR Counterparty to repurchase an aggregate of $175 million of our common stock. Under the 2022 ASR Contract, we made a payment of $175 million to the 2022 ASR Counterparty and received an initial delivery of approximately 3.3 million shares of common stock on March 21, 2022. We received a final settlement of an additional 5.2Company repurchased 2.2 million shares under its 2021 Share Repurchase Program at an aggregate cost of $42.8 million, including excise tax. These shares were repurchased through broker assisted market transactions in connection with the ~~2022 ASR Contract on June 24, 2022.~~

exchange and subscription offering related to the 2024 Notes and the 2028 Notes. During the ~~nine~~three and six months ended ~~October 29,~~July 30, 2022, we repurchased ~~8,985,603~~5.2 million and 9.0 million shares, respectively, of our common stock under our 2021 Share Repurchase Program at an aggregate cost of $105.0 million and $186.7 million, ~~all of which occurred during the six months ended July 30, 2022,~~respectively, which is inclusive of the shares repurchased under the 2022 ASR Contract. As of ~~October~~July 29, ~~2022,~~2023, we had remaining authority under the 2021 Share Repurchase Program to purchase ~~$62.3~~$19.7 million of our common stock. ~~There were no shares repurchased under our 2012 or 2021 Share Repurchase Programs during the three and nine months ended October 30, 2021.~~

Borrowings and Finance Lease Obligations and Convertible Senior Notes

In April 2023, we issued $275 million principal amount of the 2028 Notes in a private placement pursuant to separate, privately negotiated exchange and subscription agreements, pursuant to which, we exchanged approximately $184.9 million in aggregate principal amount of the 2024 Notes for $163.0 million in aggregate principal amount of the 2028 Notes and an aggregate of approximately $33.3 million in cash, and issued $112.0 million in aggregate principal amount of the 2028 Notes for cash at par. Immediately following the closing of the transactions, $115.1 million in aggregate principal amount of the 2024 Notes remained outstanding. Refer to ~~“Part I, Item 1. Financial Statements – Note 9 – Borrowings and Finance Lease Obligations” and~~ “Part I, Item 1. Financial Statements – Note 10 – Convertible Senior Notes and Related Transactions” in this Form 10-Q for disclosures about ~~our borrowings and finance lease obligations and~~ convertible senior ~~notes.~~notes and related transactions.

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In addition, refer to “Part I, Item 1. Financial Statements – Note 9 – Borrowings and Finance Lease Obligations” in this Form 10-Q for disclosures about our borrowings and finance lease obligations.

Supplemental Executive Retirement Plan

As a non-qualified pension plan, no dedicated funding of our SERP is required; however, we have made periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP.

The cash surrender values of the insurance policies were ~~$61.2~~$63.6 million and ~~$70.9~~$64.4 million as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, respectively, and were included in other assets in our condensed consolidated balance sheets. As a result of changes in the value of the insurance policy investments, we recorded immaterial unrealized gains in other income (expense) during the three and six months ended July 29, 2023, respectively, and unrealized losses of ~~$4.8~~$0.2 million and ~~$8.3~~$3.5 million in other income ~~and expense~~(expense) during the three and ~~nine~~six months ended ~~October 29, 2022, respectively, and unrealized gains of $0.1 million and $2.3 million in other income and expense during the three and nine months ended October~~July 30, ~~2021, respectively.~~2022. The projected benefit obligation was ~~$49.2~~$42.3 million and ~~$49.4~~$42.4 million as of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, respectively, and was included in accrued expenses and other current liabilities and other long-term liabilities in our condensed consolidated balance sheets depending on the expected timing of payments. SERP benefit payments of $0.5 million were made during each of the three months ended July 29, 2023 and ~~$1.4~~July 30, 2022. SERP benefit payments of $1.0 million were made during each of the ~~three and nine~~six months ended ~~October~~July 29, ~~2022, respectively. SERP benefit payments of $0.5 million~~2023 and ~~$1.4 million were made during the three and nine months ended October~~July 30, ~~2021, respectively.~~2022.

Material Cash Requirements

As of ~~October~~July 29, ~~2022,~~2023, except as disclosed above, there were no material changes to our material cash requirements from known contractual and other obligations, including commitments for capital expenditures, outside the ordinary course of business compared to the disclosures included under “Liquidity and Capital Resources - Material Cash Requirements” in ~~Item~~ Part II, Item 7 in our Form 10-K for the fiscal year ended January ~~29, 2022.~~28, 2023. Refer to “Part I, Item 1. Financial Statements – Note 9 – Borrowings and Finance Lease Obligations” and “Part I, Item 1. Financial Statements – Note 10 – Convertible Senior Notes and Related Transactions” for further ~~information on these arrangements.~~information.

