Q1 2025 Guess? Inc Earnings Call

May 30, 2024

Operator: Good day, everyone, and welcome to the Guess First Quarter Fiscal 2025 Earnings Conference Call. I would like to turn the call over to Fabrice Benarouche, Senior Vice President of Finance and Investor Relations and Chief Accounting Officer. Please go ahead.

Good day, everyone and welcome to the guess first quarter fiscal 2025 earnings conference call.

Speaker Change: I'd like to turn the call all beach to Fabry Spin English senior Vice President of Finance and Investor Relations and Chief Accounting Officer. Please go ahead.

Fabrice Benarouche: Thank you, operator. Good afternoon, everyone, and thank you for joining us. On the call today with me are Carlos Alberini, Chief Executive Officer, and Markus Neubrand, Chief Financial Officer. During today's call, the company will be making forward-looking statements, including comments regarding future plans. Strategic Initiatives, Capital Allocation, and Short and Long Term The company's actual results may differ materially from current expectations based on risk factors included in today's press release and the company's quarterly and annual reports filed with the SEC. Comments will also reference certain on-gap or adjusted measures.

Speaker Change: Thank you operator.

Speaker Change: And everyone and thank you for joining us today.

Speaker Change: On the call today with me are Carlos <unk>, Chief Executive Officer, and knock this new brand Chief Financial Officer.

Speaker Change: During today's call the company will be making forward looking statements, including comments regarding future plans.

Speaker Change: <unk> initiatives capital allocation and short and long term outlooks.

Speaker Change: The company's actual results may differ materially from current expectations based on risk factors included in today's press release, and the company's quarterly and annual reports filed with the SEC.

Comments will also reference certain non-GAAP or adjusted measures GAAP reconciliations and descriptions of these measures can be found in todays earnings release.

Carlos: Now I will turn it over to Carlos Thank you for brief and thank you all for joining us for our Q1 fiscal 2025 quarterly conference call.

Fabrice Benarouche: Gap reconciliations and a description of these measures can be found in today's earnings. Now I will turn it over to Carlos. Thank you, Fabrice, and thank you all for joining us for our Q1 Fiscal 2025 Quarterly Conference Call. 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. 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.

Carlos: 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: 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.

Fabrice Benarouche: We grew sales in each of our segments and expanded gross margins, both of which favorably impacted the bottom line. On the strategic front, we are excited to have completed our company's first ever acquisition. We launched a new brand, Guess Jeans, secured the renewal of a key licensing agreement, and transformed our U.S. distribution function. We also made great strides to further strengthen our financial foundation and deliver value for our shareholders, including rewarding them with a special dividend, refinancing and repaying our 2024 convertible notes, and obtaining an expanded credit facility. Markus will share more on these financial highlights in just a few minutes. And we achieved all of this in just a little more than two months since we last spoke.

Carlos: Both of which favorably impacted the bottom line.

Carlos: On the strategic front, we are excited to have completed our companys first ever acquisition, we launched our new brand guests genes secured the renewal of our key licensing agreement and transformed our U S distribution function.

Carlos: We also made great strides to further strengthen our financial foundation and deliver value for our shareholders, including rewarding them with a special dividend refinancing and repaying our 2024 convertible notes and obtaining an expanded credit facility.

Speaker Change: Markus will share more on this financial highlights in just a few minutes.

Speaker Change: And we achieved all of this in just a little more than two months since we last spoke.

Carlos E. Alberini: We are proud of these results, which reflect the talent and skill of our dedicated and experienced team members. On behalf of Paul and myself, I want to take this opportunity to recognize our teams around the world for a job well done and thank them for their outstanding contributions. These results also reflect the strength and resilience of our brands and the benefit of our highly diversified business model across product categories, geographies, and channels of distribution.

Speaker Change: We are proud of these results, which reflect the talent and skill of our dedicated and experienced team members on.

Speaker Change: On behalf of Paul and myself I want to take this opportunity to recognize our teams around the world for a job well done and thank them for their outstanding contributions.

Speaker Change: These results also reflect the strength and resilience of our brands and the benefit of our highly diversified business model across product categories geographies and channels of distribution that business model helps to enhance the predictability of our earnings and cash flows.

Carlos E. Alberini: That business model helps to enhance the predictability of our earnings and cash flow. The addition of Rag & Bone to our portfolio further diversifies our business and should serve to enhance our company's growth in the years to come. For the first quarter, we grew revenues by 4%, reaching $592 million. As I highlighted a moment ago, each one of our operating segments posted a revenue increase, with America's Wholesale and Licensing segments contributing most significantly to the total growth for the quarter. Our guest business in Americas retail has continued to face challenges with declines in traffic and conversion that have resulted in comp sales headwinds.

Speaker Change: The addition of ragen bonds to our portfolio, even further diversifies, our business and should serve to enhance our company's growth in the years to come for.

Speaker Change: For the first quarter, we grew revenues by 4% reaching $592 million.

Speaker Change: As I highlighted a moment ago, each one of our operating segments posted a revenue increase with the Americas wholesale and licensing segments contributing most significantly to the total growth for the quarter.

Speaker Change: Our gift business in the Americas retail has continued to face challenges with declines in traffic and conversion that resulted in comp sales headwinds, though with the addition of Reagan bonds April revenues, we were able to more than offset top line pressure in the segment and deliver very modest growth.

Carlos E. Alberini: Though, with the addition of Rag & Bone's April revenues, we were able to more than offset that top-line pressure in the segment and deliver very modest growth. On a consolidated basis, the addition of Dragon Bone, which we began to consolidate starting in April, drove the growth for the quarter, with the core Guess and Marciano businesses generating revenues at 3% versus last year at constant growth. Overall, we are pleased with the Rag & Bone business, which is performing in line with our expectations and has been a fantastic addition to the Guess? portfolio.

Speaker Change: On a consolidated basis. The addition of Ragen bone, which we began to consolidate starting in April drove the growth for the quarter with a core gas in marciano businesses generating revenues up 3% versus last year in constant currency.

Speaker Change: Overall, we are pleased with the <unk> business, which is performing in line with our expectations and has been a fantastic addition to the gas portfolio.

Carlos E. Alberini: Our team managed the business well, with tight inventory control and careful expense management. Our disciplined approach to inventory management drove a 4% reduction in Guess and Marciano inventory levels, a higher level of full price selling, and a 120 basis point increase in gross margins for the quarter. Given the seasonality of the business, we had anticipated an operating loss for the quarter. However, we cut that anticipated loss in half, reporting only an $8 million adjusted operating loss and a $0.27 adjusted loss per diluted share.

Speaker Change: Our team managed the business well with tight inventory control and careful expense management.

Speaker Change: Our disciplined approach to inventory management drove up 4% reduction in gas and marciano inventory levels are higher level of full price selling and 120 basis point increase in gross margins for the quarter.

Speaker Change: Given the seasonality of the business, we had anticipated an operating loss for the quarter. However, we cut that anticipated loss in half reporting only an $8 million adjusted operating loss.

Speaker Change: And at 27% adjusted loss per diluted share.

Carlos E. Alberini: Let me offer some regional highlights for the course. In Europe, we delivered a 1% increase in revenues, reaching $284 million ahead of expectation. The strong momentum in our European retail business continued as we posted double-digit comps and grew wholesale deliveries both in constant terms. However, most of our growth, though, was masked by a significant currency headwind.

Speaker Change: Let me offer some regional highlights for the quarter.

Speaker Change: In Europe, we delivered a 1% increase in revenues, reaching $284 million ahead of expectations.

Speaker Change: The strong momentum in our European retail business continued as we posted double digit comps and grew wholesale deliveries both in constant currency.

Speaker Change: Most of our growth, though was masked by a significant currency headwind.

Carlos E. Alberini: Our business performed well in mature markets in Southern and Central Europe, while our softer markets tended to be in the North and the East. Strong product performance was broadly based, with Accessories performing best. The business was driven by the healthy performance of handbags, travel accessories, women's jewelry, and fragrance. Our women's apparel business was strong, particularly in knit tops, sweaters, skirts, and denim, and our men's business posted solid increases as well, driven by the demand for knit tops, sweaters, and accessories in Americas retail.

Speaker Change: Our business performed well in mature markets in southern and Central Europe, while our softer markets tended to be in the north and the east.

Speaker Change: Strong product performance was broadly based with accessories performing best.

Speaker Change: The business was driven by the healthy performance of handbags travel accessories womens jewelry in fragrances.

Speaker Change: Our women's apparel business was strong, particularly in knit tops sweaters skirts in denim and our men's business posted solid increases as well driven by the demand for knit tops sweaters and activewear.

Speaker Change: In the Americas retail.

Carlos E. Alberini: Revenues increased roughly half a percent, reaching $144 million. However, across the U.S. and Canada, the retail environment has remained challenging with consumers remaining cautious in their spending. We saw declines in both our women's and men's businesses, while activewear and sweaters were our best-performing categories.

Speaker Change: Revenues increased roughly half a percent reaching $144 million.

Speaker Change: Across the U S and Canada. The retail environment has remained challenging with consumers remaining cautious in their spending we saw declines in both our women's and men's businesses, while activewear and sweaters were our best performing categories.

Carlos E. Alberini: Accessories outperformed apparel, especially handbags, watches, fragrances, and travel accessories. We are working to navigate the current environment and drive improvements in this business. We feel good about our current product assortment and have been evaluating opportunities to drive more business and improve trends through marketing investments, including trialing different promotional actions, both in-store and online. Our America's wholesale business was strong and grew 21% in the quarter to $62 million, driven mainly by rag and bone shipments as well as growth from Mexico. In Asia, revenues increased by 3% to $73 million.

