Guess? faced a challenging first quarter, reporting a net unrealized loss of $4.3 million, a significant downturn from last year’s unrealized gain of $38.5 million. For Q1 of fiscal 2026, the company’s GAAP diluted net loss per share reached $0.65, compared to a GAAP diluted net earnings per share of $0.23 for the same period last year.
Additionally, an adjusted net loss of $22.3 million was recorded for the first quarter, marking a staggering 61% increase from the adjusted net loss of $13.8 million experienced in the previous year.
CEO Carlos Alberini acknowledged the difficulties during an earnings call, stating, “We had a very good first quarter. And this was on top of a year or the ten months that we own the business, where we exceeded our expectations.”
Performance Metrics for Q1 FY26
In Europe, Guess? enjoyed an 8% increase in revenue, although retail comparable sales, including e-commerce, dropped by 4%. The Americas saw retail revenues rise by 9%, or 12% in constant currency, despite an 11% decline in retail comparable sales in US dollars.
Conversely, Asia experienced a 20% revenue decline in US dollars and a 16% decrease in constant currency, with retail comparable sales falling by 24%.
The GAAP loss from operations rose by 67.5% to $33.31 million, up from $19.89 million the previous year. The GAAP operating margin for Q1 decreased by 1.7% to a negative 5.1%, a drop from the previous year’s negative 3.4%. This decline was attributed to an unfavorable business mix, increased asset impairment charges, and negative currency impacts, partially mitigated by newly acquired businesses.
Outlook for Q2 and Fiscal 2026
Looking forward to Q2, Guess? expects consolidated net revenue growth between 2.9% and 4.7%. They project GAAP earnings from operations to fall between $19 million and $26 million, with earnings per share estimated between $0.11 and $0.18. The anticipated GAAP operating margin is expected to range from 2.5% to 3.3%.
For the full fiscal year, Guess? forecasts revenue growth between 5.5% and 7.4%, with GAAP earnings from operations estimated at $124 million to $148 million. Diluted EPS is projected to range from $0.87 to $1.11.
Alberini expressed confidence in ongoing revenue growth, driven by the expansion of the rag & bone line, continued development of Guess Jeans, and a new joint venture in the Middle East with the Chalhoub Group. He highlighted proactive steps taken to manage tariff exposure, limiting impact to under $10 million based on current conditions, which have been factored into their outlook.
In March, WHP Global, a partner on the rag & bone acquisition, proposed to acquire Guess? for $13.00 per share in cash for all outstanding shares of the company.