Application of Critical Accounting Policies and Estimates

Our critical accounting policies reflecting our estimates and judgments are described in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended January ~~29, 2022~~28, 2023 filed with the SEC on March 24, ~~2022.~~2023. There have been no significant changes to our critical accounting policies ~~other than~~since the ~~January 30, 2022 adoption of ASU 2020-06 which impacted the accounting and financial statement presentation~~filing of our Notes and our calculation of diluted earnings per common share. Refer to “Part I, Item 1. Financial Statements – Note 3 - Earnings per Share” and “Part I, Item 1. Financial Statements – Note 10 -Convertible Senior Notes and Related Transactions” for further information.Annual Report on Form 10-K.

Recently Issued Accounting Guidance

Refer to “Part I, Item 1. Financial Statements – Note 1 – Basis of Presentation” for disclosures about recently issued accounting guidance.

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ITEM 3.Quantitative and Qualitative Disclosures About Market Risk.

Exchange Rate Risk

More than two-thirds of product sales recorded for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 were denominated in currencies other than the U.S. dollar. Our primary exchange rate risk relates to operations in Europe, Canada, South Korea, China, Hong Kong and Mexico. Changes in currencies affect our earnings in various ways. For further discussion on currency-related risk, please refer to our risk factors under “Part I, Item 1A. Risk Factors” contained in our most recent Annual Report on Form 10-K for the fiscal year ended January ~~29, 2022.~~

~~Foreign Currency Translation Adjustment~~

The local selling currency is typically the functional currency for all of our significant international operations. In accordance with authoritative guidance, assets and liabilities of our foreign operations are translated from foreign currencies into U.S. dollars at period-end rates, while income and expenses are translated at the weighted average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income (loss) within stockholders’ equity. In addition, we record foreign currency translation adjustments related to our noncontrolling interests within stockholders’ equity. Accordingly, our reported other comprehensive income (loss) could be unfavorably impacted if the U.S. dollar strengthens, particularly against the British pound, Canadian dollar, Chinese yuan, euro, Japanese yen, Korean won, Mexican peso, Polish zloty, Russian rouble and Turkish lira. Alternatively, if the U.S. dollar weakens relative to those currencies, our reported other comprehensive income (loss) could be favorably impacted. Our foreign currency translation adjustments recorded in other comprehensive income (loss) are significantly impacted by net assets denominated in euros.

Periodically, we may also use foreign exchange currency contracts to hedge the translation and economic exposures related to our net investments in certain of our international subsidiaries. Changes in the fair values of these foreign exchange currency contracts, designated as net investment hedges, are recorded in foreign currency translation adjustment as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

During the nine months ended October 29, 2022, the total foreign currency translation adjustment decreased stockholders’ equity by $38.1 million, driven primarily by the strengthening of the U.S. dollar against the euro.28, 2023.

Foreign Currency Transaction Gains and Losses

Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency, including gains and losses on foreign exchange currency contracts (see below), are included in the condensed consolidated statements of ~~income (loss).~~income. Net realized and unrealized foreign currency transaction losses of ~~$27.8~~$0.9 million and ~~$17.4~~$17.7 million were included in the determination of net earnings for the ~~nine~~six months ended ~~October~~July 29, ~~2022~~2023 and ~~October~~July 30, ~~2021,~~2022, respectively.

Foreign Exchange Currency ~~Contracts~~

We operate in foreign countries, which exposes us to market risk associated with foreign currency exchange rate fluctuations. Various transactions that occur primarily in Europe, Canada, South Korea, China, Hong Kong and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies. These types of transactions include U.S. dollar-denominated purchases of merchandise and U.S. dollar- and British pound-denominated intercompany liabilities. In addition, certain operating expenses, tax liabilities and pension-related liabilities are denominated in Swiss francs and are exposed to earnings risk as a result of exchange rate fluctuations when converted to the functional currency. Further, there are certain real estate leases that are denominated in a currency other than the functional currency of the respective entity that entered into the agreement (primarily Swiss francs, Russian roubles and Polish zloty). As a result, we may be exposed to volatility related to unrealized gains or losses on the translation of present value of future lease payment

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obligations when translated at the exchange rate as of a reporting period-end. We are also subject to certain translation and economic exposures related to our net investment in certain of our international subsidiaries. We enter into derivative financial instruments to offset some, but not all, of our exchange risk. In addition, some of the derivative contracts in place will create volatility during the fiscal year as they are marked-to-market according to the accounting rules and may result in revaluation gains or losses in different periods from when the currency impact on the underlying transactions are realized.

