GES - Earnings call transcript Q2 2025

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Operator

Good day, everyone, and welcome to the Guess? Second Quarter Fiscal 2025 Earnings Conference Call. I would now like to turn the call over to Fabrice Benarouche, Senior Vice President of Finance, Investor Relations and Chief Accounting Officer. Please go ahead.

Fabrice Benarouche

Thank you, operator. Good afternoon, everyone, and thank you for joining us today.

with Secor, Carlos Interim today Officer; Chief call Dennis and Chief the me Alberini, are Executive On Financial Officer.

the future capital current expectations Comments call, including actual results long-term today's company on materially making company's be During from differ reconciliations forward-looking or and the outlooks. comments measures The regarding and found risk reports plans, descriptions the allocation SEC. annual initiatives, adjusted these company's based filed non-GAAP certain GAAP may and strategic short- release and will will quarterly press statements, can reference factors today's included in and release. in of today's measures. also with be earnings

to Now I it will over Carlos. turn

Carlos Alberini

quarterly thank all for Fabrice, conference joining and you, Thank you fiscal for us call. XXXX our QX

want operating briefly transition. I I CFO our our on Before discuss touch to results,

Markus closer position CFO that As future has you with will his another the all in to bring Markus family. pursue us know, from stepped wish best opportunity down his him endeavors. Neubrand to his We

have to Switzerland. be a based permanent opened CFO Lugano, for in a We search

we wealth Markus extremely He teams While step Dennis well across Dennis that ongoing, have confidence before our is I this I great pleased that our experience of position. in role forward. and the the and am Officer works finance role interim Dennis into Secor a Chief move search brings as to with Financial held will joined. team very the company. entire

So with that, let operating review me our results.

in in U.S. dollars constant In $XXX currency in line our XX% overall, grew and the with quarter, we million. expectations. performed XX% Revenues reaching

growth. except segments, our Asia all revenue posted period, the During for

for years as business it now. Guess? performed European core well has been wholesale consistently several Our in

top in our drove delivering business U.S. Mexico. line growth and also wholesale Americas We increases the in strong

did to increase, In our able we into sales performance but our expectations. traffic our comp continues Guess? not while that comp AUR. stores, to Traffic our Americas business, delivered did in we sales with still were than be Retail declined. business, and In headwind European more higher offset our lower tough positive meet stronger experience we conversion our traffic and market the a retail

Asia declined our expectations. meet in and business did sales Similarly, our not

to Turning performance. our product

to continue genders the while best-performing Europe, footwear regions. momentum comps and were in with the positive in saw with our contributing accessories delivered and performance of categories In dresses different across consistent we while leading women's We tops outerwear positive category In decline knit sales. quarter, handbags. women's sneakers the levels both comps some for see in to strong both both denim declines apparel, and In genders. across our the Activewear first was men's businesses, our saw and Americas, and

delivering the Similar outperformed accessories apparel travel performing $XX revenue well, X% quarter our first period. to to licensing women's finally, a well, business both positive category performed And of footwear momentum for watches. increase mainly million, and best with accessories the with as in being the

expectations contributing It's customers business were progressing. Turning are new that are ordering performed solid results of categories is ], activity. product demand contributing is in business to growth quarter, a performance by experienced delivered how which note higher business the of multiple strong from with line how our sellout with the these These the pleased the the to [ wholesale platform in a the business, extremely the our assimilation driven customers. key rewarding of great experiencing Overall, highly Ragamon above and good to for company expectations. we onto and

very been months and It's only expectations. completed already. well teams below acquisition, the slightly X performed since business but the our we smoothly, working transition is direct-to-consumer The going are together

invested our growth. significantly the SG&A. company objectives to In quarter, total long-term to we drive support to Turning

in investing brand bone towards directed across SG&A build our more for adjusted than of That XX% to increased whole our spending stronger that was about includes investments company and increase growth marketing the awareness doubling our & entire advertising we rag our growth and year-over-year, While initiatives. portfolio.

an earnings margin operating of of share we X.X%, range outside $X.XX. In $XX the the of quarter, operating and of delivered we our profit per expectations, just million delivered adjusted adjusted and adjusted of

All remarkable We are customer the operating know, a where been as in clearly teams and doing as result selective have dynamic is costs considered, the a that few more increased Also, me what optimize we brings our our job board price have controllable, to environment and have all and will half inflationary our expect years, inventories margins to year. business the environment the continue sensitive and softer to of across through control grow seeing operating updated a during of that the very to consumer promotions. outlook factors. our last we to and which we results, second is the including reflect costs, are

exceed And you we to $X between per our expect adjusted and take earnings in more revised expect in $X.XX although through and for will minutes. Dennis year billion X.X% XX%. the still in share have now detail few to We year, between a revenue outlook growth expectations now $X.XX. revenues be our this we just

and objectives. we guidance for I It's spoke the we number On expanded how footprint, supply our global a have company that Even our year, a extensive against since decades a brothers updated a we important strategic of more channel broad brand. and make operational, portfolio. progress his diverse a platform. we business In have about the last than is Paul wide and and chains the continue capabilities, Guess?, as X-plus to founded created category built financial X call, have just

