Fashion clothing and accessories Guess? has disclosed plans to streamline operations and optimise its portfolios in China and North America.
The company intends to turn over its direct operations in China to a local partner.
Guess? chief executive officer Carlos Alberini stated: “As we enter fiscal year 2026, we are excited about our growth opportunities for our core Guess business, our recently launched Guess Jeans brand and our just acquired rag & bone business. We are focusing our strategic initiatives on increasing direct-to-consumer sales productivity globally and improving profitability through business and portfolio optimisation.
“In connection with this, after many years of running our own direct operations in Greater China, we believe there is an opportunity for this market to be directly developed and managed by a local, highly experienced partner. We have already met several potential candidates for consideration and we expect for this transition to be completed before the end of this fiscal year.”
The company also revealed a planned exit from certain retail stores in North America.
Alberini continued: “In North America, we see an opportunity to streamline our Guess full price store portfolio by exiting non-strategic, unprofitable locations, and to reduce costs by consolidating some of our infrastructure supporting this business. Our fiscal 2026 outlook includes the anticipated impact from these actions and we expect that, together, they will unlock approximately $30 million in operating profit in fiscal 2027.”
The developments were revealed as the company announced its fourth quarter and full fiscal year 2025 (FY25) operational performance results.
It reported a significant contraction in net earnings, down 70% to $60.4m for FY25 from the previous year’s $198.2m.
Earnings include an unrealised loss of $60.7m stemming from a revaluation of derivatives linked to the firm’s convertible senior notes maturing in 2028, and associated hedge instruments.
A substantial reduction was also observed in the company’s diluted earnings per share, which fell 75% to $0.77 based on generally accepted accounting principles (GAAP), compared to $3.09 in FY24.
Despite these challenges, Guess? experienced an 8% surge in total net revenue, reaching $3.00bn for the fiscal year concluding on 1 February 2025, up from $2.78bn the previous year.
Operational earnings for Guess? in FY25 were adversely affected, witnessing a 34% decline to $173.8m from $263.3m recorded in fiscal 2024.
In the fourth quarter of fiscal 2025, Guess? saw net earnings of $81.4m, marking a decrease of 29% from the corresponding quarter of the previous year, which stood at $115.3m.