Speaker Change: Accessories outperformed apparel, especially handbags watches fragrances and travel accessories.

Speaker Change: We're working to navigate the current environment and drive improvements in this business, we feel good about our current product assortment and have been evaluating opportunities to drive more business and improved trends through marketing investments, including trialing different promotional actions both in store and online.

Speaker Change: Our Americas wholesale business was strong and grew 21% in the quarter to $62 million.

Speaker Change: Driven mainly by rugged inbound shipments as well as growth from Mexico.

Speaker Change: In Asia revenues increased 3% to $73 million and finally, our licensing business performed extremely well delivering a revenue increase of 21% to $29 million.

Carlos E. Alberini: And finally, our licensing business performed extremely well, delivering a revenue increase of 21% to $29 million. We are pleased to have delivered on our earnings objectives for the quarter, in addition to driving other key strategic initiatives across our board. Growing Guess and expanding our global reach has always been foundational to our strategic vision since Paul and his brothers started the business. In the 43 years since then, we have built a powerful platform, anchored by successful regional management centers across the globe.

Speaker Change: We are pleased to have delivered on our earnings objectives for the quarter. In addition to driving other key strategic initiatives across our business.

Speaker Change: Growing gas and expanding our global reach has always been foundational to our strategic vision since Paul and his brothers started the business.

Speaker Change: In the 43 year. Since then we have built a powerful platform anchored by successful regional management centers across the globe.

Carlos E. Alberini: Our products are sold in over 100 countries, and we have developed broad capabilities to sell through virtually every distribution model. Between our company and our network of licensee partners, we bring products to market across 25 different categories, leveraging a diverse supply chain that we feel is truly best in class. As a result, we have built Guess into the thriving $5.5 billion retail business that it is today. Looking to the future, we continue to see multiple opportunities to further grow the Guess? brand.

Speaker Change: Our products are sold in over 100 countries and we have developed broad capabilities to sell through virtually every distribution model.

Speaker Change: Between our company and our network of licensee partners, we bring products to market across 25 different categories leveraging at diverse supply chain that we feel is truly best in class.

Speaker Change: As a result, we have built gas into the thriving five 5 billion retail business that it is today.

Speaker Change: Looking to the future we continue to see multiple opportunities to further grow the guess brand.

Carlos E. Alberini: Beyond that, we can leverage our powerful platform to support more than just one brand. We know that with our capabilities, we can do more. We have built a platform that can power a bigger and broader business, generate synergistic growth and margin expansion and deliver significant value creation over time. This is what we call the inflection point.

Speaker Change: Beyond that we can leverage our powerful platform to support more than just one brand.

Speaker Change: We know that with our capabilities, we can do more.

Speaker Change: We have built a platform that can power, a bigger and broader business generate synergistic growth and margin expansion and deliver significant value creation over time.

Speaker Change: This is what we call the inflection point.

Carlos E. Alberini: The evolution that I described in our last call. That was to leverage that platform and drive outside growth through our multiple existing brands, through internally developed or segmented brands, or through acquisitions of new products, looking at our core Guess brand. The business remains healthy and has been performing well. It is gratifying to see continued success in mature markets in Europe. In addition to that, we are excited about our growth opportunities in newer markets such as Turkey, the Middle East, India, and Latin America, where the business is enjoying strong momentum.

Speaker Change: The evolution that I described in our last call.

Speaker Change: That was to leverage that platform and drive outsized growth through our multiple existing brands through internally developed our segmented brands or through acquisitions of new brands.

Speaker Change: Looking at our core guests brand the business remains healthy and has been performing well. It is gratifying to see continued success in mature markets in Europe. In addition to that we are excited about our growth opportunities in newer markets, such as Turkey Middle East India.

Speaker Change: In Latin America, where the business is enjoying strong momentum.

Carlos E. Alberini: For our Guess brand, handbags have been instrumental in growing the brand, and we see opportunities for further growth as we expand our footprint. That's why we are pleased to share that Paul has renegotiated the extension of our handbag license, cementing that important partnership until 2039 on very favorable terms. The new contract included a $40 million up-front 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. Raganbon is a great example of this.

Speaker Change: For our guests brand handbags have been instrumental in growing the brand and we see opportunities for further growth as we expand our footprint.

Speaker Change: That's why we are pleased to share that Paul has renegotiated the extension of our handbag license cementing that important partnership until 2039 on very favorable terms.

Speaker Change: 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 gas as well right.

Speaker Change: <unk> is a great example, with this potential.

Carlos E. Alberini: As you know, we have recently launched our Guess? jeans brand and just finished its first sales campaign. An exciting moment for our company. While it harkens to the legacy of the Guess brand, Guess Jeans is a completely new lifestyle brand with its own identity and multi-category assortment. It employs a brand new store concept with its own marketing strategy and advertising campaigns targeting the younger Gen Z customer but welcoming all customers. Guess? Jeans is an environmentally conscious brand that is introducing air wash, an innovative stone washing process for denim that dramatically reduces water consumption.

Speaker Change: As you know we.

Carlos E. Alberini: This, combined with an eco-friendly store environment defined by sustainable store materials, will connect well with its target customers. And with its casual offering and more compelling price point, it fits well within our overall brand and pricing architecture. The brand is already ahead of expectations with wholesale accounts showing great enthusiasm for the brand and product. For example, Galleries Lafayette just featured Guess jeans with a special installation and pop-up at their flagship Paris house and store that included air-washed visual effects, a denim customization station with a special product displayed inside.

Speaker Change: We have recently launched our guests jeans brand and just finished its first sales campaign and exciting moment for our company.

Speaker Change: While the hurricanes to the legacy of the gifts brand guest genes is a completely new lifestyle brand with its own identity and multi category assortment.

Speaker Change: It employs a brand new store concept with its own marketing strategy and advertising campaigns targeting the younger Gen Z customer, but welcoming all customers.

Speaker Change: Guests genes is an environmentally conscious brand that is introducing erewash and innovative strong Washington process for denim that dramatically reduces water consumption.

Speaker Change: This combined with an eco friendly store environment defined by sustainable store materials will connect well with its target consumer.

Speaker Change: And with its casual offering and more compelling price points, it fits well within our overall brand and pricing architecture.

Speaker Change: The brand is already ahead of expectations with wholesale accounts showing great enthusiasm for the brand and product.

In France <unk>.

Carlos E. Alberini: They also featured our first Guess Jeans advertising campaign on the facade of the iconic store, which is located in a very high traffic area in Paris. Also in June, Italian department store chain La Rinascente plans to do a special guest jeans presentation at its flagship store on Corso Vittorio Emanuele in Milan, under the direction of Nicolai Marciano. We have just completed the first Guess Jeans advertising campaign featuring English fashion model and actress Iris Law, the daughter of actor Jude Law.

Speaker Change: <unk> Lafayette, Jeff featured guests genes with especial installation on pop up at their flagship Paris House, one store that include Erewash visual effects.

Speaker Change: Denim customization station with a special product displays and signage.

Speaker Change: They also featured our first guests jeans advertising campaign on the facade of the iconic store, which is located in a very high traffic area in Paris.

Speaker Change: Also in June Italian Department store chain Levering Ashanti plans to do a special guest jeans presentation in its flagship store on Corso Vittorio Emanuele in Milan.

Speaker Change: Under the direction of Nicolai Marciano.

Speaker Change: We just completed the first gas jeans advertising campaign, featuring English fashion model and actress Irish law, the daughter of actor Jude law.

Carlos E. Alberini: We believe her imprints will help expand the reach of the Guess Jeans brand globally online, in print, and across social media. Also, for the third year during Coachella weekend, Guess Jeans hosted celebrity guests and brand ambassadors in a luxury compound. The weekend included multiple after-parties hosted by top performing artists Anderson Paak, Metro Boomin, and Kate Renata, with a star-studded guest list including Billie Eilish, I Spice, J Balvin, Robert Pattinson, Justin and Hailey Bieber, and more.

Speaker Change: We believe her in France will help expand the reach of the guests jeans brand globally online and print and across social media as well.

Also for the 30 year during Coachella weekend guests James hosted celebrity guests and brand ambassadors and our luxury compounded forms the.

Speaker Change: The weekend included multiple after parties hosted by top performing artists under some pack metro booming and K Fernanda without starts started guest list, including Billy Irish I Spice, Jay Baldwin, Robert patents on Justin and Hailey Bieber and more.

Carlos E. Alberini: The event proved enormously successful, resulting in nearly 4 billion impressions and 58 million views. As you know, we completed our acquisition of Rag & Bone in Q1 through a partnership with WHB Global. Rag and Bone is already a quarter billion dollar business. The 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 aspiring consumer base. This nicely complements our existing business. Ragonbone also brings with it an experienced and talented management team led by Andrew Rosen. Paul and I want to welcome them all to the Guess?

Speaker Change: The event proved enormously successful, resulting in nearly 4 billion impressions and 58 million views.

Speaker Change: As you know we completed our acquisition of Ragen borne in Q1 through our partnership with <unk> HP Global.

Speaker Change: Reagan bond is already a quarter billion dollars business.

Speaker Change: Heritage brand with proven longevity with our diverse product offering for both women and men commanding premium pricing and margins and appealing to our highly affluent consumer base.

Speaker Change: This nicely complements our existing business.

Speaker Change: <unk> also brings with it an experienced and talented management team led by Andrew Rosen.

Speaker Change: Paul and I want to welcome them all to the guest family.