~~Foreign Exchange Currency Contracts Designated as Cash Flow Hedges~~

During the nine months ended October 29, 2022, we purchased U.S. dollar forward contracts in Europe totaling US$256.0 million that were designated as cash flow hedges. As of October 29, 2022, we had forward contracts outstanding for our European operations of US$275.0 million to hedge forecasted merchandise purchases, which are expected to mature over the next 18 months. Our foreign exchange currency contracts are recorded in our condensed consolidated balance sheet at fair value based on quoted market rates. Changes in the fair value of the U.S. dollar forward contracts, designated as cash flow hedges for forecasted merchandise purchases, are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are recognized in cost of product sales in the period that approximates the time the hedged merchandise inventory is sold.

As of October 29, 2022, accumulated other comprehensive income (loss) related to foreign exchange currency contracts included a $15.7 million net unrealized gain, net of tax, of which $13.9 million will be recognized in cost of product sales over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values.

~~As of October 29, 2022, the net unrealized gain of the remaining open forward contracts recorded in our condensed consolidated balance sheet was approximately $12.1 million.~~

At January 29, 2022, we had forward contracts outstanding for our European operations of US$146.0 million that were designated as cash flow hedges. At January 29, 2022, the net unrealized gain of these open forward contracts recorded in our condensed consolidated balance sheet was approximately $6.0 million.

~~Foreign Exchange Currency Contracts Not Designated as Hedging Instruments~~

We also have foreign exchange currency contracts that are not designated as hedging instruments for accounting purposes. Changes in fair value of foreign exchange currency contracts not designated as hedging instruments are reported in net earnings (loss) as part of other income (expense). For the nine months ended October 29, 2022, we recorded a net gain of $4.3 million for our euro dollar foreign exchange currency contracts not designated as hedges, which has been included in other income (expense). As of October 29, 2022, we had euro foreign exchange currency contracts to purchase US$49.5 million expected to mature over the next 14 months. As of October 29, 2022, the net unrealized gain of these open forward contracts recorded in our condensed consolidated balance sheet was approximately $2.1 million.

At January 29, 2022, we had euro foreign exchange currency contracts to purchase US$19.0 million. At January 29, 2022, the net unrealized gain of these open forward contracts recorded in our condensed consolidated balance sheet was approximately $1.1 million.

Contract Sensitivity Analysis

As of ~~October~~July 29, ~~2022,~~2023, a sensitivity analysis of changes in foreign currencies when measured against the U.S. dollar indicates that, if the U.S. dollar had uniformly weakened by 10% against all of the U.S. dollar denominated foreign exchange derivatives totaling US$~~324.5~~254.0 million, the fair value of the instruments would have decreased by ~~$36.1~~$28.2 million. Conversely, if the U.S. dollar uniformly strengthened by 10% against all of the U.S. dollar denominated foreign exchange derivatives, the fair value of these instruments would have increased by ~~$29.5~~$23.1 million. Any resulting changes in the fair value of the hedged instruments may be partially offset by changes in the fair value of certain balance sheet positions (primarily U.S. dollar denominated liabilities in our foreign operations) impacted by the change in the foreign currency rate. The ability to reduce

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the exposure of currencies on earnings depends on the magnitude of the derivatives compared to the balance sheet positions during each reporting cycle.

Interest Rate Risk

We are exposed to interest rate risk on our floating-rate debt. We have entered into interest rate swap agreements for certain of these agreements to effectively convert our floating-rate debt to a fixed-rate basis. The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with our floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. We have elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts.

In April ~~2019,~~2023, we issued ~~$300~~$275 million aggregate principal amount of ~~the~~2028 Notes and retired approximately $184.9 million aggregate principal of 2024 Notes in a private ~~offering.~~offering, leaving approximately $115.1 million aggregate principal amount of 2024 Notes outstanding at July 29, 2023. The fair value of the Notes is subject to interest rate risk, market risk and other factors due to aits conversion feature. The fair value of the Notes will generally increase as our common stock price increases and will generally decrease as our common stock price declines. The interest and market value changes affect the fair value of the Notes but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligation. Additionally, we carry the Notes at face value, less any unamortized ~~discount of~~ debt issuance costs on our balance sheet and we present the fair value for disclosure purposes only.

