Guess?, Inc has reported results for the second quarter (Q2) of fiscal 2026 (FY26) ended August 2, 2025, returning to profit with GAAP net earnings of $6.2 million compared to a loss of $10.6 million a year earlier, largely due to a $1.1 million unrealised derivative gain against a $40.5 million loss last year on its 2028 convertible notes.

Guess?, returned to profit in Q2 FY26 with GAAP net earnings of $6.2 million versus a $10.6 million loss last year.
Revenue rose 6 per cent to $772.9 million, driven by Europe, but Americas retail, wholesale and Asia weakened.
Operating margins shrank sharply, and H1 showed a $26.7 million loss, highlighting ongoing cost and demand pressures.

GAAP diluted earnings per share stood at $0.12 versus a loss of $0.28 in the same prior-year quarter, with share buybacks and currency providing a combined $0.05 benefit. On an adjusted basis, net earnings fell 40 per cent to $13.8 million, with adjusted diluted EPS dropping to $0.26 from $0.42.

Total net revenue grew 6 per cent to $772.9 million from $732.6 million a year earlier, reflecting strong growth in Europe where revenues advanced 14 per cent in dollars and 9 per cent in constant currency. Europe also delivered an 11 per cent rise in retail comparable sales. The Americas Retail business slipped 1 per cent with comparable sales down 5 per cent, while Americas Wholesale dropped 11 per cent. Asia rose 3 per cent but comparable sales declined 2 per cent, and licensing fell 10 per cent.

Operating income declined sharply as GAAP earnings from operations fell 62.1 per cent to $18.1 million, taking margins down to 2.3 per cent from 6.5 per cent a year ago, mainly due to higher store and advertising expenses, markdowns, a weaker business mix and the absence of a gain on asset sales booked last year, the company said in a release.

Adjusted operating income slid 25 per cent to $28.5 million with margins narrowing to 3.7 per cent from 5.2 per cent. By segment, Europe margins improved to 10.6 per cent, Americas Retail plunged to negative 3.7 per cent, Americas Wholesale improved slightly to 19.6 per cent, Asia weakened to negative 6.8 per cent, and Licensing rose to 95.4 per cent.

“We are pleased with our second quarter performance, as we delivered revenues ahead of our expectations for the period. Our improved revenues were mainly driven by stronger than expected comparable store sales in our European business and in our Americas Retail segment, which showed continued improvement in same store sales versus the prior quarter. During the period we managed margins and expenses well, which, coupled with the revenue growth, led to GAAP earnings per share within our range of expectations and better than expected adjusted earnings per share.” Carlos Alberini, chief executive officer, commented.

For the six months ended August 2, 2025, the company posted a GAAP net loss of $26.7 million compared with net earnings of $2.4 million in the prior-year period, reflecting a $3.2 million unrealised derivative loss versus a $2 million gain last year. Diluted loss per share was $0.53 compared with EPS of $0.04, with buybacks reducing EPS by $0.02 but currency adding $0.12. Adjusted net results showed a loss of $8.5 million against earnings of $9.1 million last year, with adjusted diluted EPS at negative $0.17 versus positive $0.16. Revenues for the half rose 7 per cent to $1.42 billion, supported by growth in Europe and Americas Wholesale but weighed down by a 10 per cent decline in Asia and a 12 per cent fall in licensing.

GAAP operating results swung to a $15.2 million loss from earnings of $27.9 million last year, with margins slipping to negative 1.1 per cent from 2.1 per cent. Adjusted operating income dropped to $2.7 million from $30.3 million, with margin reduced to just 0.2 per cent from 2.3 per cent.

Despite top-line growth in Europe and Wholesale, Guess’s profitability remains under pressure from higher costs, weak Americas retail demand, and significant losses in Asia, signalling a challenging path ahead for restoring margin strength.

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Fibre2Fashion News Desk (HU)