Carlos E. Alberini: We hope you also saw that on Tuesday, we announced Andrew's appointment as Rag & Bone's Executive Chair. Andrew is a visionary in American fashion and has been involved with Rag & Bone since 2006. He brings a wealth of experience and expertise to the brand, providing strategic direction and oversight to drive the brand's mission forward. It's only been a couple of months, but our teams are already working well together. Paul has been highly engaged with Andrew and the Raganbon team, along with our licensees and our country management teams, to begin executing our ambitious agenda to grow the business with new product categories and international expectations.

Speaker Change: We hope you also saw that on Tuesday, we announced Andrews appointment as ragen bonds executive chair.

Speaker Change: Andrew is a visionary and American fashion and has been involved with Reagan bond since 2006, he brings a wealth of experience and expertise to the brand providing strategic direction and oversight to drive the brand's mission forward.

Speaker Change: It's only been a couple of months.

Speaker Change: But our teams are already working well together.

Speaker Change: Paul has been highly engaged with Andrew and the <unk> team, along with our licensees and our country management teams to begin executing our ambitious agenda to grow the business with new product categories and international expansion.

Carlos E. Alberini: We are already advertising the brand in existing and new markets, and we are actively looking for new store locations, including key cities in Europe. 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, turning to a focus on product. During the quarter, we made significant progress to reduce our SKU development count in our global apparel lines, with a goal to achieve a 30% reduction. We have also tightened the assortment in our retail stores to concentrate our buys into fewer SKUs to increase productivity and service levels.

Speaker Change: We are already advertising the brand in existing and new markets and we are actively looking for new store locations, including key cities in Europe.

Speaker Change: As Reagan bond continues to operate as an independent fashion brands together, we can help to optimize their operations by sharing resources and leveraging scale, including sourcing opportunities.

Speaker Change: Turning to our focus on product during.

Speaker Change: During the quarter, we made significant progress to reduce our SKU development count in our global apparel lines with a goal to achieve a 30% reduction.

Speaker Change: We have also tightened the assortment in our retail stores to concentrate our buys into fewer skus to increase productivity and service levels.

Carlos E. Alberini: In addition, we continue to refine and perfect our pricing structure by focusing on the customer's perceived value for each and every product. Beyond creating value by growing our business and optimizing our product offering, pricing, and the way we buy, we are focused on continuous improvement in everything we do to drive efficiencies in our operation. To support this goal, the transition to a third-party provider to operate our U.S. distribution center is well underway.

Speaker Change: In addition, we continue to refine and perfect our pricing structure by focusing on the customers' perceived value for each and every product.

Speaker Change: Beyond creating value by growing our business and optimizing our product offering pricing and the way. We buy we are focused on continuous improvement in everything we do to drive efficiencies in our operations.

Carlos E. Alberini: We selected GXO Logistics, which has been our distribution partner in Europe for many years. The transition, which is going smoothly, should help reduce costs as well as improve service levels. We have launched a process to sell that facility, with GXO leasing it back to operators.

Speaker Change: To support this goal the transition to a third party provider to operate our U S distribution center is well underway.

Speaker Change: We selected Gx salt logistics, which has been our distribution partner in Europe for many years.

Speaker Change: Transition, which is going smoothly should help reduce costs as well as improved service levels.

Speaker Change: We have launched a process to sell that facility with <unk> leasing it back to operator.

Carlos E. Alberini: We expect the self-transaction to be finalized before the end of the third quarter. Turning to our art look. Consistent with our previous guidance, we expect strong revenue growth to exceed $3 billion this year for the first time ever and to deliver nearly $3 in adjusted earnings per share. Before I hand off to Mark, I want to share my personal reflection and what has me so excited about our company and our future. I have been back now for a little more than five years.

Speaker Change: We expect further sale transaction to be finalized before the end of the third quarter. This year.

Speaker Change: Turning to our outlook.

Speaker Change: System with our previous guidance, we expect strong revenue growth to exceed $3 billion. This year for the first time ever and to deliver nearly $3 in adjusted earnings per share.

Speaker Change: Before I hand off to markets.

Speaker Change: Let me share my personal reflection on what has me so excited about our company and our future.

Speaker Change: I have been back now a little more than five years and so much has changed and that includes with me.

Carlos E. Alberini: And so much has changed, and that includes me. Because when I returned in 2019, I brought with me the perspective that I left with in 2010. I was laser focused on growing the Guess brand, a successful brand well known for over 40 years and already well distributed in over 100 countries. I still strongly believe that there are growth opportunities for Guess and great things to come. What I have come to realize, though, is that, arguably... Our most valuable asset is the powerful machine, this platform that we have built that broadcasts to the precipice of a $3 billion global brand. What started with Paul and his brother's vision for Guess? we can do with others, either developed internally or acquired from others. That's the inflection point.

Speaker Change: Because when I returned in 2019 I brought with me the perspective that I left with in 2010.

Speaker Change: Laser focused on growing the guess brand a successful brand well known for over 40 years and already well distributed in over 100 countries.

Speaker Change: I still strongly believe that there are growth opportunities for guests and great things to come.

Speaker Change: What I have come to realize though is that arguably.

Speaker Change: Our most valuable asset is the powerful machine. This platform that we have built that broadcast to the precipice of a $3 billion global brands.

Speaker Change: What started with Paul and his brothers vision for gas, we can do with other brands either developed internally or acquired from others.

Speaker Change: That's the inflection point.

Carlos E. Alberini: Recognizing that this company is more than just one brand; it is that platform. Our Expansive Global Footprint, Broad Channels Capability, Diverse Category Portfolio, and strong management team. That's a powerful arsenal. Not easy to replicate, but so adaptable.

Speaker Change: Recognizing that this company is more than just one brand is that platform.

Speaker Change: Our expansive global footprint broad channel capabilities.

Speaker Change: Extensive supply chain diverse category portfolio and strong management team, that's a powerful arsenal not easy to replicate but so adaptable.

Carlos E. Alberini: We wake up every day energized by the belief that we can do things that others simply cannot do. Take a regional brand and make it global, turn a single category brand into a lifestyle brand, to make something exponentially bigger because we can grow it across multiple dimensions. We are off to a great start with Dragon Bone, and Guess Genius already has a solid track record. Our strong start to the year reinforces our belief and our passion.

Speaker Change: We wake up every day energized by the belief that we can do things that others simply cannot do.

Speaker Change: To take a regional brand and make it global.

Speaker Change: To turn a single category brand into a lifestyle brand.

Speaker Change: To make something exponentially bigger because we can grow it across multiple dimensions.

Speaker Change: We are off to a great start with rag and bone and guest Jean's already has solid traction.

Speaker Change: Our strong start to the year reinforces our belief and our passion.

Carlos E. Alberini: We have a strong capital structure, and we are careful stewards of our shareholders' capital, so we will move prudently, learn as we go, and course correct when necessary. But I'm even more enthusiastic now than I was in 2019. And I couldn't be more excited and confident in our ability to drive outsized growth with this platform and create outsized value for our service. And with that, I will pass the call to Markus. Markus, please go ahead.

Speaker Change: We have a strong capital structure and we are careful stewards of our shareholders' capital. So we will prudently learn as we go and course correct when necessary.

Speaker Change: But I'm, even more enthusiastic now than I was in 2019, and I couldnt be more excited and confident in our ability to drive outsized growth with this platform and create outsized value for our shareholders.

Speaker Change: And with that I will pass the call to Mark markets. Please go ahead.

Markus Neubrand: Thank you, Carlos, and good afternoon, everyone. I want to echo Carlos' sentiments about our quarter. Our team performed very well, resulting in higher than expected revenues. On April 2nd, 2024, we completed the Rag & Bone acquisition and have integrated DragonBone into our existing.

Mark: Thank you Carlos and good afternoon, everyone.

Mark: I want to echo Carlos sentiment about our quarter.

Mark: Our team performed very well, resulting in higher than expected revenues adjusted operating margin and a lower adjusted loss per share than we had anticipated.

Mark: On April <unk> 2024, we completed to reconcile one acquisition and have integrated <unk> into our existing segments.

Markus Neubrand: Let me take you through our first quarter results in more detail. Total company revenues in the first quarter grew by 4% in U.S. dollars and 7% in constant currency, with the Europe and licensing segments performing better than expected, partially offset by lower than anticipated revenues in our Americas region. Compared to last year's first quarter, Rag & Bone accounts for four points of the total company revenue growth in concert. Turning to our segment performers, starting with Europe, where we posted a 1% revenue increase in US dollars and 7% in concentration. Retail comps, including e-commerce, increased 4% in U.S. dollars and 9% in concentration, as in the past few quarters.

Mark: Let me take you through our first quarter results in more detail.

Mark: Total company revenues in the first quarter grew by 4% in U S dollars and 7% in constant currency with the Europe and licensing segments performing better than expected, partially offset by lower than anticipated revenues in our Americas retail segment.

Mark: Compared to last year's first quarter Ragen bone accounts, four full points and our core business for three points of the total company revenue growth in constant currency.

Mark: Turning to our segment performance, starting with Europe, where we posted a 1% revenue increase in U S dollars and 7% in constant currency.

Mark: Retail comps, including E Commerce increased 4% in U S dollars and 9% in constant currency.

Mark: As in the past few quarters.

Markus Neubrand: Turkey's hyperinflation had a meaningful impact on retail comps, including e-commerce, and excluding Turkey, that retail comp increase and constant currency would have been for. A key driver for revenue growth in the quarter was strong store-comparable revenue growth of 12% in concept. While traffic declined modestly, our teams drove AUR growth and a higher conversion rate. Key actions we took over the last six months continue to benefit our performance, including improved assortment, replenishment, and better capacity. However, improving from the fourth quarter trend, our e-commerce comps declined by 1% in constant currency compared to Q1 of last year.

Mark: Turkey type of inflation had a meaningful impact on our retail comps, including e-commerce and excluding Turkey.