Interest Rate Swap Agreement ~~Designated as Cash Flow Hedge~~

The fair value of the interest rate swap agreement is based upon inputs corroborated by observable market data. Changes in the fair value of the interest rate swap agreement, designated as a cash flow hedge to hedge the variability of cash flows in interest payments associated with our floating-rate real estate secured loan (the “Mortgage Debt”), are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and are amortized to interest expense over the term of the related debt.

As of October 29, 2022, accumulated other comprehensive income (loss) related to the interest rate swap agreement included a net unrealized gain of $1.0 million net of tax, which will be recognized in interest expense over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current quarter-end values. As of October 29, 2022, the net unrealized gain of the interest rate swap recorded in our condensed consolidated balance sheet was approximately $1.3 million. As of January 29, 2022, the net unrealized loss of the interest rate swap recorded in our condensed consolidated balance sheet was approximately $0.1 million.

Sensitivity Analysis

As of ~~October~~July 29, ~~2022,~~2023, we had borrowings under our credit facility arrangements of ~~$123.2~~$127.3 million which are based on variable rates of interest. Accordingly, changes in interest rates would impact our results of operations in future periods. A 100 basis point increase in interest rates would not have had a significant effect on interest expense for the ~~nine~~six months ended ~~October~~July 29, ~~2022.~~2023.

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As of ~~October~~July 29, ~~2022,~~2023, we had indebtedness related to term loans of ~~$29.0~~$18.5 million, finance lease obligations of ~~$20.4~~$17.3 million and the Mortgage Debt of ~~$17.4~~$16.8 million. The term loans provide for annual interest rates ranging ~~between~~from 1.3% to ~~3.8%~~6.4%. The finance lease obligations are based on fixed interest rates derived from the respective agreements. ~~The~~For the six months ended July 29, 2023 (through May 1, 2023) and July 30, 2022, the interest rate on the Mortgage Debt ~~is covered by~~was a ~~separate~~variable rate based on LIBOR. In May 2023, the Company amended the terms of the Mortgage Debt for the interest rate to be based on SOFR, effective May 1, 2023. The Company also amended its existing interest rate swap agreement, ~~with~~resulting in a swap fixed ~~interest~~ rate of approximately ~~3.06%~~3.14% that matures in January ~~2026.~~2026 (prior to this amendment, the agreement resulted in a swap fixed rate of approximately 3.06%). The interest rate swap agreement is designated as a cash flow hedge and converts the nature of our Mortgage Debt from ~~LIBOR~~SOFR floating-rate debt to fixed-rate debt.

The fair values of our debt instruments are based on the amount of future cash flows associated with each instrument discounted using our incremental borrowing rate. As of ~~October~~July 29, ~~2022~~2023 and January ~~29, 2022,~~28, 2023, the carrying value was not materially different from fair value, as the interest rates on our debt approximated rates currently available to us. The fair value of ~~our~~the Notes is determined based on inputs that are observable in the market and have been classified as Level 2 in the fair value hierarchy.

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ITEM 4. Controls and Procedures.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the quarterly period covered by this report.

There was no change in our internal control over financial reporting during the ~~third~~second quarter of fiscal ~~2023~~2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.

Refer to “Part I, Item 1. Financial Statements – Note 13 – Commitments and Contingencies” in this Form 10-Q for disclosures about our legal and other proceedings.

ITEM 1A. Risk Factors.

Other than the risk factors noted below, there have not been any material changes in the Risk Factors as previously disclosed in our Annual Report on Form 10-K for the year ended January ~~29, 2022~~28, 2023 filed with the SEC on March 24, ~~2022.~~2023.

We may be unable to raise the funds necessary to repurchase our $115 million 2.0% convertible senior notes due 2024 (the “2024 Notes”) or our $275 million 3.75% convertible senior notes due 2028 (the “2028 Notes”, and together with the 2024 Notes, the “Notes”) for cash following a fundamental change, or to pay any cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the Notes or pay cash upon their conversion.

