Wed, Jun 11, 9:21 PM (38 days ago)
**Summary of GUESS?, Inc. (GES) Q1 2026 Financial Performance** **Financial Health and Performance Metrics:** - **Revenue:** $647.8 million, up 9.4% YoY. - **Gross Profit Margin:** 39.9%, down 200 bps YoY. - **Operating Margin:** -5.1%, down 170 bps YoY. - **Net Loss:** $32.9 million, compared to a net income of $13.0 million YoY. - **EPS:** -$0.65, compared to $0.23 YoY. **Cash Flow:** - **Operating Cash Flow:** -$73.4 million, down from -$22.9 million YoY. - **Investing Cash Flow:** -$22.5 million, down from -$77.9 million YoY. - **Financing Cash Flow:** $52.6 million, up from -$15.7 million YoY. **Balance Sheet Highlights:** - **Cash & Cash Equivalents:** $151.2 million, down from $241.7 million YoY. - **Inventory:** $638.2 million, up 15.0% YoY. - **Accounts Receivable:** $331.4 million, up 11.4% YoY. **Quarterly Performance Discussion:** - **Revenue Growth:** Driven by newly acquired businesses, higher wholesale shipments, and net new store openings. - **Gross Margin Decline:** Due to unfavorable channel mix and currency impact. - **Operating Margin Decline:** Driven by higher asset impairment charges and unfavorable currency impact. - **Net Loss:** Impacted by higher asset impairment charges and unfavorable currency impact. **Trends and Uncertainties:** - **Macroeconomic Conditions:** Declines in consumer spending, inflation, higher interest rates, and foreign exchange rate fluctuations continue to impact the business. - **Supply Chain Disruptions:** The Red Sea crisis and other supply chain issues are affecting inventory management. - **Tariffs and Trade Policies:** Recent changes in U.S. tariff legislation and potential retaliatory tariffs could impact consumer sentiment and demand. **Future Operations Impact:** - **Strategic Initiatives:** Focus on organization and talent, growth, brand relevancy, customer centricity, product excellence, and optimization. - **Capital Allocation:** Prioritizing investments in growth and infrastructure, while managing working capital and returning value to shareholders through dividends and share repurchases. - **Liquidity and Capital Resources:** Expect to satisfy ongoing cash requirements with cash flow from operations, existing cash balances, and borrowings under credit facilities. **Segment Performance:** - **Europe:** Net revenue up 7.8% YoY, operating margin down 2.7% YoY. - **Americas Retail:** Net revenue up 9.0% YoY, operating margin down 3.3% YoY. - **Americas Wholesale:** Net revenue up 63.3% YoY, operating margin down 2.8% YoY. - **Asia:** Net revenue down 20.1% YoY, operating margin down 8.2% YoY. - **Licensing:** Net revenue down 13.8% YoY, operating margin down 13.7% YoY. **Non-GAAP Measures:** - **Adjusted Net Loss:** $22.3 million, compared to $13.8 million YoY. - **Adjusted EPS:** -$0.44, compared to -$0.27 YoY. **Conclusion:** GUESS?, Inc. faced challenges in Q1 2026, with a decline in gross and operating margins, and a net loss. The company is focusing on strategic initiatives to drive growth and improve profitability, while managing macroeconomic uncertainties and supply chain disruptions. The outlook remains cautious, with a focus on liquidity management and capital allocation.