Mark: <unk> retail comp increase in constant currency would have been 4%.

Mark: A key driver for the revenue growth in the quarter was a strong store comparable revenue growth of 12% in constant currency.

Mark: While traffic declined modestly our teams drove AUR growth and a higher conversion.

Mark: Key actions, we took over the last six months continued to benefit our performance, including improved assortments replenishment and better customer experience.

Mark: Improving from fourth quarter trends.

Mark: Our e-commerce comps declined by 1% in constant currency compared to Q1 of last year.

Markus Neubrand: Our revenues in European wholesale increased by a low single digit in constant currency. This was partially driven by earlier than anticipated shipments to wholesale accounts, which welcomes our product to support good sales momentum in the. The operating margin in our European business decreased by 80 basis points to negative 0.2%. [inaudible] Revenues for America's retail increased roughly half a percent in U.S. dollars and remained roughly flat in concentration. The decline in retail comps in our core business in the U.S. and Canada was offset by the addition of rag and bone and robust retail comps in Mexico.

Mark: Our revenues in European wholesale increased low single digit in constant currency.

Mark: This was partially driven by earlier than anticipated shipments to wholesale accounts that welcomed our product to support good sales momentum in that businesses.

Mark: The operating margin in our European business decreased by 80 basis points to negative <unk>, 2%.

Mark: Due to higher expenses and currency headwinds, partially offset by higher revenues and improved initial markups.

Mark: Revenues for Americas retail increased roughly half a percent in U S dollars and main remained roughly flat in constant currency.

Mark: The decline in retail comps in our coal business in the U S and Canada was offset by the addition of rag and bone and robust retail comps in Mexico.

Markus Neubrand: American retopcomps, including e-commerce, in our U.S. and Canada stores fell by 12% in constant currency as a result of lower levels of traffic and conversion. As Carlos mentioned, we are taking action to improve our performance. Our US and Canada Ecom comparable revenues decreased by 1% compared to Q1 of last year.

Mark: American retail comps, including e-commerce.

Mark: Climbed 8% in constant currency.

Mark: In our U S and Canada stores comp fell by 12% in constant currency as a result of lower levels of traffic and conversion.

Speaker Change: As Carlos mentioned, we are taking action to improve our performance.

Speaker Change: Our U S and Canada E com comparable revenues decreased by 1% compared to Q1 of last year.

Markus Neubrand: Lower traffic to our website was partially offset by business initiatives that drove a higher conversion rate. America's retail posted a negative 7.2% operating margin, a roughly five point decrease in operating margin compared to last year. It was driven by the unfavorable impact of lower stock coms and higher expenses, partially offset by lower markdowns and a higher IMF. [inaudible] However, revenues increased by 21% in U.S. dollars and 18% in constant currency, mainly driven by the first-time consolidation of Reagan.

Speaker Change: Lower traffic to our website was partially offset by business initiatives that drove a higher conversion rate.

Speaker Change: Americas retail posted a negative seven 2% operating margin.

Speaker Change: The five point decrease in operating margin compared to last year, which was driven by the unfavorable impact from lower stock comps and higher expenses, partially offset by lower markdowns and a higher IMU.

Speaker Change: In Americas wholesale.

Speaker Change: Revenues increased by 21% in U S dollars and 18% in constant currency, mainly driven by the first time consolidation of Rag and bone.

Markus Neubrand: Operating margin reached 22.7%, a decrease of 280 basis points from last year's first quarter, mainly driven by the impact of new acquired businesses. In Asia, revenue grew 3% in U.S. dollars and 7% in constant growth. Revenue growth was mainly driven by our new business in India and e-commerce in China. Retail comps, including e-commerce for the region, decreased 5%. In concert, operating margin in Asia decreased 30 basis points to 5.1%.

Speaker Change: Operating margin reached 22, 7% a decrease of 280 basis points from last year's first quarter, mainly driven by the impact of new acquired businesses.

Speaker Change: In Asia revenue grew 3% in U S dollars and 7% in constant currency.

Speaker Change: Revenue growth was mainly driven by our new business in India and E Commerce in China.

Speaker Change: Retail comps, including e-commerce for the region decreased 5% in constant currency.

Speaker Change: Operating margin in Asia decreased 30 basis points to five 1% higher.

Markus Neubrand: Higher revenues were offset by lower product margins and higher... And finally, our licensing segment had a strong quarter and exceeded our expectations, with revenues increasing 21% in both U.S. dollars and constant currency. The first border benefited from the amortization of the up-front payment for the handbag license; segment operating margin was 92%, and operating profit increased by. In Q1, total company gross margin reached 41.9%, up 120 basis points from a year earlier, mainly driven by higher revenues, improved IMUs, and lower markdowns, partially offset by higher. Adjusted SG&A expense for the quarter increased 11% to $256 million. The increase was mainly due to rag and bone and investments in marketing and infrastructure, especially in Europe. For the quarter, our adjusted SG&A rate increased 2.8 points to 43.2.

Speaker Change: Higher revenues were offset by lower product margins and higher expenses.

Speaker Change: And finally, our licensing segment had a strong quarter and exceeded our expectations with revenues, increasing 21% in both U S dollars and constant currency.

Speaker Change: The first quarter benefited from the amortization of the upfront payment for the handbag license renewal.

Speaker Change: Segment operating margin was 92% and operating profit increased by 20%.

Speaker Change: In Q1 total company gross margin reached 41, 9% up 120 basis points from a year earlier, mainly driven by higher revenues improved unused and lower markdowns, partially offset by higher expenses.

Speaker Change: Adjusted SG&A expense for the quarter increased 11% to $256 million.

Speaker Change: The increase was mainly due to ragen bone and investments in marketing and infrastructure, especially in Europe.

Speaker Change: For the quarter, our adjusted SG&A rate increased two eight points to 43, 2%.

Markus Neubrand: In the quarter, our adjusted operating margin for the company decreased 160 basis points to a negative 1.3%, driven by high expenses and an unfavorable impact on current. In the quarter, we further reported non-operating net income of $36 million. This includes a net non-cash gain due to re-measurements of derivatives related to our convertible nodes and related tasks. With the completion of the convertible notes exchange transactions earlier this year, the accounting treatment changed to fair value, resulting in a non-operating, non-cash gain or loss.

Speaker Change: In the quarter, our adjusted operating margin for the company decreased 160 basis points to a negative one 3% driven by higher expenses and an unfavorable impact from currencies.

Speaker Change: Offset by higher revenues and IMU.

Speaker Change: In the quarter, we further reported non operating net income of $36 million.

This includes a net noncash gain due to re measurement of derivatives related to our convertible notes and related tax.

Speaker Change: With the completion of the convertible notes exchange transactions earlier this year, the counting treatment change to fair value.

Speaker Change: Resulting in a non operating non cash gain or loss.

Speaker Change: Further our GAAP corporate overhead expenses in the quarter were impacted by $11 million of charges related to Iraq and bond transaction.

Speaker Change: And the transition of our Kentucky distribution center to a third party provider.

Speaker Change: And we recorded an adjusted effective tax rate of 12, 3%.

Speaker Change: Adjusted Q1 diluted loss per share was <unk> 27.

Speaker Change: <unk> two seven tenths of loss per share in last year's first quarter.

Markus Neubrand: Moving to the balance, our inventories were $555 million at the end of the quarter. Excluding Rag and Bone, our core inventories were down 4% in US dollars and 1% in constant currency compared to last. Underscoring our disciplined approach, For the quarter, capital expenditures were roughly $20 million, mainly driven by investments in storage models, technology, and the acquisition of certain assets in Chile and Peru. We ended the quarter with $243 million in cash, compared to $299 million a year ago.

Speaker Change: Moving to the balance sheet.

Speaker Change: Our inventories were $555 million at the end of the quarter.

Speaker Change: Excluding <unk>, our core inventories were down 4% in U S dollars and 1% in constant currency compared to last year underscoring our disciplined inventory management.

Speaker Change: For the quarter capital expenditures were roughly $20 million, mainly driven by investments in store Remodels technology, and <expletive> precision of certain assets in Chile and Peru.

Speaker Change: We ended the quarter with $243 million in cash.

Speaker Change: Compared to $299 million a year ago.

Markus Neubrand: The most significant drivers of that $56 million cash consumption over the last four quarters include $234 million of free cash flow, which includes $40 million of upfront payment in connection with the handbag license renewal, more than offset by $185 million in dividends and the Rag & Bone acquisition of $57 million. $31 million in share repurchases and $12 million in minority capital gains. We ended the quarter with a total of $279 million of borrowing capacity on our various global facilities.

Speaker Change: The most significant drivers of that $56 million of cash consumption over the last four quarter include $234 million of free cash flow, which includes $40 million of upfront payment in connection with the handbag license renewal more than offset by a 185.

Speaker Change: And dividend.

Speaker Change: The <unk> acquisition of $57 million.

Speaker Change: $31 million in share repurchases and $12 million in minority capital distributions.

Speaker Change: We ended the quarter with a total of $279 million of borrowing capacity on our various global facilities.

Markus Neubrand: So roughly $520 million of available liquidity. As Carlos mentioned, we issued a special dividend of $2.25 per share to our shareholders, while also repaying $33 million in 2024 convertible notes due in April. Furthermore, in connection with the closing of the Rag & Bone acquisition, we increased the borrowing capacity of our asset-based revolving credit facility in North America by roughly $50 million. We also exchanged an additional tranche of our 2024 convertible notes, which had been due last month, deferring $15 million of maturities in 2020.

Speaker Change: So roughly $520 million of available liquidity.

Speaker Change: As Carlos mentioned, we issued a special dividend of $2.25 per share to our shareholders. While also repaying $33 million in 2024 convertible notes due in April.