Holders of our 2024 Notes and 2028 Notes may require us to repurchase their Notes following a fundamental change, at a cash repurchase price generally equal to the principal amount of the applicable series of Notes to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion, we will satisfy part or all of our conversion obligation in cash unless we elect to settle conversions solely in shares of our common stock. We will be required to repay each series of Notes in cash at their respective maturity, unless earlier converted or repurchased. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase each series of Notes or pay the cash amounts due upon conversion. In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness, including our current credit facilities and other agreements we may enter into in the future, may restrict our ability to make payments on each series of Notes other than scheduled principal and interest, and as a result, upon a fundamental change we may not be able to repurchase any or all of the Notes and upon any conversions of the applicable series of Notes may be unable to pay the cash amounts, if any, then due. Our inability to satisfy our obligations under the Notes could affect the terms of other financial obligations, harm our reputation and affect the trading price of our common stock.

Our ~~business~~failure to repurchase any or all of each series of Notes or to pay the cash amounts due upon conversion or at maturity when required will constitute a default under the indenture relating to the 2024 Notes (the “2024 Indenture”) or the indenture relating to the 2028 Notes (the “2028 Indenture”, and together with the 2024 Indenture, the “Indentures”). A default under the Indentures or the fundamental change itself could also lead to a default under agreements governing the Notes and our other indebtedness, which may ~~also be affected by existing or future sanctions and export controls targeting Russia and~~result in that other ~~responses~~indebtedness becoming immediately payable in full. We may not have sufficient funds to ~~Russia's invasion of Ukraine.~~

~~As a result of Russia's invasion of Ukraine,~~satisfy all amounts due under the ~~United States, the United Kingdom~~other indebtedness and the ~~European Union, among others, have developed coordinated sanctions and export control measures targeting Russia, Belarus,~~Notes.

Provisions in the Indentures for the 2024 Notes and the ~~Russian-controlled regions~~2028 Notes could delay or prevent an otherwise beneficial takeover of Ukraine (Crimea, Donetsk, and Luhansk). These measures include: (i) blocking sanctions prohibiting dealings with various Russian senior government officials, and companies in various sectors important to the Russian economy, including major Russian financial institutions; (ii) expanded sectoral sanctions related to designated Russian entities’ ability to raise capital; (iii) the disconnection of certain Russian and Belarusian banks from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) financial messaging network; (iv) a ban on new investment in Russia; (v) a ban on the provision of certain accounting, trust formation and management consulting services; (vi) bans on the import into the United States of certain Russian origin products, including various energy products; (vii) bans on the conduct of business or investment activityus.

Certain provisions in the ~~Russian-controlled Crimea, Donetsk~~Indentures for the 2024 Notes and ~~Luhansk regions of Ukraine; and (viii) restrictions on~~ the ~~export of various products~~2028 Notes could make a third-party attempt to ~~Russia and Belarus, including certain dual-use industrial and commercial products, and luxury goods. Additionally, certain logistics operators~~acquire us more difficult or expensive. If a takeover constitutes a fundamental change, then noteholders will have ~~imposed bans on direct air deliveries~~the right to ~~Russia and restrictions on land deliveries~~require us to ~~and from Russia, Belarus and Ukraine, none of which have had~~repurchase their respective Notes for cash. In addition, if a ~~material impact on our operations~~takeover constitutes a make-whole fundamental change, then we may be required to ~~date.~~

We are currently operating in Russia through wholesale and retail channels, and we have immaterial wholesale operations through local wholesale partners in Belarus and Ukraine. Our operations in Russia are operated primarily through Guess CIS, a majority-owned Russian subsidiary in which we had a 70% interest as of October 29, 2022 and January 29, 2022. Guess CIS currently operates 44 retail stores in Russia and acts as a distributor for our wholesale partners in Russia. We also operate in Russia through other local wholesale partners and by selling directly to retail customers through our European online store. Prior to February 2022, we also sold directly to retail customers in Ukraine and Belarus through our European online store. The local distributor through which we operate in Ukraine does not operate intemporarily increase the ~~Russian-controlled Crimea, Donetsk, or Luhansk regions of Ukraine.~~

~~Our operations in Russia, Belarus, and Ukraine represented less than 3%~~conversion rate. As well, each of the ~~Company’s total revenue for~~Indentures prohibits us from engaging in certain mergers or acquisitions unless, among other things, the ~~year ended January 29, 2022~~surviving entity assumes our obligations under the Notes. In such cases, and ~~3% for~~in other cases, our obligations under the ~~nine months ended October 29, 2022, with our operations~~Notes and the Indentures could increase the cost of acquiring us or otherwise discourage a third-party from acquiring us or removing incumbent management, including in ~~Russia comprising over 90% of this total revenue. As of October 29, 2022, our total assets in Russia, all of which are held by Guess CIS, represented less than 2%~~a transaction that noteholders or holders of our total assets, consisting primarily of leasehold right of use assets, store inventory, furnishings and fixtures and receivables. We only maintain inventory in Russia in an amount sufficient for operating our Russian retail stores. We do not maintain inventory or hold any other significant assets in Belarus or Ukraine.