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about the are of as committed our I vision. our inflection ] opportunities a fully entire investment and this is all to year am very lie team point, before and vision. that we the us, [ on to execute This who Paul are transition excited year as begin

second the So accelerated the together path let we rag specifically me working key that Guess? will making on at company progress touch share growth. & initiatives are put the how our bone, to on to are the I our quarter's our accomplishments network plan, jeans strategic overall launch, our objectives. activity and logistics new and capital will from structure. quarter our long-term how support the strategy, organizational development I our our review marketing our

short begin X ago, completed bone. been rag with me and just smoothly, Global We Let going WHP transition as with has mentioned acquisition months & I earlier. this the a

and Our Andrew teams are led working Rosen Paul. by seamlessly together

us our U.K. the marketing already like rag in platform's expanding except markets, this will enable to investments in In mainly quarter, that recognized brand. the we amazing capabilities realize is yet have brand the potential & began begun full We in markets Europe, where new leveraging U.S., of also bone existing fully our not the the second but

in multiple have for open new cities important and looking beyond. begun We to stores Europe in locations

market. introduction new for an consumers in signed of an in a brand that in we that to will location great store the Amsterdam a agreement fact, already incredible In be

licensee the partners represent other leveraging to to rag America, brand bone expand with partners In new are Mexico, discussions Europe, and addition product Latin Middle markets, we to the brand. teams relationships & with East to and potential and bring our also categories Paul in brand's offering our including in more the Australia. are

We have with bone reached with of X an and enable our to offering come. more increase rag & us partners that agreement will to enhance handbag

with with efficiencies are by Shmidman [ team other combined the drive explore for rag take and and led to We bone management his are Andrew leverage sourcing vendor the working Yehuda and teams ] advantage now products business. our of product team also and WHP & into our to development our volumes relationships, territories. And licenses closely working

of a opportunity so So much us. time done of in such much more in period with front short

we Jeans, and a Guess? another see drive as is to important very opportunity which Next customer category. address growth

hosted store again And in we to with targets customers. to and impressions beautiful a garnered leadership, its the showed build Nicolai. collection led Milan, market our billions men. casual have with that we customers larger its overall and design for we weekend presented also an new As successful is audience brand in Since at and an a assortment multi-category of under a where brought event twice as but line concept, women brand younger select and The price lifestyle June. Guess? Jeans and architecture all a launching welcoming employs Coachela the brand Gen new points, event a in Nicolai much January by you pricing first brand [indiscernible], this millions group compelling and the identity in quarter, Marciano to a Z well offering extremely completely know, again incremental own to Jeans customer, within of views. The and Guess? of fits to the it business.

European wholesale Our first off this believe do strong Guess? other Jeans X locations great introducing X will Amsterdam, consumer. new to both ahead business terrific of start. job the we orders that X a brand expectations and Berlin, And stores, the to in is our opened well in have sales new the campaign delivered we a

Consumers in customer manage social Turning and to few in to and more media are has becoming the evolved their engagement the last disposable marketing. world how years. selective of income tremendously

to to enhance work, benchmarked have we investments conduct well as in our space. we our brands to believe we of to external our social to engagement are From As our customer to are center and in to support a we that year, them listening and media, differently do, our incremental marketing existing have designed partner to to putting This and challenging an we CRM all and website. organizational investments as review, that our engaged collaborations, improved there drive marketing better more at with capabilities opportunities many connect our brand companies to customers, against result, ensure a that ourselves those customers everything -- customer the other our stores we come. are to make and traffic

begun already investment. this have We

last than higher in of we second investments I the marketing than earlier, year the to invest the doubled plan half to continue we well. at year levels quarter, our As and shared in more as second

these will deliver investments don't near margin as operating immediate in returns. You term they necessarily see our

grow building larger However, to is our our brands. critical capabilities and and a platform brand core into of support these portfolio

have our see with in company the but brand XXXX, organizational it global more to opportunity limited we whole multiple for portfolio. team run being our a a made ability capabilities returned but entire time, company was with significant the business to structure, additional to of autonomy. support in saw broader I add fit refinements We the better I strides reinventing our for efficiency. At That increase When for regional the brand full and to purpose the at company. an to globalize operating consistency leverage and our Paul time, functions was opportunity

vision, the level. We consolidate line you migrating roof structure, to years began under this many global process all for one provides X local more As and be to and related X services able in sourcing we over development decision-making were a to like functions last and maintains global to design, regions product based categories of critical that product the the know, that on pleased to launch Switzerland. few market at multiple

at intellectual our in to management, moved IT, are and of finance, just inventory few. various legal, We property name logistics other to like globalizing licensing, stages Switzerland and functions marketing also completion a

onto design continue organizational brands to other and As we platform, and this as time enhance to our is bring optimize we opportune decision-making. our an improve it accountability work

part and our Officer will Chief have continue with CFO regional as Officer, for Chief As leadership global and provide of at positions in to decision-making we this, Digital addition to search. to searches level out the such strengthen our we roles these Commercial

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in leverage are drive quarter, important even deploy second our GXO addition, which combined And to we the the Europe in contract our freeing extending up better U.S. we to we expect In facility, more volumes capital, to economics. strategically. sold

will As we prudent always plans, disciplined stewardship shareholders' we future, capital. be the to of as look execute in we our our our