Speaker Change: Furthermore, in connection with the closing of the reckon bone acquisition, we increased the borrowing capacity of our asset based revolving credit facility in North America by roughly $50 million.

Speaker Change: We also exchanged an additional tranche.

Speaker Change: Of our 2024 convertible notes, which had been <unk> last month's deferring $15 million of maturities in 2028.

Markus Neubrand: We are very pleased with our free cash flow for the last 12 months, which improved by more than $100 million compared to the prior year. That performance resulted from both our careful working capital management as well as sizable cash infusions from non-recurring sources. Turning to our outlook for fiscal year 2025, our view of the year is consistent with what we shared with you back in August. We continue to expect a cautious consumer whose shopping is affected by external factors like inflation.

Speaker Change: We are very pleased with our free cash flow for the last 12 months, which improved more than $100 million compare.

Speaker Change: Compared to the prior period.

Speaker Change: That performance resulted from both our careful working capital management.

Speaker Change: As well our sizable cash infusions from nonrecurring events.

Speaker Change: Turning to our outlook for fiscal year 2025.

Speaker Change: Our view of the year is consistent with what we shared with you back in March.

Speaker Change: We continue to expect the cautious consumer who's.

Speaker Change: Shopping is affected by external factors like inflation.

Speaker Change: Credit availability and higher interest rates.

Markus Neubrand: In our core retail business in the US and Canada, our traffic headwinds, As Carlos described earlier, we are working on initiatives to drive improvements in the. In Europe, we expect our business to remain. The addition of Rag and Bone will contribute to a substantial portion of this year's growth for the total company. And, as always, given the diversification of our model. We will remain agile to react quickly to new developments, including both opportunities and challenges.

Speaker Change: In our core retail business in the U S and Canada or <unk>.

Speaker Change: Traffic headwinds persist.

Speaker Change: As Carlos described earlier, we are working on initiatives to drive improvements in this business.

Speaker Change: In Europe, we expect our business to remain strong.

Speaker Change: The addition of Rag and bone will contribute to a substantial portion of this year's growth for the total company.

Speaker Change: And as always given the diversification of our model.

Speaker Change: We will remain agile to react quickly to new developments, including both opportunities and challenges.

Markus Neubrand: For the fiscal year 2025, we now expect revenues will increase in the range of 10.7 to 12.7% in U.S. dollars. This is netting off a one and a half point headwind because of last year's extra week and the one point currency headwind, given the current situation. Currency headwinds should ease in the latter half of fiscal 2025.

Speaker Change: For the fiscal year 2025, we now expect revenues will increase in the range of 10, seven to 12, 7% in U S dollars.

Speaker Change: This is net of one five point headwind because of last year's extra week end.

Speaker Change: And a one point currency headwind given prevailing exchange rates.

Speaker Change: Currency headwinds should ease in the latter half of fiscal 2025.

Markus Neubrand: Given the Red Sea disruption, we continue to expect headwinds from inbound flights, and our plans to support our growth initiatives by investing in marketing and infrastructure remain. Based on these assumptions for the full year, we expect an adjusted operating margin between 7.7 and 8.5% and adjusted earnings per share in the range of $2.62 to $3. For the second quarter, we expect revenues will increase in the range of 9 to 11 percent in U.S. dollars, despite currency headwinds.

Speaker Change: Given the Red Sea disruption, we continue to expect headwinds from inbound freight costs.

Speaker Change: And our plans to support our growth initiatives by investing into marketing and infrastructure remain in place.

Based on these assumptions for the full year.

Speaker Change: We expect an adjusted operating margin between seven seven and eight 5%.

Speaker Change: And adjusted earnings per share in the range of $2.62 to $3.

Speaker Change: For the second quarter, we expect revenues will increase in a range of 9% to 11% in U S dollars.

Markus Neubrand: I expect it to have a net adverse impact on revenue growth of roughly two points. We expect adjusted operating margin between 5.3% and 6.1% and adjusted earnings per share between 38% and 47%. Overall, we expect revenue growth to accelerate in the third quarter of the year with the first outerwear shipment in North America and an acceleration of the new Guess? Going into the fourth quarter, we expect that revenue growth will be negatively impacted as we will anniversary last year's fiscal year. Turning to the operating model.

Speaker Change: Currency headwinds I expect it to have a net adverse impact on revenue growth of roughly two points.

Speaker Change: We expect adjusted operating margin between five three and six 1% and adjusted earnings per share between <unk> 38 and 47.

Speaker Change: Overall, we expect revenue growth to accelerate in the third quarter of the year with the first outerwear shipments in North America, and an acceleration of the new guest jeans brand.

Speaker Change: Going into the fourth quarter, we expect that revenue growth will be negatively impacted as we will anniversary last year's 50 <unk> week.

Speaker Change: Turning to operating margin.

Speaker Change: We do expect margin pressure to abate in the third quarter when compared with last year.

Speaker Change: The fourth quarter should represent an opportunity for adjusted operating margin expansion.

Speaker Change: Our outlook for free cash flow is unchanged as we anticipate generating a free cash flow of roughly $160 million for the full year.

Speaker Change: Our priority is to invest in our brands and businesses to support sustainable growth.

Speaker Change: We will remain highly disciplined in the way, we allocate capital across projects.

Speaker Change: In closing.

Operator: I've been a part of the Guess family for almost a year now, and I'm proud of our teams that continue executing with excellence, as demonstrated again by our performance last quarter. We have an incredible platform, and our strong capital structure enables us to invest in our future. We are very excited about our prospects for growth. We are focused on data analytics to improve decision making on our journey to achieve operational excellence. Looking forward, our strategic objectives will guide us to drive sustainable, profitable growth and meaningful shareholder growth.

Speaker Change: I've been a part of the guest's family for almost a year.

Speaker Change: I am proud of our teams that continue executing with excellence.

Speaker Change: Demonstrated again by outperformance last quarter.

Speaker Change: We have an incredible platform and our strong capital structure enables us to invest in our future.

Speaker Change: We are very excited about our prospects for growth.

Speaker Change: We are focused on data analytics to improve decision, making on our journey to achieve operational excellence.

Speaker Change: Looking forward, our strategic objective, we will guide us to drive sustainable profitable growth and meaningful shareholder returns.

Operator: And with that, we can now open the call up for questions. Thank you. And as a reminder, to ask a question, simply press star 11 on your telephone and wait for your name to be announced. To remove yourself from the queue, simply press star 11 again.

Speaker Change: And with that we can now open the call up for questions.

Speaker Change: Thank you and as a reminder to ask a question simply press Star one one on your telephone and wait for your name to be announced to remove yourself from the queue simply press star one again.

Carlos E. Alberini: One moment while I compile the Q&A roster. One moment for our first question, and it comes from the line of Mauricio Serna with UBS. Please proceed. Great. Good afternoon, and thanks for taking our questions. First of all, I just wanted to ask about the revenue guidance for the year. I think, you know, you lowered it a little bit, despite a beat in the first quarter. I was wondering if this is mostly related to, maybe, FX being a bigger headwind than previously anticipated.

Speaker Change: One moment, while I compile the Q&A roster.

Speaker Change: One moment for our first question and it comes from the line of.

Speaker Change: Mauricio Serna with UBS. Please proceed.

Mauricio Serna Vega: Great. Good afternoon, thanks for taking our question.

Mauricio Serna Vega: Just wanted to ask on the revenue guidance for the year I think.

Mauricio Serna Vega: You lowered you lowered it a little bit despite a beat on our first quarter.

Mauricio Serna Vega: Was wondering if this is mostly related to maybe like FX being.

Mauricio Serna Vega: A bigger headwind than previously anticipated and then on the margins for the year I think slightly up at the midpoint, you're slightly but is that reflective of like the new the new licensing agreement just trying to reconcile what were the changes in there and then I have another follow up.

Carlos E. Alberini: And then on the margins for the year, I think, you know, slightly up at the midpoint, just slightly, but is that reflective of the new licensing agreement, just trying to reconcile what were the changes in there? And then I have another follow-up. Thank you.

Mauricio Serna Vega: Yes, Hi, Mauricio let me start.

Mauricio Serna Vega: And then.

Speaker Change: Mark is going to complete this but.

Carlos E. Alberini: But just in general, our guidance today and our outlook is very consistent with the previous one that we shared with you about two months ago when we released fourth-quarter earnings. And, yes, of course, we have tweaked the outlook some based on our performance in the first quarter and the trends that we are seeing. So we did tweak some that touched primarily the retail business in the Americas, and also, just a lot of the performance was very positive with respect to what we see in some other businesses that compensate or offset some of the weakness that we saw in the Americas.

Speaker Change: Just in general.

Speaker Change: Our guidance today and our outlook is very consistent with the.

Speaker Change: The previous one that we shared with you about two months ago, when we release fourth quarter earnings and and yes of course with tweaks in the outlook.

Speaker Change: Based on our performance in the first quarter on the trends that we're seeing so we did tweak some.

Speaker Change: Doug touched primarily the retail business in the Americas and and also.

Speaker Change: A lot of the.

Speaker Change: Performance was also.

Speaker Change: Very positive with respect to what we see in some other businesses that are compensated.

Speaker Change: Our offset.

Carlos E. Alberini: In addition to that, we do have some timing issues that have impacted just the wholesale business in Europe, but it's a relatively small piece, and we are seeing a lot of momentum in the growth of that business for the second half of the year, so that is also embedded in our guidance. Your question about licensing, there is a small adjustment to the licensing business because of the renewal of that license, but it's not significant, but it's embedded in the guidance as well. And I think that Markus is going to talk about the currency issue as well, which is impacting us in the first half significantly, but it's supposed to obey in the second half. So, Markus.