The imposition of the current or possible future additional export controls and economic sanctions on transactions with Russia and Russian entities could limit or prevent us from (i) operating all or a portion of our business in Russia, (ii) performing under existing contracts involving our Russia business (including with respect to Guess CIS and the Company’s fulfillment of its pre-sanctions contractual obligation to purchase the Minority Holder’s 30% interest in Guess CIS pursuant to the Minority Holder’s exercise of the Put Option) or (iii) pursuing new business opportunities or maintaining adequate insurance coverage to protect our productscommon stock may view as favorable.

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~~and facilities in Russia. Additionally, the conflict in Ukraine could disrupt the operations of our distributor in that region and surrounding regions. Any~~The conditional conversion feature of the foregoing could adversely affect our business, supply chain, partners or customers. In addition, the conflict between Russia and Ukraine could lead to disruption, instability and volatility in global markets and industries that could negatively impact our operations. The scope of the impact of sanctions, export controls2024 Notes and the ~~ongoing conflict in Ukraine is impossible to predict at this time, and could have an adverse impact on our business.~~

~~Future changes to U.S. income tax or trade policies impacting multi-national companies could materially~~2028 Notes, if triggered, may adversely affect our financial condition and results of operations.

~~A significant~~In the event the conditional conversion feature of the 2024 Notes or the 2028 Notes is triggered, noteholders will be entitled to convert their respective Notes at any time during specified periods at their option. If one or more noteholders elect to convert their respective Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock, we would be required to settle all or a portion of the conversion obligation through the payment of cash, which could adversely affect our ~~product sales are generated outside~~liquidity. Even if noteholders do not elect to convert their respective Notes, we could be required under applicable accounting rules to reclassify all or a portion of the ~~U.S. In fiscal 2022, approximately 71%~~outstanding principal of the applicable series of Notes as a current liability, which would result in a material reduction of our ~~consolidated~~ net ~~product sales was generated by sales from outside~~working capital.

The Notes’ hedge and warrant transactions may affect the value of the ~~U.S.~~ Notes and our common stock.

In connection with the ~~long-term,~~offering of the 2024 Notes and the 2028 Notes, we ~~anticipate these international revenues will continue~~entered into convertible note hedge transactions with hedge counterparties. At the time of each offering, the applicable convertible note hedge transactions covered, subject to ~~grow as a percentage~~anti-dilution adjustments substantially similar to those applicable to the respective Notes, the number of shares of common stock that initially underlay the Notes. Concurrently with the convertible note hedge transactions related to each offering, we also entered into warrant transactions with the hedge counterparties relating to the same number of shares of our ~~total business.~~common stock, subject to customary antidilution adjustments. In connection with the retirement of $184.9 million in principal amount of the 2024 Notes in April 2023, we entered into Partial Termination Agreements with the relevant hedge counterparties to unwind a portion of the convertible note transactions and warrant transactions we initially entered into in connection with the issuance of the 2024 Notes. The ~~current political landscape has introduced greater uncertainty~~notional amount of the remaining portion of the convertible note hedge transactions and warrant transactions in connection with the 2024 Notes corresponded to the approximately $115.1 million in aggregate principal amount of the 2024 Notes that remained outstanding at that time. The convertible note hedge transactions are expected generally to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be. However, the warrant transactions could separately have a dilutive effect on our common stock to the extent that the market price per share of our common stock at maturity exceeds the strike price of the warrants.

It is our understanding that in connection with establishing their initial hedges of the convertible note hedge and warrant transactions, the hedge counterparties or affiliates thereof entered into various derivative transactions with respect to ~~future income tax~~our common stock concurrently with or shortly after the pricing of the respective Notes, and ~~trade regulations for U.S. companies with significant business~~may have unwound these derivative transactions and ~~sourcing operations outside the United States.~~

