Executive Summary
Summary of QQ1 2026 results for Guess Inc shows meaningful top-line momentum driven by the Rag & Bone acquisition, with total revenues of $648.0 million, up 9% year over year (YoY) and 12% in constant currency. The Rag & Bone contribution added 9 percentage points to constant‑currency growth, while the core Guess business contributed roughly 3 percentage points. Europe wholesale posted mid‑teens growth, Americas Wholesale delivered a material lift (USD up ~63%), and Asia remained a net negative, pressuring overall profitability. The quarter included a gross margin of 39.9% (down 200 bps YoY) and an adjusted operating loss of $26 million (adjusted EBIT margin −4.0%), with adjusted EPS of −$0.44. The mix shift toward wholesale and the Rag & Bone integration drove higher SG&A (up 11% YoY) and a tighter operating environment for full-price stores, contributing to a negative near-term profitability trajectory. Management also highlighted tariff mitigation actions that reduce annual margin impact to under $10 million and signaled a robust, multi‑quarter strategic plan to improve retail productivity, supply-chain flexibility, pricing discipline, and organizational efficiency. Full-year guidance was reaffirmed with revenue growth of 5.5%–7.4%, adjusted operating margin of 4.4%–5.1%, and adjusted EPS of $1.32–$1.64, with a second‑quarter revenue outlook of 2.9%–4.7% (≈2%–4% in constant currency) and a plan to optimize working capital to offset earnings pressure.
Key Performance Indicators
QoQ: -132.14% | YoY:-99.43%
QoQ: -140.45% | YoY:-352.86%
QoQ: -142.48% | YoY:-370.83%
Key Insights
Revenue: $647.801 million; YoY +9.44%, QoQ −30.51%. Gross Profit: $258.457 million; YoY +3.96%, QoQ −37.13%. Operating Income: −$33.308 million; YoY −99.43%, QoQ −132.14%. Net Income: −$32.928 million; YoY −352.86%, QoQ −140.45%. EBITDA: −$12.091 million; EBITDA Margin = −1.87% (EBITDARatio = −0.0187). EPS (GAAP and Diluted): −$0.65; YoY −370.83%, QoQ −142.48%. Gross Margin: 39.90% (−200 bps YoY). SG&A: $286.536 million (up 11% YoY). Adjusted SG&A Margin: 44...
Financial Highlights
Revenue: $647.801 million; YoY +9.44%, QoQ −30.51%. Gross Profit: $258.457 million; YoY +3.96%, QoQ −37.13%. Operating Income: −$33.308 million; YoY −99.43%, QoQ −132.14%. Net Income: −$32.928 million; YoY −352.86%, QoQ −140.45%. EBITDA: −$12.091 million; EBITDA Margin = −1.87% (EBITDARatio = −0.0187). EPS (GAAP and Diluted): −$0.65; YoY −370.83%, QoQ −142.48%. Gross Margin: 39.90% (−200 bps YoY). SG&A: $286.536 million (up 11% YoY). Adjusted SG&A Margin: 44% (SG&A rate up 80 bps). Adjusted Operating Loss: −$26 million; Adjusted OpEx Margin: −4%. Inventory: $638.189 million (+15% YoY). Cash: $151.996 million at period end. Debt/Leverage: Total debt $1.594 billion; Net debt $1.443 billion. Cash flow: Net cash from operating activities −$73.412 million; Free cash flow −$95.319 million. Capex: $22 million; Payment of dividends in period: $16.008 million (per cash flow details). Outlook: 2026 full-year revenue +5.5% to +7.4%, adjusted operating margin 4.4%–5.1%, adjusted EPS $1.32–$1.64, Q2 revenue growth +2.9% to +4.7% (currency tailwind ~1 point). Tariff impact expected to be < $10 million for the year; China/Greater China remains under review with potential partnership.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
647.80M |
9.44% |
-30.51% |
| Gross Profit |
258.46M |
3.96% |
-37.13% |
| Operating Income |
-33.31M |
-99.43% |
-132.14% |
| Net Income |
-32.93M |
-352.86% |
-140.45% |
| EPS |
-0.65 |
-370.83% |
-142.48% |
Management Commentary
- Strategy and market positioning: Management reiterated a strategic emphasis on retail productivity and brand engagement, including a data-driven, AI-enabled approach to customer insights and loyalty programs, with Europe leading initial loyalty rollouts (Italy and Poland) that yielded ~36% incremental revenue for loyalty customers and higher store visitation.
"The biggest driver of the increase was the acquisition of rag & bone, adding 9 points of constant currency growth."
— Carlos E. Alberini
"We are implementing this again with our Spring/Summer '26 collection with our goal ultimately to leave 50% of our buy open after we place our initial orders."
— Carlos E. Alberini
Forward Guidance
Management reaffirmed full-year targets: revenue growth of 5.5%–7.4%, adjusted operating margin of 4.4%–5.1%, and adjusted EPS of $1.32–$1.64. The company expects Q2 revenue growth of 2.9%–4.7% (about 2%–4% in constant currency) and reiterates that tariff exposure is largely mitigated through sourcing shifts and cost management, with an anticipated margin impact under $10 million for the year. The near-term focus is on Rag & Bone synergies, European wholesale momentum, and the Middle East JV, alongside ongoing retail productivity initiatives. Risks include currency volatility, ongoing Asian softness (notably Greater China), and the pace of consumer demand recovery. Key monitorables for investors include: (1) the progress of Rag & Bone’s organic and licensed category expansion, (2) effectiveness of pricing and opening-price-point product mix, (3) sustainability and speed of inventory normalization post-Red Sea disruptions, (4) performance of Europe loyalty programs and the AI-driven customer insights program, and (5) potential net cash flow improvements as working capital normalizes.