Speaker Change: Some of the debt.

Weakness that we saw in the Americas.

Speaker Change: In addition to that we do have some timing issues that impacted.

Speaker Change: So the wholesale business in Europe.

Speaker Change: It is a relatively small piece and we're seeing a lot of momentum in the growth of that business for the second half of the year. So that is also embedded in our guidance.

Speaker Change: Your question about licensing.

Speaker Change: There is a small adjustment to the.

Speaker Change: The licensing business because of the.

Speaker Change: Renewal of that license.

Speaker Change: But it's not significant but it's embedded in the guidance as well.

Speaker Change: And I think that.

Speaker Change: The market is going to talk about the currency issue as well, which is impacting us in the first half significantly, but it's supposed to abate in the second half.

Markus Neubrand: Hi Mauricio. Thank you for your question. Regarding the revenue points, to reiterate what Carlos just said, our guidance is very consistent, and the guidance we gave today is consistent with what we provided previously, with strong revenue growth and also adjusted operating margin, adjusted EPS at the top end of 8.5% and $3 per share. Let me give you a little bit more color on the second quarter based on the guidance we provided today.

Speaker Change: Hi, Mauricio and thank you for your question Rick.

Speaker Change: Regarding the revenue answer reiterate what colors to affect our.

Speaker Change: Our guidance is very consistent.

Speaker Change: I think speaking today.

With what we provided previously with strong revenue growth.

Speaker Change: And also adjusted operating margin and adjusted EPS at the top end of eight 5% and $3 per share.

Let me give you some little bit more color on the second quarter.

Speaker Change: <unk>, which we provided today.

Markus Neubrand: We're expecting U.S. dollar revenue growth between 9 and 11 percent for the second quarter, adjusted operating margin between 5.3 and 6.1 percent, and EPS between 38 and 47 cents. That's consistent with how we were thinking about the second quarter when we got it last time, with only two notable changes.

Speaker Change: We expecting U S dollar revenue growth between nine and 11% for the second quarter adjusted operating margin between five three and six 1%.

Speaker Change: And EPS between $38 47.

Speaker Change: That's consistent with how you were thinking about the second quarter. When we guided last time with only two notable changes.

Markus Neubrand: Carlos touched on, we are pleased with the European wholesale customers having a good sell-out performance, and we anticipated some earlier in the Q1 in the first quarter instead of the second quarter. And then, as Carlos just mentioned and we talked about in prepared remarks, America's retail business has been soft, and these assumptions are now part of our second quarter guidance. And obviously, of course, that's why I wanted to start with the second quarter.

Speaker Change: Carlos touched on.

Speaker Change: We are pleased with the European wholesale customers have a good solid performance and we anticipated some earlier.

Speaker Change: Into Q1 in first quarter and set up the second quarter, and then as Carlos mentioned and we talked about in prepared remarks, the Americas retail business has been soft.

Speaker Change: These assumptions are now part of our second quarter guidance and obviously of course is why I wanted to establish the second quarter. This is impacting the fourth quarter.

Markus Neubrand: This is impacting the fourth quarter and the rest of the year as well. As you think about the quarterly cadence for the back half of the year, we have an opportunity for adjusted operating margin expansion, especially in the fourth quarter. And considering the seasonality of our business, the fourth quarter being the strongest revenue quarter, that's great because it represents the biggest opportunity for adjusted operating profit growth.

Speaker Change: Rest of the year as well.

Speaker Change: As you think about the quarterly cadence for the back half of the year.

Speaker Change: We have opportunity for adjusted operating margin expansion.

Speaker Change: Especially in the fourth quarter.

Speaker Change: And considering the seasonality of our business the fourth quarter being the strongest revenue quarter and thats, great because it represents the biggest opportunity for adjusted operating profit growth.

Markus Neubrand: Very helpful, this caller. Maybe just to elaborate on your comment about Q4, like, what is driving that opportunity for operating margin expansion? And maybe just lastly, if you could elaborate on, you know, what you've done, like, it's very nice to see some of the lower markdowns in America's retail business that you highlighted, like, could you talk a little bit more about what drove that lower markdown activity? Let me first start, and we shared on the Q4 call, what is driving the second half of the year in terms of overall revenue initiatives, where we have The headwinds that we talked about earlier last year, 53rd week, and in the first half of the year, which we expect, I think, also to abate in the second half of this year.

Speaker Change: Okay got it.

Speaker Change: Very helpful color and maybe just to elaborate on the comment about Q4 like what is driving that opportunity in operating margin expansion and maybe just lastly, if you could elaborate on what you've done like it's very nice to see some the lower markdowns in the Americas retail business and you highlighted Mike could you talk a lot more.

Speaker Change: Drove that lower markdown activity.

Speaker Change: Yes.

Speaker Change: Let me first start and we share. It also aligned our Q4 call what is driving the second half of the year in terms of overall revenue.

But we have several concrete initiatives like <unk>, we are indeed.

Speaker Change: India, and Peru, and the internalization of the outerwear and dress category, which stopped shipping in the second half and of course <unk>.

Speaker Change: Headwinds that we talked about earlier.

Speaker Change: Last year's 50, <unk> week and FX in the first half of the year, which we expect I think then also.

Speaker Change: To abate in the second half of this year going back to your question about operating margin and I think what is for the fourth quarter.

Markus Neubrand: Going back to your question about operating margin, and I think what is for the fourth quarter, we see improved for the fourth quarter, improved full-price selling. I think that we as compared to last year's fourth quarter, we had higher markdowns. I think that's also where we see this as an opportunity for improved full-price selling. And we also see, with the timing of the wholesale shipments, and also supported by the good sell-out performance of our partners, we see the fourth quarter benefiting from the timing of the wholesale shipments, and furthermore, third point, with the timing of our advertising spent across the year, this will benefit our fourth quarter operating margin as well.

Speaker Change: We see improved for the fourth quarter improved full price selling I think that we quoted last years.

Speaker Change: Fourth quarter, we had higher markdowns I think Thats also where we see this as an opportunity for improved full price selling.

Speaker Change: We also see with the timing of the wholesale shipments.

Speaker Change: And also supported by the solid performance of our partners.

Speaker Change: See the fourth quarter benefiting from the timing of wholesale shipments and Furthermore, third point.

Speaker Change: The timing of our advertising spend across the year.

Speaker Change: This will benefit our fourth quarter operating margin as well.

Markus Neubrand: And I would add that the addition of Rag & Bone has had a significant impact. This is a business that has a big component of retail as part of the mix of business, and that should be a creative addition to the fourth quarter as well. And you asked the question about margins in general.

Speaker Change: And I would add that the addition of Reagan bone.

Speaker Change: Significantly in fact this is a business that is.

Speaker Change: A big component of retail as part of the mix of business and.

Speaker Change: That should be accretive to the fourth quarter as well.

Speaker Change: And.

Speaker Change: You asked a question about margins in general we have been.

Carlos E. Alberini: You know, we have been very disciplined in the way we have been buying inventory. We are obsessed with trying to read what future demand is going to look like, and then we limit the inventory buys to support that business based on that future customer demand. And it has worked very well for us. We instituted this now a couple, maybe three or four years ago, and we are applying this methodology to every one of our businesses, you know, regardless of region.

Speaker Change: <unk> been very disciplined in the way we have been buying inventory.

Speaker Change: We are obsessed with trying to read what future demand is going to look like and then we are timed.

Speaker Change: Or limiting the inventory buys to support that business based on that future customer demand and it has worked very well for us.

Speaker Change: Instituted this now a couple maybe three or four years ago that we have been doing this.

And we are applying this methodology in every one of our businesses.

Speaker Change: Region and as a result, we can optimize margins in our in.

Carlos E. Alberini: And as a result, we can optimize margins on the sellout because, in every case, we choose to not overbuy, even if that means that we are not going to be maximizing sales. But we are trying to respect our core value about elevating the brand and selling a lot of the products that we buy at full price and avoid discounting at this type of cost of reducing sales, if anything, but having a much healthier business. I got it.

Speaker Change: In this era.

Speaker Change: Because in every case, we have we are we choose to not overbuy.

Speaker Change: Even if that means that we are not going to be maximizing our sales but.

Speaker Change: Trying to respect our.

Speaker Change: Core value about elevating the brand and selling a lot.

Speaker Change: The products that we buy at full price.

Speaker Change: And I've always discounting.

Speaker Change: <unk>.

This type of cost of reducing sales, if anything but having a much healthier business.

Speaker Change: Got it very helpful. Thanks again for other data thank you Marissa.

Carlos E. Alberini: Very helpful. Thanks again for all the details. Thank you, Mauricio. Thank you. And as a reminder, ladies and gentlemen, that is star 11 if you do have a question. One moment for our first, our next question, please, and it comes from the line of Eric Beder with Small Cap Consumer Research. Please proceed. Good afternoon. Congratulations on the acquisition. I want to talk a little bit about Rag and Bone.

Speaker Change: Thank you and as a reminder, ladies and gentlemen that is star one one if you do have a question.

Speaker Change: One moment for our first next question please.

Eric Martin Beder: You mentioned that you're looking for retail space in Europe. I know this brand is not heavily distributed outside the U.S., so how do you look upon expanding this brand into international markets? And also, there are not a lot of stores here or in the U.S. How many do you think, longer term, this brand can support? And when you look, we'll have a follow-up. Yes, thank you Eric for the question. You know, we are just super excited about Rag & Bone. I think that it's very clear.

Speaker Change: And it comes from the line of Eric better with small cap consumer research. Please proceed.

Speaker Change: Okay.