~~During fiscal 2022, we sourced most~~purchased shares of our ~~finished products with partners and suppliers outside~~common stock in open market transactions shortly following the ~~U.S. and we continued to design and purchase fabrics globally, with most coming from China. The ongoing economic conflict between~~pricing of the ~~U.S. and China has resulted in~~respective Notes. These activities could have increased tariffs being imposed on goods we import from China. We have been reducing our dependency on China sourcing, particularly for our U.S. business, and mitigating potential tariffs’ risks without compromising(or reduced the ~~quality~~size of any decrease in) the market price of our ~~products, while improving costs. However, we cannot predict whether, and~~common stock or the Notes at that time. In addition, the hedge counterparties or affiliates thereof may modify their hedge positions by entering into or unwinding various derivatives with respect to ~~what extent, there may be changes to international trade agreements, such as those with China,~~ our common stock and/or ~~whether quotas, duties, tariffs, exchange controls~~purchasing or selling our common stock or other ~~restrictions will be changed~~securities of ours in secondary market or ~~imposed by~~privately negotiated transactions prior to the ~~U.S.~~maturity of the Notes (and are likely to do so during any observation period related to a conversion of Notes). This activity could also cause or ~~by other countries. If we~~avoid an increase or our vendors or product licensees are unable to obtain raw materials or finished goods from the countries where we or they wish to purchase them, either because of such regulatory changes or for any other reason, or if the cost of doing so should increase, it could have a ~~material adverse effect on our results of operations and financial condition.~~

As a result of Russia's invasion of Ukraine, the United States, the United Kingdom and the European Union, among others, have developed coordinated sanctions and export control measures targeting Russia, Belarus, and the Russian-controlled regions of Ukraine (Crimea, Donetsk, and Luhansk). While these sanctions and export control measures have not significantly disrupted our sales in these regions, if the disruptions continue over a prolonged period, or if additional export controls or economic sanctions on transactions with Russia and Russian entities are imposeddecrease in the ~~future~~market price of our ~~sales in these regions and our results of operations could be adversely impacted. For further information regarding~~common stock or the ~~risks we face relating to Russia’s invasion of Ukraine, refer to “-Our business may also be affected by existing or future sanctions and export controls targeting Russia and other responses to Russia's invasion of Ukraine.”~~

Notes.

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ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Items (a) and (b) are not applicable.

Item (c). Issuer Purchases of Equity Securities

Our share repurchases during each fiscal month of the ~~third~~second quarter of fiscal ~~2023~~2024 were as follows:


Period	Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs		Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
July 31, 2022 to August 27, 2022
April 30, 2023 to May 27, 2023								April 30, 2023 to May 27, 2023
Repurchase program1	Repurchase program1	—	—		—	$	62,267,634	Repurchase program1	—	—		—	$	19,748,066
Employee transactions2	Employee transactions2	—	—		—			Employee transactions2	—	—		—
August 28, 2022 to October 1, 2022
May 28, 2023 to July 1, 2023								May 28, 2023 to July 1, 2023
Repurchase program1	Repurchase program1	—	—		—	$	62,267,634	Repurchase program1	—	—		—	$	19,748,066
Employee transactions2	Employee transactions2	1,031	$	16.56	—			Employee transactions2	203	$	20.26	—
October 2, 2022 to October 29, 2022
July 2, 2023 to July 29, 2023								July 2, 2023 to July 29, 2023
Repurchase program1	Repurchase program1	—	—		—	$	62,267,634	Repurchase program1	—	—		—	$	19,748,066
Employee transactions2	Employee transactions2	—	—		—			Employee transactions2	—	—		—
Total	Total							Total
Repurchase program1	Repurchase program1	—	—		—			Repurchase program1	—	—		—
Employee transactions2	Employee transactions2	1,031	$	16.56	—			Employee transactions2	203	$	20.26	—

Notes:

1During fiscal 2022, the Board of Directors terminated our previous 2012 $500 million share repurchase program (which had $47.8 million capacity remaining) and authorized a new $200 million share repurchase program. On March 14, 2022, the Board of Directors expanded the repurchase authorization by $100 million, leaving an available capacity of $249.0 million at that time.

On March 18, 2022, pursuant to existing stock repurchase authorizations, we entered into an accelerated share repurchase agreement (the “2022 ASR Contract”) with a financial institution (the ”2022 ASR Counterparty”) to repurchase an aggregate of $175.0 million of our common stock. Under the terms of the 2022 ASR Contract, we made a payment of $175.0 million and received an initial delivery of 3.3 million shares on March 21, 2022, representing approximately 40% ($70 million) of the total shares expected to be repurchased under the 2022 ASR Contract. The Company received a final settlement of an additional 5.2 million shares under the ASR on June 24, 2022. Refer to “Part I, Item 1. Financial Statements – Note 4 – Stockholders' Equity” for further information.

2Repurchases may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program and the program may be discontinued at any time, without prior notice.

