Guess reported its Q2 earnings results, with revenue climbing 10% year over year to $733 million, fueled by the acquisition of fashion brand Rag & Bone and strong wholesale growth in the U.S. and Europe.

“All our segments, except for Asia, delivered top-line growth,” CEO Carlos Alberini said in the company’s earnings release. “Our bottom-line results reflect our decision to significantly increase our marketing investments compared to last year’s spend to support the international expansion of our brands, including our core Guess brand as well as the new additions to our portfolio, Guess Jeans and Rag & Bone.”

Dennis Secor, the interim chief financial officer at Guess, highlighted a 5% rise in online sales over the previous quarter during the earnings call. However, year-over-year same-store sales, including Guess ecommerce sales, declined in both the Americas and Asia, which Secor attributed to more cautious consumer spending.

Guess currently ranks No. 176 in Digital Commerce 360’s Top 1000 Database of North American retailers by online sales. Rag & Bone is No. 640. Digital Commerce 360 projects that total online sales for Guess in 2024 will reach $537.07 million.

Guess web sales by year

Guess Q2 earnings show growth and net loss

For the second quarter ended Aug. 3, Guess reported a GAAP (generally accepted accounting principles) net loss of $10.6 million, having achieved net earnings of $39 million in the same quarter last year. Adjusted net earnings came in at $23 million, down 42% from $39.7 million a year ago.

Despite the setbacks, total revenue for the quarter grew 10%, reaching $732.6 million. That’s up from $664.5 million in the previous year. While Guess did not break out specific online sales, it did report mixed regional results, including ecommerce:

• In Europe, Guess revenue rose 5%, with retail comparable sales, including ecommerce, up 1%.
• Americas retail revenue increased 8%. However, Guess retail comparable sales, including ecommerce, dropped 10%. That was softened by a 1% boost from online sales.
• Asia revenue fell 8%, with retail comparable sales, including ecommerce, down 14%.

Wholesale surge drives growth

A bright spot for the quarter was the Americas wholesale segment, which saw a 93% revenue increase. Alberini credited the growth to strong performance in both the U.S. and Mexico. He also noted steady growth in Europe’s wholesale business, which has been consistent for several years.

Rag & Bone, the New York-based fashion brand Guess acquired in April through a partnership with WHP Global, also posted strong wholesale results. Guess took over the brand’s operating assets and liabilities while splitting the intellectual property 50/50 with WHP. Alberini noted that the transition has gone smoothly, with Rag & Bone’s customer demand exceeding expectations, though direct-to-consumer sales were slightly below projections.

Looking ahead, Guess plans to expand Rag & Bone’s presence in the U.S. and Europe, with new stores planned, including a location in Amsterdam. The company is also exploring new markets such as Mexico, Latin America, and Australia.

New brand launch and marketing investments

Alberini also spotlighted the launch of Guess Jeans, a Gen Z-focused denim brand led by Nicolai Marciano, son of Guess co-founder Paul Marciano. The brand has garnered significant attention, including a successful event at Coachella that brought in billions of impressions, he said. The first sales campaign exceeded expectations, and Guess Jeans has already opened stores in Amsterdam and Berlin.

On the marketing front, Alberini said Guess doubled its investments in the second quarter and plans to continue at higher spending levels for the rest of the year. The company partnered with an external firm to benchmark its marketing efforts, with plans to invest more in social media and customer engagement to drive both in-store and online traffic.

Future outlook

Looking ahead, Guess now expects full-year revenue growth between 9.5% and 11%, slightly down from its previous forecast of 10.7% to 12.7%. Secor noted that third-quarter revenue should benefit from Rag & Bone’s performance, as the brand’s peak revenue period comes in the third quarter due to its wholesale focus.

Guess Q2 earnings results recap

For the second quarter ended Aug. 3, 2024, Guess reported:

• Total revenue rose 10% to $732.6 million, up from $664.5 million last year.
• Europe revenue increased 5%, with retail comparable sales, including ecommerce, up 1%.
• Americas retail revenue grew 8%, but retail comparable sales, including ecommerce, dropped 10%.
• Asia revenue fell 8%, with retail comparable sales, including ecommerce, down 14%.
• GAAP net loss of $10.6 million, compared to a $39 million profit in the same quarter last year.

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