Speaker Change: Good afternoon, congrats on the acquisition.

Eric Martin Beder: I want to talk a little bit around <unk> and Boone.

Speaker Change: You mentioned.

Speaker Change: That you are looking for retail space in Europe.

Speaker Change: I know the spread is not heavily distributed outside the U S. So how do you look upon.

Speaker Change: Expanding this brand into international and also Theres not a lot of source here or in the U S. How many do you think longer term can this brand support and when you look at them.

Speaker Change: We will have a follow up.

Carlos E. Alberini: We just made a big announcement with Andrew Rosen becoming the Rag & Bone chair, and we couldn't be more excited about the team. We couldn't be more excited about the opportunities that we're going to pursue together. So let me start there.

Speaker Change: Yes, Thank you Eric for the question.

Speaker Change: We are super excited about Robert Bohn I think.

Speaker Change: It's very clear, we just made a big announcement with.

Speaker Change: Andrew Rosen.

Speaker Change: I mean the.

Speaker Change: <unk> sure.

Speaker Change: And we couldnt be more excited about the team.

Speaker Change: Couldnt be more excited about the opportunities that we're going to pursue together. So let me start there but we.

Carlos E. Alberini: But you know, we have a lot to do. We see two huge opportunities. One is to really increase the product assortment that the company has operated with. And the second big thing is about making this brand global and, you know, just bringing more into the international landscape. And we are working on both fronts, you know, the two teams are. And 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.

Speaker Change: We have a lot to do we see.

Speaker Change: Two huge opportunities one is to really increase the <unk>.

Speaker Change: Correct Assortments.

Speaker Change: Company has operated with.

Speaker Change: And the second Big thing is about making this brand global just bringing more into the international landscape.

Speaker Change: We are working on both fronts.

Speaker Change: The two teams are and and.

Speaker Change: And we believe that.

Speaker Change: In order to represent the brand appropriately and give us the kind of brand awareness that the brand needs.

Speaker Change: Actually in the <unk>.

Speaker Change: Unlike the European region.

Speaker Change: Definitely need.

Speaker Change: Store presence in some of the key city. So we have been looking into the opportunities that could be available to us. The great thing is that as you know we have a major infrastructure and a great platform at guess and with an amazing team that is representative in multiple centers.

Carlos E. Alberini: So we have been looking into the opportunities that could be available to us. The great thing is that, as you know, we have a major infrastructure and a great platform at Guest and an amazing team that is represented in multiple centers in the European market. And that whole team has been mobilized to really look for this opportunity. Now, you know, we haven't selected anything yet, but you know, we are moving very quickly.

Speaker Change: In the European market and.

That whole team has been mobilized to really look for these opportunities.

Speaker Change: Now just we haven't selected anything yet, but we're moving very quickly and then there is also a big opportunity on the product side to really look at opportunities for.

Carlos E. Alberini: And then there is also a big opportunity on the product side to really look at opportunities for, you know, additional product categories that today may be represented inside the assortment that the brand offers, but that they have, they show an opportunity to be bigger businesses. And we are thinking about a licensing model for some of those categories as well. With respect to stores in the domestic business and market, you're right. I mean, you know, the company has only 34 stores, and we think that there is an opportunity for them to be expanded, you know, in a bigger way. But we are going slowly.

Speaker Change: Additional product categories.

Speaker Change: That today may be representative inside the assortment that <unk> brand offers but but that they have they show.

Speaker Change: An opportunity to be bigger businesses.

Speaker Change: And we are thinking about also licensing model for some of those categories as well.

Speaker Change: With respect to <unk>.

Speaker Change: Stores.

Speaker Change: In the domestic business and market.

Speaker Change: You are right I mean, the company has only 34 stores.

Speaker Change: Yes.

Speaker Change: We think that there is an opportunity to be expanded.

Speaker Change: And in a bigger way.

Speaker Change: But we are going slowly the great thing is that.

Carlos E. Alberini: The great thing is that this company did not have full access to capital in the past, you know, under previous ownership. And we think that we can provide that. So there is a lot more flexibility to move into that type of expansion, but we are going to go slowly.

Speaker Change: This company did not have full access to capital in the past.

Speaker Change: The previous ownership and we think that we can provide that so there is a lot more flexibility to move into that type of expansion, but we are going to go slowly and again this is.

Carlos E. Alberini: And again, this is, you know, just Andrew Rosen and the team are thinking about all these things. We are working on putting a new plan together. But, you know, things are going to take some time, and we're going to move carefully and be very judicious with the way we employ capital. The great thing is that their retail business is highly successful. You know, they just have great productivity in the stores that they do have.

Andrew Rosen: Just Andrew Rosen.

Andrew Rosen: The teams are thinking about all of the things we're working on putting a new plan together, but you know how things are going to take some time and we're going to move carefully and.

Andrew Rosen: B B.

Andrew Rosen: Judy.

Andrew Rosen: Judicious with the way, we deploy capital the great thing is that.

Andrew Rosen: The retail business is highly successful.

Andrew Rosen: Just they have.

Andrew Rosen: Great productivity in the stores that they do have I think at every single store is producers.

Carlos E. Alberini: I think that every single store generates positive cash flow, and we would expect that that type of experience will be replicated with new stores. Of course, we have incredible relationships with landlords, and that is also the case with Andrew and the team at Dragon Bone.

Andrew Rosen: Positive cash flow and.

We would expect that that type of.

Andrew Rosen: This will be replicated with new stores.

Andrew Rosen: Of course, we have incredible relationships with landlords.

Speaker Change: It is also the case with Andrew and his team are driving inbound and we are working together to really maximize those relationships and make sure that we are.

Carlos E. Alberini: And we are working together to really maximize those relationships and make sure that we are just teaming up on things that are important to the brand and growth. So we couldn't be more excited. And I know that it's reasonably early.

Speaker Change: Yes, just teaming up on things that are important to the brands and the growth. So we couldnt be more excited I know that is reached if.

Speaker Change: Reasonably early.

Speaker Change: Product seems to be working really well in our just our partners and I'm talking about department stores and other people that are buying the brand.

Carlos E. Alberini: The product seems to be working really well. Just our partners, I'm talking about department stores, and the people that are buying the brand are super excited about the collections. And as a result, we see a very nice trend in our wholesale business, and that should also translate into the retail business when the same product is sold at the point of sale in retail. The same thing with the e-commerce business. So we're all very happy and excited about the future for the brand and for us together. Right, just a quick follow-up.

Speaker Change: Super excited about the collection and <unk>.

Speaker Change: As a result, we see a very nice trend in our wholesale business.

Speaker Change: That should also translate into.

Speaker Change: The retail business on the same product base.

Speaker Change: So.

Speaker Change: The point of sale in our own retail same thing with the ecommerce business. So overall very very happy and excited about the future for the brands for a path together.

Speaker Change: Great just a quick follow up so for.

Carlos E. Alberini: So, you know, for the first time, you talked about the platform being leveraged for other brands and being able to take it, like Rag & Bone, to kind of the next level. Now, when you look out longer term, three, four, six, whatever amount of years, do you see Guess as kind of this multi-branded platform that leverages its worldwide connections to have like three or four of these different brands? And I guess that acquisition, or is that a combination of acquisition and internal like you're doing with Guess Genes?

Speaker Change: For the first time, you talked about the platform being levered.

Speaker Change: Their brands and being able to take it Mike ranking bill to kind of the next level.

Speaker Change: When you look out longer term here.

Four six whenever amount of years.

Speaker Change: You see gas as kind.

Speaker Change: This multi branded.

Speaker Change: <unk> leverages its worldwide connections to have like three or four of these different brands.

Speaker Change: And I guess is that acquisition or is that a combination of acquisition and internal like youre doing with cash change. Thank you.

Eric Martin Beder: Thank you. Yes, thank you, Eric. Yes, no, I mean, we do believe that the power of this platform is pretty significant. And we do think that there is an opportunity here to bring other businesses through that platform, you know, whether it's internally developed brands or segmented brands. You know, just the Guess Jeans example is a great one where, you know, it's not something that we necessarily fully develop because it is absolutely anchored in our heritage and what Guess, you know, just has in its DNA.

Eric: Yes, Thank you Eric yes.

Speaker Change: Yes, no I mean.

Speaker Change: We do believe that the power of this platform is pretty significant and.

Speaker Change: And we do think that there is an opportunity here to bring other businesses through that platform, whether it's from internally developed.

Speaker Change: Our brands are segmented brands.

Speaker Change: The biggest <unk> example is a great one where it's not something that we necessarily fully developed but because it is absolutely anchored in our heritage.

Eric Martin Beder: But it's a separate brand, and it's definitely an incremental business, which, by the way, is doing very, very well. And we are excited about the opportunity for growth with that brand. But that is just an example.

Speaker Change: Guess.

Speaker Change: This has in its DNA.

Speaker Change: It's a separate brands.

Speaker Change: Definitely on incremental business, which by the way is doing very very well and we are excited about the opportunities for growth with that brand.

Speaker Change: But that is just an example of Reagan bone is another great example of where we can use the platform has been built over the last 43 years since Paul and his brother started the business.

Carlos E. Alberini: Dragon Bone is another great example of using the platform that has been built over the last 43 years since Paul and his brother started the business, you know, just to be able to really optimize and grow those different businesses. I think that it would be super premature to start thinking about, okay, you know, now we're going to add another one and another one. I think that right now we are fully focused on, you know, just growing our core business, which is a big one but offers a lot of opportunities. And we are definitely putting a lot of energy into the Dragon Bone acquisition strategy. The good thing is that that brand is being managed as an independent brand and is autonomous. And we have a great team.

Yes.

Speaker Change: Being able to really optimize and grow those those different businesses.