We we may of at under to any over capital, we that the investment years, emerge also the and the convertible until $XXX million favorable very we maturities during did take including our that and with bonds flexibility and that few ensure are want have potential advantage to right when terms. help recognize last access for operating have ample we this XXXX, extending To opportunities they themselves. present support acquisitions opportunities, to time, refinanced

in will support with facility business. for credit continued million moment. month, our And a recently this we accommodate expansion the these expanded vision about of Dennis the U.S. the in more million Europe. & $XX to by a we share last EUR of addition completed capital of to also the to additional But our access bone credit rag our growth business. have We XXX facility actions,

want Before and culture to our of how Dennis to ability our couple see the Guess? I regarding continue grow years come. at I for you to driving and to a many I for with call pass to remarks, his succeed as that thoughts leave

that the Officer our At on I The goes DNA adapted time, capitalized succeeded a that the has year today and founders, grew that of and U.S. strong President million, and has as it As annual company. capacity brand to sales back when at relentlessly company market an Operating the through the failed. my Chief you And had XXXX. organization. then, of is others retail it believe a time our as permeated in to changes started know, of $XXX with and I Since many sales of lifestyle adapt this $X.X company has billion with when was Guess? positioning while value. strongly it international whole to primarily expansion core started Guess? business.

long-term. just on wake our quarter. decisions adapt, continues We and don't we have are We every based on As inspired products customers our amazing to a to morning on an team mission our make together. delight with up experience. the next We extraordinary eyes the

We focus our so it to extraordinary business be next this all you culture everyone. makes to find generation. something to adapt day blend grow with when years special that returns. profitability for To right central in and don't the powerful or of so you when on be But culture, come. part and unique that of what mission every it you company can to the to are We the focused do, to want people our so people and and want relentless and our reward and on ability with our shareholders are me, a

I'm unique. I why have we in relationships company. this such not explains think long-standing that

Paul, most tremendous including a our have all done challenging and thrilled and our been have the who ability couldn't & throughout tenure our we thank to entire focus team, share licensees. adapt. leaders, Andrew well environment. time our We of through to I more And bone a and again in the be those time welcomed organization for Paul job promoted have on on teams and mission our who rag team, same

of appreciate and excited you members what extends I front we lies accomplished couldn't bone We worldwide, be and the all rag about are you. everyone's more of of together contributions. all in how us. team. more we thank have associates Thank positioned to Our including proud what new our & greatly the

it with And to please go Dennis. I that, ahead. Dennis, pass

Dennis Secor

future. help Carlos, step the you, the in you, Thank both to and My your Board to near into afternoon, in CFO now back on the to new transition, and the good for bring everyone. as and interim thanks pleased I'm role a confidence. company a Carlos, CFO smooth and support we

end let's first include Rag & segments. the of existing those have of so Rag just we towards quarter our acquired quarter business. our integrated been into of second the and this results a & now quarter a talk Bone Bone full So about And results our operations, reminder, year,

quarter to on the now second So results.

In our reaching declines sales increased Asia the QX offsetting Americas As the European where for with XX% dollar Constant dollars, for & and Overall, revenue with achieved million. our XX%. grew and growth revenues in of in and growth Carlos our addition the mentioned, aligned revenues U.S. constant Rag $XXX the was business both in businesses, primarily expectations Bone, wholesale that revenues dollars, driven Americas core quarter. grew constant modestly Guess? businesses. dollar Marciano our by Retail we

In in X% Retail Revenues grew grew e-com, X% Europe, comps, reaching we U.S. dollar X%, in by and revenues in $XXX constant million. including currency. currency. U.S. constant X% increased dollars

few in a quarters, As Turkey's the meaningful impact those on hyperinflation past had comps.

we that would constant X%. increase In been have currency our X%. delivered stores, constant of comp Turkey, increase comp a dollar Excluding

While we from a conversion and performance AUR and than driven by customer ago, experience. year improved softer a and better growth replenishment benefited did our experience traffic higher assortments

constant improved a Our comp increase. sequentially business X% e-com with currency

the business Sea wholesale caused assumed had third by well, fact, expected quarter. strongly the deliveries We continues the quarter given more for the that to shipping had than would Our European we some crisis. Red current perform slip in challenges into

mid-single currency our still managed wholesale well good revenues support there of mitigated sales in However, welcomed delays, in our while has Wholesale increased momentum partners some risk. their team to digits constant the as product pockets and are that our businesses. in

basis given year points XXX European and further lower margin ago, The operating operating expenses our investments. X.X%, higher than was marketing in business a

growth was Rag revenues from million. Retail, more segment's the reaching Americas of our headwinds constant & growth stores. drove coming for Bone The In and offset grew addition X%. X%, the quarter the the dollars, than the $XXX In Guess?

challenging persisted. headwinds constant retail e-com traffic in our an conversion was decline comp Those business, traffic decline headwinds, coupled Americas resulted currency QX. operating an our in decrease Retail XX%. a the from core last America year's Our margin, comp including X.X% in North XX% X-point in about overall posted stores, business as remained decline also with that

the our the While product quarter, decline impact the drove in decline. operating improved comp on of expense the margin margins core business unfavorable base

X% U.S. driven both in addition U.S. in X% shipments & XX% and was China Bone. Operating of comps points by million, in and Bone the for Mexico. Rag new constant Bone, lower India X increased million, & about Asia Revenue in basis mainly the dollars our business year's in region, In XXX X.X%. XX% in last by revenues than in of $XX the negative e-com XX%. headwinds. with including margin constant comps, Asia, was a and Retail from dollars U.S. decreased more currency. revenues by Wholesale, to driven and Americas currency dollars the higher increase Growth along $XX to currency. lower Operating addition Rag XX.X%, offset & down points In and retail margin Rag by Korea were reached decreased QX, in than especially constant in

currency. was with and both Licensing X% And performed XX.X%. U.S. increasing margin segment finally, constant our in revenues well Segment operating dollars

