Guess? to exit some retail stores in North America to boost profit by FY27

Yahoo

07-04-2025

Fashion clothing and accessories Guess? has disclosed plans to streamline operations and optimise its portfolios in China and North America.
The company intends to turn over its direct operations in China to a local partner.
Guess? chief executive officer Carlos Alberini stated: 'As we enter fiscal year 2026, we are excited about our growth opportunities for our core Guess business, our recently launched Guess Jeans brand and our just acquired rag & bone business. We are focusing our strategic initiatives on increasing direct-to-consumer sales productivity globally and improving profitability through business and portfolio optimisation.
"In connection with this, after many years of running our own direct operations in Greater China, we believe there is an opportunity for this market to be directly developed and managed by a local, highly experienced partner. We have already met several potential candidates for consideration and we expect for this transition to be completed before the end of this fiscal year.'
The company also revealed a planned exit from certain retail stores in North America.
Alberini continued: 'In North America, we see an opportunity to streamline our Guess full price store portfolio by exiting non-strategic, unprofitable locations, and to reduce costs by consolidating some of our infrastructure supporting this business. Our fiscal 2026 outlook includes the anticipated impact from these actions and we expect that, together, they will unlock approximately $30 million in operating profit in fiscal 2027.'
The developments were revealed as the company announced its fourth quarter and full fiscal year 2025 (FY25) operational performance results.
It reported a significant contraction in net earnings, down 70% to $60.4m for FY25 from the previous year's $198.2m.
Earnings include an unrealised loss of $60.7m stemming from a revaluation of derivatives linked to the firm's convertible senior notes maturing in 2028, and associated hedge instruments.
A substantial reduction was also observed in the company's diluted earnings per share, which fell 75% to $0.77 based on generally accepted accounting principles (GAAP), compared to $3.09 in FY24.
Despite these challenges, Guess? experienced an 8% surge in total net revenue, reaching $3.00bn for the fiscal year concluding on 1 February 2025, up from $2.78bn the previous year.
Operational earnings for Guess? in FY25 were adversely affected, witnessing a 34% decline to $173.8m from $263.3m recorded in fiscal 2024.
In the fourth quarter of fiscal 2025, Guess? saw net earnings of $81.4m, marking a decrease of 29% from the corresponding quarter of the previous year, which stood at $115.3m.
This included an unrealised loss of $18.9m due to derivative revaluation.
EPS for the company during this quarter dropped by 32% to $1.16, while total net revenue for the period increased by 5% to $932.3m from $891.1m in the same quarter of the preceding year.
GAAP operational earnings for the fourth quarter also decreased 28.4% to $103.6m compared to $144.8m in the same quarter of the previous year.
The company ended the fiscal year with a total of 1,070 directly operated retail stores the Americas, Asia and Europe.
Looking ahead to fiscal 2025, Guess? projects a net revenue increase ranging from 3.9% to 6.2%.
The company anticipates operational earnings between $133m and $165m and projects an operating margin expansion of between 4.5% and 5.4%.
On 2 April 2024, Guess? completed its acquisition of New York fashion label rag & bone through a partnership with WHP Global, acquiring all operating assets and assuming related liabilities of rag & bone's business operations.
The company formed a joint venture with WHP Global that acquired rag & bone's intellectual property rights, integrating them into its existing business segments.
In March 2025, WHP Global and Guess? reached a new licensing agreement with Signal Brands to boost the development of New York-based fashion brand rag & bone's handbags and small leather products line.
In separate development, Guess? appointed Alberto Toni as the chief financial officer (CFO).
Dennis Secor, who has served as interim CFO, will continue as executive vice-president until 12 September 2025 to ensure a smooth transition.
"Guess? to exit some retail stores in North America to boost profit by FY27" was originally created and published by Retail Insight Network, a GlobalData owned brand.
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