Guess Swings to Loss in Q1 Amid Ongoing Sale Talks With WHP

Guess closes the first quarter in the red. The U.S. company closed the first three months of the year with a loss of 31.24 million dollars, while its sales rose 9.44% in the same period thanks to the integration of Rag&Bone. The company continues to analyze the offer presented by WHP Global to take control of its capital and delist it from the stock market.

The denim company posted an operating loss of $33.31 million, up from a negative $19.89 million in the first quarter of last year. Higher expenses (including rents), an unfavorable channel mix and exchange rates have impacted the group's profitability.

The company's operating margin in Europe fell to negative 2.9% due to higher expenses, especially advertising. In the Americas, meanwhile, operating margin fell to negative 10.5% due to lower comparable sales and higher discounting. In Asia, the operating margin was also negative due to lower sales.

Guess continues to analyze the takeover offer made by WHP Global.

With a network of 1,074 company-owned and 527 partner-operated stores worldwide, Guess closed the first quarter with sales of $647.8 million, an increase of 9.44% over the same period last year.

While in Europe the group's sales rose by 8% (to 306.07 million dollars, maintaining its position as the group's leading region), in the retail business in the Americas they increased by 9% and in wholesale by 63%. In Asia, on the other hand, the company recorded a 20% decline in sales.

The company has indicated that it continues to analyze WHP Global's proposal to take control of the company, with an offer of 13 dollars per share, excluding the shares held by Paul and Maurice Marciano (founders) and Carlos Alberini, CEO.

"Looking ahead to the remainder of the year, we continue to expect solid revenue growth driven by the expansion of Rag&Bone (completed in April 2024), the continued development of Guess Jeans and the new joint venture with Chalhoub," said Carlos Alberini. "On the cost side, we have taken proactive steps to manage tariff exposure and protect margins, limiting this year's net impact to less than $10 million based on current conditions, which we have incorporated into our forecast," he added.