Adjusted increasing up investments, quarter slightly occupancy increased and company total and partially exposure advertising basis offset awareness building earlier, for XX% and SG&A for margin million. expenses stepping Rag from comes & Bone increases $XXX QX, rent growth by to a IMUs. of improvements XX.X%, XX% mainly Jeans. To point, Guess? In in including higher higher adding markdowns, reiterate this our marketing for brand our Guess? store the points Carlos' expenses driven by below reached gross XX from year

also primarily expenses Infrastructure Europe. in increased

Two Bone, the adjusted we nonoperating rate quarter, to along Adjusted X.X SG&A marketing, hedge. other expenses. in In $X.XX of loss convertible remeasurements the declined activities, the of associated quarter, QX by acquisition XX.X%. loss with occupancy In related points adjusted recorded For Rag and compared In we to earnings reported investments to year's the noncash a the store our share unrealized net with rate quarter, items tax & adjusted per of XX.X%. second of X.X%, quarter, million significance. notes operating our a related derivatives higher points $XX within in driven margin our effective operating and quarter. an due our diluted increased to X.X last of was to $X.XX

We increase gain an properties. million income our operating distribution sale also to recorded $XX on U.S. as of a center the

adjusted We given results and understanding have normal commercial better excluded reported, nature operations. order a to both I their of both of our these atypical amounts size in the just facilitate from

the to now balance sheet. Moving

the acquisition the inventories they Our and $XXX the primarily of quarter, our growth in align additional X% inventory ago, Bone. with of relates end a were for expectations million & from to at up well The Rag year the business.

to manage good and ability We our of to our and composition feel inventory our business. inventory the continue service about well our

X first was year, openings and of and CapEx the the months technology. by driven For roughly remodels mainly store in investments million, $XX

In our the $XXX million in quarter, we shareholders repurchased with as a additional of ago. to $XX ended the $XXX year compared We cash to quarter million also million shares. returned we own our capital

realized the Over of generated we've free million sale X cash US and $XXX DC. $XX our of flow last the from million quarters,

announced & million quarter $XXX of invested our million with acquire paid shares. have million global more $XX $XX of than Bone month. Rag dividends, million various we million to our borrowing the repurchased $XXX European on This credit EUR also liquidity. ended and our the $XXX liquidity We last so in of XXX We facility that million includes capacity available of facilities, expansion

secured expansion We Europe that to enhancing importance our are reflects confidence have The lenders' very company. capacity, additional capital. strategy to our in of pleased and our our long-term the access to

businesses some the spending habits. greater we and in That remainder factors In in these we than in stores I'll of summarize lower and who year. leading to of second conversion comp in with the factors quarter. affected headwinds have appears discretionary softness those in quarter how to want the this be a sales outlook their to estimate shortfall consumer of the traffic experienced manifested had million we our more is global our between We first trends. million encountered sales quarter, I a $XX net lower-than-expected in outlook, key to our to $XX move the and I what As expected. being many start that second the during for second our impact itself prudent result

reduced have revenue both expectations and similar quarters our We retail fourth for third magnitude. a the in

our Next, related wholesale, to appears European be the to outperforming business market.

allocate While operate we shipping share boxes those 'XX as what wholesale our nearly believe, accounts of to same we and our more book, certainly planned. begin reliable as year, sell-throughs reflected accounts, buys have stores, now into spring/summer spring/summer retail That by the the expected those compared these the visibility as of gaining with order initially book XX% is wholesale in Based is better far, outlook. in in our for brands, have have we environment roughly on ticked for grow good those we our we to we expect consumer to seen had our which stronger than have that of last them. best all few fourth thus product We we We and are years order customers stronger with complete. 'XX, expectations quarter brands that their assortments this will higher their deliveries. more among

Based modest exchange growth remain we in XX% rates quarter with the outlook, outlook expectations expect they versus we result full those our in provided and factors dollar our us, compared line in key roughly remainder now, both the currencies XX.X% euro. Since currencies. on a If XX.X% to we've last a it year. of should against prior to year, our increase for for X.X% in in the has prior weakened last these operating most and are some now into our revenues quarters that of the Finally, fourth and revenue our and third where year tailwind between compared incorporated importantly expectations. U.S.

the to third quarter. Turning

the compared year. expect Rag continue & benefit of last We to to Bone to from inclusion revenues

quarter the for Guess? still core historically is quarter and the However, for our revenue Bone. been that business Rag while case has not fourth the is, & largest

business, from product of our their Given is benefit to as highest as larger their this business wholesale holiday terms of product deliveries of third channels are category. in shared, Americas the season. internalization partner in the fully their quarter the to previously Also, into the get most wholesale expect mix third in quarter the that important we in for delivery outerwear quarter revenues for

Finally, the XX.X%, a third factors the mentioned as revenue on these turn be a currencies somewhat benefit Europe earlier, orders quarter extra quarter. quarter, accelerate revenue the fourth the we quarter to expect and Based somewhat, our I in the year's with we moderate tailwind offsetting from the the into rate into should from spring/summer rate those because growth the third third then stronger QX moving increase to XX.X% from revenue to to second third, quarter, we headwind from last of week down & wholesale. second fourth the expect in growth and sequential to factors, quarter that given expect to the Rag in Bone step seasonality between

continuing ensure an incremental freight Ocean in this also headwind we year given for Sea that accelerated deliveries. of will next gross crisis. move product will now anticipate rates ocean to costs additional now and challenges margin, again the be QX, by half second freight the shipping Red air more we the freight charges. I'll necessitate expect to freight using where incur challenges expensive Capacity we caused will

