Q1 2025 was a busy time for Guess Inc., which completed its first acquisition with Rag & Bone, launched the new Guess Jeans brand and secured the renewal of a key licensing agreement.
“The year is off to a strong start, and we are pleased to report significant progress against a number of important operational, strategic and financial objectives,” Carlos Alberini, Guess Inc. CEO, said during the company’s earnings call on Thursday. “From an operational and financial perspective, our teams executed well during the quarter, which enabled us to deliver results for the first quarter that exceeded our expectations in terms of revenues, operating earnings and per share results. We grew sales in each of our segments and expanded gross margins, both of which favorably impacted the bottom line.”
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Revenues in the first quarter ending May 4 totaled $592 million compared with last year’s $570 million. First-quarter net earnings were strong at $13 million compared with an $11 million net loss during last year’s first quarter. “Though with the addition of Rag & Bone’s April revenues, we were able to more than offset that topline pressure in the segment and deliver very modest growth,” Alberini said.
Accessories shine
What’s selling differs by region, but accessories are strong across the board.
Accessories are a bright spot in Europe, Alberini said, with sales being driven by the “healthy performance” of handbags, travel accessories, women’s jewelry and fragrances. Women’s apparel business was also strong in Europe, particularly in knit tops, sweaters, skirts and denim, while men’s posted solid increases as well, driven by the demand for knit tops, sweaters and activewear.
In the Americas, Guess Inc. saw declines in both its women’s and men’s businesses, though activewear and sweaters were the best performing categories. Accessories outperformed apparel, especially handbags, watches, fragrances and travel accessories.
With handbags being “instrumental” in growing the Guess brand and offering opportunities for further growth, Alberini said the company has renegotiated the extension of its handbag license through to 2039. The new contract included a $40 million upfront cash payment for the license renewal. “Going forward, we see handbags as a strong category to augment the apparel assortment of other lifestyle brands beyond Guess as well. Rag & Bone is a great example with this potential,” he said.
Guess Jeans hits retail
Major retailers are showing their support for Guess Jeans, the new Gen Z-oriented brand that just opened its first store in Amsterdam.
In France, Galeries Lafayette recently featured Guess Jeans with a popup installation at the flagship Paris Haussmann store that included a denim customization station and a special product display. The department store also featured the first Guess Jeans advertising campaign starring Iris Law on the its facade.
This month, Alberini said Italian department store chain La Rinascente plans to do a special Guess Jeans presentation in its flagship store on Corso Vittorio Emanuele in Milan.
Rag & Bone ambitions
“Rag & Bone is already a $250 billion business, a heritage brand with proven longevity, with a diverse product offering for both women and men, commanding premium pricing and margins and appealing to a highly affluent consumer base. This nicely complements our existing business,” Alberini said.
The company is leaning into the experience of Andrew Rosen, who has been with Rag & Bone since 2006 and was recently named the brand’s executive chair. “He brings a wealth of experience and expertise to the brand, providing strategic direction and oversight to drive the brand’s mission forward,” Alberini said.
The company is exploring two major opportunities for Rag & Bone: to increase its product assortment and to make it a global brand. Guess Inc. is already advertising the brand in existing and new markets.
“We believe that in order to represent the brand appropriately and give the kind of brand awareness that the brand needs, especially in a region like the European region, we definitely need store presence in some of the key cities,” Alberini said, adding that the company is leveraging the Guess infrastructure and team it has in multiple European markets to look for retail opportunities.
“As Rag & Bone continues to operate as an independent fashion brand, together we can help to optimize their operations by sharing resources and leveraging scale, including sourcing opportunities,” the exec said.
