Fri, Jun 7, 9:15 PM (92 days ago)
Guess?, Inc. reported a net earnings of $13.0 million for Q1 FY2025, compared to a net loss of $11.8 million in Q1 FY2024. This improvement was driven by a 3.9% increase in net revenue to $591.9 million, primarily due to higher wholesale shipments, royalties, and the impact of the rag & bone acquisition. Gross margin improved by 120 basis points to 41.9%, attributed to higher initial markups and revenue increases. However, SG&A expenses rose by 15.5%, leading to a 450 basis point increase in the SG&A rate to 45.1%. Asset impairment charges were $1.1 million, down from $1.9 million in the prior year. Despite these higher expenses, the company reported a loss from operations of $19.9 million, a significant increase from $0.9 million in Q1 FY2024. Other income, net, was $35.8 million, largely due to a $38.5 million gain on the fair value remeasurement of derivatives. The effective income tax rate was a benefit of negative 42.0%, compared to a benefit of 17.4% in the prior year, influenced by the non-taxable gain on derivatives. Cash and cash equivalents were $241.7 million, with total borrowings of $204.9 million. Inventory levels increased by 4.9% to $554.9 million, driven by the rag & bone acquisition. The company repurchased 0.3 million shares for $10.3 million during the quarter, leaving $189.7 million authorized for future repurchases.