third. in we continue to operating and that the We ease, cost data will rates to third additional fourth million back Some have profit estimate the that so carefully. both quarters, the monitor the and in begun affecting more suggests recent that total very half though will roughly $XX

lower and can year, to our our help to where teams Lastly, their mitigate revenues plans for impact the areas identified the gone spending the expenses. expectations for have of back we tighten

the and roughly be expectations. reduced that our the brand awareness. marketing plan reduction have Overall, efforts to important compensation Performance-based our our lower given protected we our however, should in also spending $XX make earnings investments have, We by of intend million. than prior expectations

expect per between now and $X.XX operating we and in and margin year, the adjusted For between the earnings full $X.XX. X.X% share range adjusted X.X%

range and expect earnings the X.X%, and between For operating $X.XX range the $X.XX. quarter, margin we adjusted adjusted the third share and in per in of X.X%

some share earnings half me this additional of second Let insight year. flow on the for of the

quarter our quarter. quarter where it While growth our drive the in drivers significant be X third we anticipate There line this will revenue third to affecting quarter strongest year, have the margins growth. be we the the bottom that fourth for are opportunity will

will absorb I we the that freight the discussed so third affect increase the the And charges quarter First, second, the expect earlier quarter third greatest additional fourth. investments. more should than marketing in

the operated year to older we we a with some inventories. last As greater markdowns of cleared as our in of level quarter, Europe, fourth wholesale

operating also businesses traffic. In European currencies in North America, quarter quarter fourth than expected and ago. favorable with are more fourth we We're a of fewer were than compared last our plan to year, given be similarly, operate stronger to a much IMU this to this expectations year markdowns they our year last year with

based fourth now, So to for deliver meaningful overall expect we on plans gross our expansion. the quarter margin then

expenses. we've with also we levels can operate in operating areas lower our identified where of North addition, In America stores

reasons. the This year free X million. had is $XXX cash than previously free lower we to flow flow. We for now of for Turning expected cash about expect

First, as freight year. that constrained, to That shipping will our deliveries. in resulted we capacity and absorb our began protect we costs become the additional quickly to ensure this acted business

resulting just receipts also we in clear, more ordering earlier. an of million. we've increase roughly To accelerated be in some expected not are inventory that, $XX Beyond

supply reliable One that was chain of place that the key deliveries. value partners the an on crisis enormous our followed learnings during COVID

partners. believe and our short-term, has gain protect among partners' As to European capital businesses. It's I earlier, a reliability important wholesale investment we our but allowed our to working share us shared ours

to driven the retail essentially revenue our making Lastly, are flows. we're by immediately on our businesses, businesses, cash that will adjustments our that impact are outlook which primarily so cash

the up So questions. Operator? that, remarks prepared and end your with we'll to our open call

Operator

And Telsey Instructions] Telsey question Dana [Operator Group. of coming first from be today will our Advisory

Dana Telsey

their performance, brand, different or given each it? difference as there. last the and and that think terms little how in freight of unpack Guess? bit to the the year lot And percentage unpacking globally similar a and what of and Dennis, for between QX a how So you're Bone marketing, Rag much cadence this the year a talked of brand customer? & that is versus you you're brand about you Carlos, seeing QX are about trends

Carlos Alberini

Thank for your you questions.

Guess? start were consumer. with the very, is it me consumer, -- Guess?. first affluent Bone a of very, And different. -- about the Global. Obviously, the also in is your opportunity we very one are about a Bone why Bone and have that distribution with we we to and complementary brands, let Rag So having And this not strong so reasons more big excited these that acquire Rag marketplace & has geographically & question with I very much different mean WHP the Rag & the we position at caters to that's customer and very

many and that and customer expanding for So so Guess? that has of with -- excited positioning, enormous focused Paul reasons just extend of on that lot strong we the cities in very that are grow one into reason, business distribution Europe, present multiple international European a for this well. an brands very been markets to example, the & be think that we no we can very invested as also -- is has opportunity Rag of has opportunities the for the the almost the in into marketing markets. is were distribution where And already this [indiscernible] brand distribution why the distribution. And but by Bone a the markets to and about

is customers. that this men's, categories are another as a are we They have X also but is And brands, doing of we completely we at men's a strong a business that think it's very for product is what are there lifestyle, women's, in and both idea differences think very, represented our those as for different too that the brand. well. women's the fact catering I fully feel business love very we positioning the which that yet this in in Guess?. and is that the not catalyst big a one growth And here the the complements strong X significant of to assortment

we increase has heard handbags bit and working together talked the some a prepared sure to for is The one these teams little very the on list mind big the working of handbags my line about add X secured are to And of licenses of I'm of remarks, opportunities top first already that the are hardly we you in to products. and assortment very those been the and So whole really brand. finding comes very, strengthen activity. for on

jump can Dennis, stop let you question. there. So maybe Dana's on me

Dennis Secor

Dana. sure. Yes, Thanks,

point of as expand that known as us in build that brands make that of an view as that some company, world. where this there well that prepared remarks those we're as yet transition Carlos to and to those new the we've additional you, to suggests investments brand around and investments, shared for brand the benchmarking a Guess? the awareness the said in awareness markets for opportunities So we where we for some with well our the the inflection year making for aren't we study did new are done brands his

really looked general expense for because investments year. because So quarter those second quarter. more really our that spend those but we're rest protected that the in the reductions, what earlier thinking in the in We some the year the see full the we're said challenges perspective in should opportunities at through that we've in -- went of investments we behind of some we year. the we the getting believe we for think way second We doubled as than same about them. marketing And is the you about of as you

