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Guess? Inc. Reports Decline in Q4 Earnings, Revenue Up 5%

Guess? Inc. faced a significant drop in net earnings for Q4 2025, down 29% to $81.4 million. However, revenue rose by 5%, driven by acquisitions. The company is focused on improving profitability through strategic decisions. Investors should weigh these factors carefully.

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AI Rating:   5
**Earnings Overview**: Guess? Inc. reported a net earnings decline of 29% compared to the same quarter last year. This notably affects Earnings Per Share (EPS), which decreased from $1.71 to $1.16. Such a fall suggests a struggling profitability landscape amid operational challenges. Adjusted net earnings also saw a 30% drop. This trend could signal underlying issues in sustaining margins, possibly leading to downward pressure on the stock price if investors perceive a prolonged negative trajectory. **Revenue Analysis**: Despite the drop in earnings, total net revenue increased by 5%, hinting at some operational resilience. The contribution from the rag & bone acquisition, along with positive growth in wholesale businesses, underscores potential growth pathways which need careful monitoring. However, this growth does not offset the earnings decline, marking a mixed signal for investors regarding the company's financial health in the short term. **Future Guidance**: The company projects a loss per share for Q1 fiscal 2026, which may disappoint investors who were hoping for a quick recovery to profitability. The projected revenue growth of 5.8% to 7.5% year-over-year could be viewed as cautious optimism given the overall decline in earnings and challenging market variables. The longer-term outlook sees potential for improved profit margins and operating profits in fiscal 2027 due to expected operational changes, yet execution risks remain. **Strategic Initiatives**: Efforts to streamline operations, exit unprofitable locations, and enhance direct-to-consumer sales reflect attempts to adapt to market conditions and boost profitability. These actions could ultimately lead to more positive earnings metrics in the future but will take time to materialize. The recently authorized share repurchase program may also positively influence stock price by reducing supply. **Dividends**: The quarterly cash dividend of $0.30 per share maintains a return to shareholders, reflecting management's commitment to shareholder value albeit within a tough earnings environment, which may offer some confidence to investors. Overall, while challenges prevail, the strategic initiatives and revenue growth suggestions provide a nuanced perspective that may cause fluctuations in stock price as investors adjust their expectations regarding future performance.
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