2 ��Consists of shares surrendered to, or withheld by, us in satisfaction of employee tax withholding obligations that occur upon vesting of restricted stock awards granted under our 2004 Equity Incentive Plan, as amended.

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ITEM 5. Other Information.

Insider Trading Arrangements and Policies

During the three months ended July 29, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. Exhibits.


Exhibit Number						Description
3.1.						Restated Certificate of Incorporation of the Registrant (incorporated by reference ~~from~~to Exhibit 3.1 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (Registration No. 333-4419) filed July 30, 1996).
3.2.						Certificate of Amendment, dated June 24, 2021, to the Restated Certificate of Incorporation of Guess?, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 30, 2021).
3.3.						Fourth Amended and Restated Bylaws of the Registrant (incorporated by reference ~~from~~to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 30, 2021).
†31.1.						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
†31.2.						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
††32.1.						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
††32.2.						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
†101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
†101.SCH						XBRL Taxonomy Extension Schema Document
†101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
†101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
†101.LAB						XBRL Taxonomy Extension Label Linkbase Document
†101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
†104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)




†						Filed herewith
††						Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Guess?, Inc.

Date:	~~December 2, 2022~~August 31, 2023	By:	/s/ CARLOS ALBERINI
			Carlos Alberini
			Chief Executive Officer

Date:	~~December 2, 2022~~August 31, 2023	By:	/s/ ~~DENNIS SECOR~~MARKUS NEUBRAND
			~~Dennis Secor~~Markus Neubrand
			~~Interim~~ Chief Financial Officer
			(Principal Financial Officer)

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	Nine Months Ended Oct 29, 2022

Balance at January 29, 2022	$	(135,861)	$	7,280	$	(6,968)	$	(135,549)
Gains (losses) arising during the period	(37,686)		15,578		221		(21,887)
Reclassification to net earnings for gains realized	—		(6,191)		(13)		(6,204)
Net other comprehensive income (loss)	(37,686)		9,387		208		(28,091)
Balance at October 29, 2022	$	(173,547)	$	16,667	$	(6,760)	$	(163,640)


	Three Months Ended Oct 30, 2021

Balance at July 31, 2021	$	(113,728)	$	(602)	$	(9,598)	$	(123,928)

Gains (losses) arising during the period	(7,283)		2,701		48		(4,534)
Reclassification to net earnings for losses realized	—		1,185		77		1,262
Net other comprehensive income (loss)	(7,283)		3,886		125		(3,272)
Balance at October 30, 2021	$	(121,011)	$	3,284	$	(9,473)	$	(127,200)


	Nine Months Ended Oct 30, 2021

Balance at January 30, 2021	$	(105,970)	$	(4,876)	$	(9,829)	$	(120,675)

Gains (losses) arising during the period	(15,041)		5,725		125		(9,191)
Reclassification to net earnings for losses realized	—		2,435		231		2,666
Net other comprehensive income (loss)	(15,041)		8,160		356		(6,525)
Balance at October 30, 2021	$	(121,011)	$	3,284	$	(9,473)	$	(127,200)


	Oct 29, 2022		Jan 29, 2022
Liability component:
Principal	$	300,000	$	300,000
Unamortized debt discount1	—		(27,498)
Unamortized issuance costs	(1,269)		(1,907)
Net carrying amount	$	298,731	$	270,595

Equity component, net2	$	(759)	$	42,320



	Nine Months Ended Oct 29, 2022

Service cost	$	—	$	2,249	$	2,249
Interest cost	1,000		165		1,165
Expected return on plan assets	—		(203)		(203)
Net amortization of unrecognized prior service credit	—		(67)		(67)
Net amortization of actuarial losses	17		38		55
Net periodic defined benefit pension cost	$	1,017	$	2,182	$	3,199



	Nine Months Ended Oct 30, 2021

Service cost	$	—	$	2,364	$	2,364
Interest cost	866		56		922
Expected return on plan assets	—		(155)		(155)
Net amortization of unrecognized prior service credit	—		(50)		(50)
Net amortization of actuarial losses	61		256		317
Net periodic defined benefit pension cost	$	927	$	2,471	$	3,398


	Location of Gains Recognized in Earnings	Gains Recognized in Earnings
		Three Months Ended				Nine Months Ended
		Oct 29, 2022		Oct 30, 2021		Oct 29, 2022		Oct 30, 2021

Foreign exchange currency contracts	Other expense	$	1,153	$	360	$	4,294	$	916