-- the dollar as said flow the earlier, quarter, the largest be The we way they in third increase. should quarter-to-quarter

that that, margins. investment margins for the on the quarter, the We're be base go but year. the we will quarter, invest you'll third, as in So the as quite still of more the the size planning because not to much in the impact fourth see just of simply impact on the less But impactful fourth full third on that additional will the than expect revenue quarter. in

Operator

for will of day And the the next Jefferies. Corey from be coming Tarlowe question

Corey Tarlowe

we wondering in Carlos, turn us you business, if trends might I do see the Americas for geography down that a and on geography? that anticipate by when break was you -- could

Carlos Alberini

so Canada. you retail, started bit experiencing this -- your have trends Well, -- trends different North have of have that for for one now to a that U.S. question. and challenging has the is little biggest lowered trend and The performance into of been incorporated And continues business, and have to second a the just with we business the customer challenging. extended this remaining we as our the challenges in this us, been half. for and this with slower has thank a the for Starting the been expectations first, our -- the of now into Americas quarter, quarters. continuation be of kind retail and in we of it traffic why this America Corey, it's have reasons year, a few thoughts

like things some impacted and retail The able metrics traffic can not upon conversion, our other this. we with focusing sales, -- we all would that have average really improve on been and has of expect in of KPI the we working that and weakness to to are control the offset or any that you

looking product is big in some One things we course, are very trying is are capitalize trends silhouettes to focused assortment, of that see the at area denim of we're we that changes an on. that We the on.

extended, there could the products. we the patterns. happening it. how We are summer strengthen summer opportunities And and that's on, weather that we trying are assortment our the We we to saw transitional with improve think really looking that at or we capitalize that looking at what's have weather and months has some

or different a initiatives. the lot is sensitive frankly, what see tried more And have we We tactics that promotional customer is to price.

a are but not some business. disciplined And we inventories are buying the the very discipline we into doing very, to with in the very see way been We really our this competitors running way are of we this, been that going discounting. have we trying and heavy have careful in keep

this So promoting. continue full-priced are we something a constantly the that will brand see to customer brand as opposed to as

have One comments been study a do is an that probably we the customers. can we spoke and remarks, our is big conducting engagement marketing level partner. really to with we our in and things I had with brand there few of increase about that this more that that the Dennis And about of is see external about what prepared

see that. developing that -- company at the level that's strategy when spending to of -- incurred do our to others our we we an we and in marketing make that and that at investments marketing have and many we and are in what We looked compared looking opportunity are investing a would in deeper industry,

are investments in and we CRM our increasing social engagement of community programs. investing So customers in a media, at looking incremental more collaborations, creating

we lot have we bring. overall, excited about So a ideas, of are what can and this

very the The just in about situation I for that You asked is me Europe. different geographies. described America different

We big. -- AUR increase significant saw same-store conversion to rates. better have traffic of in now bit more think function that, in we lot and think a We in of and geopolitically is looking multiple we happening several is were And happening that were a habits time Europe for are And and in how a and positive what's they slow growth a a the the the think this with that their spending is sales numbers little but is the disposable is impacting than as offset had points. that how able definitely marketplace. more that we customer that. in quite well. there at We some and customer in income weakness quarters, offset that

the been because product is We has activities assortment, that spending I in This think, feel new. not people we But also positioned that is something the know so more very very well strong. forth. are and and

than more to store able really trends those been strong offset comp and deliver sales. have We

in these also has -- our in sizable have been to And adding our business, business, which of and think the wholesale of that piece increase business product They business are are plannable. very a line, And done mentioned share really very we of just businesses, that, invest now able are And exist. can think that I not is with result X customers good wholesale a the that our on representative deliver that very as for to we a service see they a that the very to brands Dennis We be that really to X terms have this did reliable. even new Europe. just customers. or of on Brands our newness time able example, part that, been that those a big I effectively. we of ago, doing of in athleisure is want job. lot as top think company in years business And

So also all business. that driving is for the growth

XX% is for now have, that adding and is did that Guess? spring/summer growth, brand is spoke didn't exist, example Jeans. good our wholesale the Dennis to about XXXX. business a that that we category This Another not

but the to a market So the the we type consumer can well take of having is opposed advantage think And a as product more late. bigger an that rely challenging definitely we think take weakness others or on that delivering going positioned more are really they to base. slice overall are result, of are consumer a through of growth to are They of some are having discerning, period. we prudent. we very that some They more as

consumer of respect not Asia, And in in state we but we to are been that challenging. we think the this, continue product. alone to our on With work that the has improving

weakness some China, Just if had you second think quarter. in we about places the like

with working there are a to third help us. party We

lot then we a times more marketing. in Korea. change We and challenging had with be to China, And the a localized lot direction. And same we thing product assortment the are doing outside are [indiscernible] the some product doing with

business there. and is recover of year that only expect that, to business And We have good think throughout rest there. profitable a us. It's the big a the we for very temporary. We business a

Operator

Consumer be Cap Research. will from question Small of coming Beder next Our Instructions] [Operator Eric

Eric Beder

little of it, doing potential parts. for planning We here the it's about of you're looking either or here. some want wholesale, of where short a retail a bit step margin-wise, a in in of I There's lot bit. lot look a longer at But function for future is this [indiscernible] we a goals moving as returns? start this should pull the from really us lot I terms for you're obvious things future, the investments be thinking here the lot through. can back to a talk the to What year, a term. the little about that from these at understanding if help It's term of potential

Carlos Alberini

I'll Thank Eric. start, Yes. will I'm you, have Dennis sure and things [indiscernible].

a picture really We looking Just excited working consider the transformation Bone, brand as couldn't [indiscernible] and entire company. points we strategic into are taking how on and the Rag that to And the a more opportunities our we we're something that super and which things there new portfolio. the This top-notch, are about with more and platform this We is doing have that excited and this year a team, the now best-in-class see. try because that And of right big as team. a point with is focus and going team out. the first we're we it's Andrew time time we year and welcome the we are itself year investment, this at really to first of be receive transformation and & like never brand a the it's done. you just it's expanded it of about

used the very lot -- brand going be large it that potential, to grow and about And lot business. that and that a fast has So that we be we it become of can but can think we're business, what also platform are think a in have we pace, super a capabilities and of excited that, optimize to we at company that's in a can the for. really that

different looking to a so the fits add that will all to -- for So characteristics our it brand be we portfolio.

to lot that in happen. Now needs do order to there's that, a

to internationally distribution plant the brand seeds Just because or primarily for is there. one you big awareness the those of except things just not have U.K., Europe, having in

and in also to invest stores. to experience for and so stands is think the consumer doing we have And that what for that, for it. have open And we are brand to realize we it really what we what and the marketing, but

collection for they it. experience those available some have territory to to line the -- reach. and -- the are to us it happening, those in We are players to take for going but And see all the things make different time

to of even Then nice penetration, wholesale in a we -- and well, we very quarter. business, even has opportunity it domestically. presence a domestic increase full-price the in that also, a division, that great chain second because see look at off-price -- And had the -- during at in you of doing business company even we stores the stores lot is what the just

going that locations are well. And time. going to take that take we time. business is but as for -- So is looking e-commerce again, Growing for to our

going what trying there. doing time. very we are business, to it's We have to are but perfect take a They meaningful

Amsterdam, we also X requires significant and to look moving that, And as in new -- basically feel to consumer. visibility well. this in a Jeans, something our and take it's stores, looks to able and Berlin that is X that on part going Guess? then X and marketing this be is do you to brand. to time younger brand, new back more that -- but strength trying is some happened. we are at denim, key DNA, to This This investments, our has We cater but a doing with of a opened that are just to it's we especially

to in we us that it's incredible L.A., locations location, going X a to to other store. an some some build have here take are We open, time but going

going Japan. We are also open in in X Tokyo location to

that looking that product. We see at. to others and are just that has understand the customer But and the have several we experience

path. we in the Guess? it's Jeans feel there, initial in with are expectations. We initial that we right early, is process. we ongoing but course, are product be brand to something an And on improve continue to going is especially that This of the happy assortment. having the the REIT introduction of with the have our wholesale, we And we and exceeded are that Europe

again, Then the more investment. we a you look that at things that talking about. all mentioned, I'm But opportunities I the company as is other this marketing see

to of of I in to lines we take Chief additional And that and accountability. improve investment today. Digital I Officer. decision-making really with Chief ways looking other are Commercial terms some this searches We is at mentioned our are mentioned talent. going think actively very And Officer. We involved several

we Lugano, Resources Head are for looking Human also of position a Switzerland We have in for. that

looking Officer. strong for opportunities Now we with Markus to are that Chief us for leaving, And we in. these a are Financial big talent all bring permanent think

about Dennis, little just I'll there. bit want So stop a to do capital? talk you

Dennis Secor

Yes.

support everything strong a if that just I think a I it I Carlos said. balance And lens, look at financial we sheet. through very have

and for capital flows is sure vision structure important us prepared that support that. very generated have the ready is We make and strong to for that cash longer-term to

over EUR our the the are in refinanced Those million into last we essentially couple expanded years, credit been U.S. majority facility Rag another converts. & Europe have Bone. vast now accommodate XXXX. XXXX just expanded of So capacity. We the add now our pushed XXX additional We to to

million that of earlier, the sure don't have $XXX ready Opportunities business. are support we in a predictable way, to call, the want liquidity. on heard always this make you available but we for to we themselves So growth present

Operator

of UBS. next our And Mauricio Serna from will question coming be

Mauricio Serna Vega

Could the more cost on just wanted like if & related idea you get Guess, like curious versus impact give just to and Guess? in details on you an a was brands? to higher saw us Bone see operating structure? SG&A the margin margin that business. margins Just details to Marciano profile Rag more or the gross like some gross

I your be more but regions about be guess I seeing the talked but business in I down. performing you're And [indiscernible] like then I details maybe would what about the -- on would wholesale you before, because, well, Europe. hear curious just is see consumer to across hear of key very slowing know to good some the it is

also So dynamics I there what's that? behind to just understand want the

Carlos Alberini

-- respect numbers or Carlos. Yes, & things I in that. giving to are Rag position with Mauricio. we Bone, Thank different like start It's not a to margin you.

if higher very appreciate just model the significantly margins you significantly But giving have just appropriately. healthy. can as we the business and that, you are course, here much promoting very are I you and these can, the tell in and can as you also can business color than the of the disciplined Guess? portfolio, prices seasonality been with in so appealing then and -- have And not has company brand which ever, what XX is because We this we so business are something find that the is business the never they over has just been the been been careful to a was those in a have very brand to they discount now even have we And customer, years. in just for presented and over they significantly. been brand never position how years, really position always difficult

businesses So distribution just many in And those we customer the both improve that from benefit big that this I to multichannel. is we our these advantage very and really use case, sees to has as brand can are that synergistic, businesses. thing a and because here very a one versa. the think vice similar what is pristine learned we because the to see as that great today, Guess?, a offering. is optimizing as interesting very also retail In that business we brand as The cases, beneficial at think are that wholesale we,

the of then I deceleration. if the a that, of We happening which don't with what yes, just see question, this know patterns little your a Europe. -- mentioned bit was what's is a to we is did in with European weather respect more just And exactly second consumer, function

still would just selling. we hot Just summer same so with the would prior in product Europe. that the period just the not after that this extended, throughout that was intensity weeks And the of you start they clearance were as product, weather new full expect saw years that where got happen level did several because the

this the consumer a weather on there So those for trends were that or is -- being shopping our focused if more intensely us during really categories function function know as a for were exactly time. of our in difficult of not to if

I'm the those patterns looking conducive changing patterns. be are at the February for we that playing in extended seasons in to and of more fabrications are And we months. more looking as collections are really months really frame, like Just think will the and some frame and especially we time case to changing, July June, weather transitional weather January, time at, that reason, in those those that make summer transitional winter with seasons

because behaves area is very North. to respect multiple a challenging same-store in we There as In way. have -- we not one strong with a that are seen to see Just markets course, patterns southern we big in behaving business Turkey, it's that is European there very homogeneous that differently. trends. very And this we of region, very the sales thing continue are versus growth opportunity just generalize the consumer. it's example, difficult for feel just But And have in countries there. to a to the region we different here to European deliver -- to very the continue

of Sea some delivery slowness that impacted in saw was crisis. Red the especially issues on products. We the One us, with the that conversion of

of product to days. coming delay there X product depending chains on rate. a have end time. that because didn't second impacted towards that, we China, and the the But from back is seen And think case. conversion cases, lot get coming we everything just the of about on weeks that a that in And general, and happening our disrupted, COVID many negatively of what that we the we have Just the we in the those in we exactly experienced the that in were time, quarter, saw is -- of was similar Europe that supply like to

protect one the the sure airfreight, also decision reasons just retail a of our cases, that's to business, in business. an [indiscernible] but in freight we wholesale strategic really So for increase year. to the invest where just remaining that for we of made make saw business you our And the both in some

protect that trade the rates can faster, of we higher, that then is the business. so choosing alternative product are is methods are reasons reason the to another we One but bring

Mauricio Serna Vega

Got it. Very helpful.

follow-up. quick one Just

mentioned to Retail. initiatives are that some you Could reduce in that expense also better about looking have margin the the maybe for in into division? talk a ways like to of you're just that Americas you looking You operating

Carlos Alberini

here experienced, the you're Yes. the been have has you I'll just just it's issue start the are with nature just stores, contraction a But when lot and very Dennis, that you -- follow running just fixed. that biggest costs line we can jump to really in at of have and in. negative it like -- difficult comps the the top of

in very But numbers, with there stores really pricing, which variable margin that. margin just is looking very, occupancy, the like supplies little where in anything look for in is protect or There that's is other we like that are within protecting So some very contract other is that you really at than area careful are the variable, example. when doing. can costs we could you to the every trying what of can then gross you some do payroll cost business. be to do are little at variable the profitability are there costs of that, doing we a very And we that and

cost our at at respond quarter, we second if negative the a were to performance level. the just with you in to store So able the same-store lower sales look

But very -- double-edged opportunities. that. to a to we to this how negatively those that, our just experience we more conversion Salesforce. just control impact We customer don't And is good customers. our the with has course, what careful to you here because in And do want hours being costs. is want coverage great to have and good really sword provide been we order Of on devote really have -- a are to doing way is a

one we careful we organizational see to is think we necessarily the be its at that's as to areas. in the certain we in we are line things not and can then lower a level, compensation areas expected, also And that not looking that there our item structures and our are other with drive our here outlook. just line but And and outlook at efficient more going more that we big that looking store are be variable trying compensation that can impacted to variable we And that included then big be at number, pay. results is what in going saw is and with because that are our how a business

quarter, said build and long the multiple What the Guess? for like think that that, intentional front next touch opportunity we big was this we we And during company, we going the are have are we our not budget completely company we we -- not saying has going for of We and -- things this been we but long we has are is categories are term. overturn to our marketing we we are protect just is in incredible like doing to and with big the want is it. markets. what this product us before, in term. thinking a because to for Eric about did we because in remarks, go think multiple an opportunities And have running

growing a really is have a in We India way. market like that very aggressive

multiple that East And for plan new as the last X Middle have years. partner, big, we are Organization. we business. I really are on in We don't They where opportunity the the X to quite & the or to big have us like bit And about. an for partner working sidelines with we Bone, talked to a lot grow [indiscernible] opportunities We then are there of is just a that. and think when opportunity a grow we stay there want a see a Rag great markets

Operator

session This today. for for does to And the closing to would turn I remarks. go and conclude Carlos back over like call Q&A the ahead

You have the floor.

Carlos Alberini

today. participation you. several we for we you. you in but all long [ Thank excited. Yes. Thank ] sorry weren't your are if answers, thank I'm Well,

Goldman that conference at said, is progress -- as X. a our with we look on and you transformation to and year about that -- in with pleased our We future, calling the very excited speaking I very, up September remain forward are we this are we coming a investment,

again, see soon. day. we you great thank and So a Have you

Operator

today's Thank for call. joining you conference all

You may disconnect.

Guess' (GES) 28 Aug 242025 Q2 Earnings call transcript