Speaker Change: I think that it will be super premature to start thinking about okay. Now now we're going to add another one and another one I think.

Speaker Change: Right now we are fully focused on.

Speaker Change: Just.

Speaker Change: Growing our core business, which is a big one but offers a lot of opportunities and we are definitely putting a lot of energy into the rag <unk> bone.

Speaker Change: Our acquisition strategy.

Speaker Change: The good thing is that that brand is being managed as an independent brand and autonomous.

Carlos E. Alberini: So, you know, just while obviously we want to coordinate activities and work together and weigh in on the strategic direction that the brand has and the company, you know, we are giving, you know, just a lot of power and decision-making opportunities, you know, just opportunities for the team to do their job. And we are very happy with that because, again, the team is super strong. So, we want this to be successful before we think about the next one and the next one.

Speaker Change: We have a great team so well.

Speaker Change: Obviously, we wanted to coordinate activities and work together and weigh in on the strategy the strategic direction of the brand has on the company.

Speaker Change: We are giving just a lot of power and decision making.

Speaker Change: Just opportunities to the team to do their job and we are very happy with that because again the team is super strong.

Speaker Change: We want this to be successful before we think about the next one and an excellent.

Carlos E. Alberini: But, you know, don't think that that means that we don't think that, you know, other brands could be incorporated into this portfolio. We believe strongly that that will be the case, but we want to make every move with a lot of care, a lot of attention, and a lot of energy. And that's what we're doing. Thank you.

Speaker Change: Yes.

Speaker Change: Don't think that that doesn't mean that that means that we don't think that that.

Speaker Change: Yes.

Speaker Change: Other brands could be incorporated into this portfolio. We believe strongly that that will be the case, but we wanted to.

Speaker Change: Take every move with a lot of care a lot of attention.

Speaker Change: A lot of energy and Thats what were doing.

Speaker Change: Yes.

Speaker Change: Thank you.

Carlos E. Alberini: And with that, I will conclude the Q&A session and turn it back to Carlos Alberini for closing comments. Thank you very much, Operator. Well, thank you all for your participation today. We are very pleased with our performance, and we are very excited about our future. Our team is energized to grab what I call our inflection point opportunity and take our company to the next level of growth and profitability. You know, I speak on behalf of Paul and myself in saying that we have a great team and it's very exciting to be part of this journey together right now. So thank you all for all your support for our company and our story, and we'll speak to you again soon. Have a great day.

Speaker Change: And with that I will conclude the Q&A session and turn it back to colors are there any for closing comments.

Speaker Change: Thank you very much operator, well. Thank you all for your participation today, we are very pleased with our performance and we are very excited about our future.

Our team is energized to grab what I call, our inflection point opportunity.

Speaker Change: Take our company to the next level of growth and profitability.

Speaker Change: I know I speak on behalf of Paul and myself.

Speaker Change: In saying that we have a great team and it's very exciting.

Speaker Change: Exciting to be part of this journey together right now so thank you all for all your support for our company and our story and we will speak again soon have a great day.

Operator: Thank you. And with that, we conclude our conference call. Thank you all for participating, and have a great day.

Speaker Change: Thank you and with that we conclude our conference call. Thank you all for participating and have a great day.

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Operator: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? [inaudible] ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE ULTIMATE, Good day, everyone, and welcome to the Guess first quarter fiscal 2025 earnings conference call. I would like to turn the call over to Fabrice Benarouche, Senior Vice President of Finance and Investor Relations and Chief Accounting Officer. Please go ahead.

Fabrice Benarouche: Thank you, Operator. Good afternoon, everyone, and thank you for joining us. On the call today with me are Carlos Alberini, Chief Executive Officer, and Markus Neubrand, Chief Financial Officer. During today's call, the company will be making forward-looking statements, including comments regarding future plans. Strategic Initiatives, Capital Allocation, and Short and Long Term The company's actual results may differ materially from current expectations based on risk factors included in today's press release and the company's quarterly and annual reports filed with the SEC. Comments will also reference certain on-gap or adjusted measures.

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Carlos E. Alberini: Gap reconciliations and a description of these measures can be found in today's earnings. Now I will turn it over to Carlos. Thank you, Fabrice, and thank you all for joining us for our Q1 Fiscal 2025 Quarterly Conference Call. 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. 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.

Speaker Change: Okay.

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Speaker Change: Good day, everyone and welcome to the first quarter fiscal 2025 earnings conference call.

Speaker Change: I would like to turn the call dates.

Spin Rouge: Through February Spin Rouge, Senior Vice President of Finance, and Investor Relations and Chief Accounting Officer. Please go ahead.

Speaker Change: Thank you operator, good afternoon, everyone and thank you for joining us today.

Speaker Change: The call today with me are Carlos <unk>, Chief Executive Officer, and Nascar's, New brand Chief Financial Officer.

Speaker Change: During today's call the company will be making forward looking statements, including comments regarding future plans.

Speaker Change: The strategic initiatives capital allocation and short and long term outlooks.

Comments will also reference certain non-GAAP adjusted measures GAAP reconciliations and descriptions of these measures can be found in today's earnings release now I will turn it over to Carlos. Thank you for brief and thank you all for joining us for our Q1 fiscal 2025 quarterly conference call.

Carlos E. Alberini: We grew sales in each of our segments and expanded gross margins, both of which favorably impacted the bottom line. On the strategic front, we are excited to have completed our company's first ever acquisition. We launched a new brand, Guess Jeans, secured the renewal of a key licensing agreement, and transformed our US distribution function. We also made great strides to further strengthen our financial foundation and deliver value for our shareholders, including rewarding them with a special dividend, refinancing and repaying our 2024 convertible notes, and obtaining an expanded credit facility. Markus will share more on these financial highlights in just a few minutes. And we achieved all of this in just a little more than two months since we last spoke.

Carlos: 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: We grew sales in each of our segments and expanded gross margins both of which favorably impacted the bottom line.

Carlos: On the strategic front, we are excited to have completed our companys first ever acquisition.

Carlos: We launched a new brand guest genes secured the renewal of our key licensing agreement and transformed our U S distribution function.

We also made great strides to further strengthen our financial foundation and deliver value for our shareholders, including rewarding them with a special dividend refinancing and repaying our 2024 convertible notes and obtaining an expanded credit facility.

Speaker Change: Markus will share more on this financial highlights in just a few minutes.

Speaker Change: And we achieved all of this in just a little more than two months since we last spoke.

Carlos E. Alberini: We are proud of these results, which reflect the talent and skill of our dedicated and experienced team members. On behalf of Poland and myself, I want to take this opportunity to recognize our teams around the world for a job well done and thank them for their outstanding contributions. These results also reflect the strength and resilience of our brands and the benefit of our highly diversified business model across product categories, geographies, and channels of distribution.

Speaker Change: We are proud of these results, which reflect the talent and skill of our dedicated and experienced team members.

On behalf of Paul and myself I want to take this opportunity to recognize our teams around the world for a job well done and thank them for their outstanding contributions.

Carlos E. Alberini: That business model helps to enhance the predictability of our earnings and cash flow. The addition of Rag & Bone to our portfolio further diversifies our business and should serve to enhance our company's growth in the years to come. For the first quarter, we grew revenues by 4%, reaching $592 million. As I highlighted a moment ago, each one of our operating segments posted a revenue increase, with America's Wholesale and Licensing segments contributing more significantly to the total growth for the quarter. Our guest business in Americas retail has continued to face challenges with declines in traffic and conversion that have resulted in comparable sales headwinds.

Speaker Change: The addition of <unk> to our portfolio, even further diversifies, our business and should serve to enhance our company's growth in the years to come for the first quarter, we grew revenues by 4%.

Speaker Change: <unk> $592 million.

As I highlighted a moment ago.

Speaker Change: Each one of our operating segments posted a revenue increase with the Americas wholesale and licensing segments contributing most significantly to the total growth for the quarter.

Speaker Change: Our gift business in the Americas retail has continued to face challenges with declines in traffic and conversion that resulted in comp sales headwinds, though with the addition of broken bones to April revenues, we were able to more than offset top line pressure in this segment and deliver very modest growth.

Speaker Change: Overall, we are pleased with the <unk> business, which is performing in line with our expectations and has been a fantastic addition to the gas portfolio.

Speaker Change: Our team managed the business well with tight inventory control and careful expense management our.

Speaker Change: Our disciplined approach to inventory management drove up 4% reduction in gas and marciano inventory levels are higher level of full price selling and a 120 basis point increase in gross margins for the quarter.

Speaker Change: That loss per diluted share.

Speaker Change: Let me offer some regional highlights for the quarter.

Speaker Change: In Europe, we delivered a 1% increase in revenues, reaching $284 million ahead of expectations.

Speaker Change: The strong momentum in our European retail business continued as we posted double digit comps and grew wholesale deliveries both in constant currency.

Speaker Change: Most of our growth, though was masked by a significant currency headwind.

Carlos E. Alberini: Our business performed well in mature markets in Southern and Central Europe, while our softer markets tended to be in the North and the East. Strong product performance was broadly based, with Accessories performing best. The business was driven by the healthy performance of handbags, travel accessories, women's jewelry, and fragrance. Our women's apparel business was strong, particularly in knit tops, sweaters, skirts, and denim. And our men's business posted solid increases as well, driven by the demand for knit tops, sweaters, and accessories in Americas retail.

Speaker Change: Our business performed well in mature markets in southern and Central Europe, while our softer markets tended to be in the north and the east.

Speaker Change: Strong product performance was broadly based with accessories performing best.

Speaker Change: The business was driven by the healthy performance of handbags travel accessories womens jewelry in fragrances.

Speaker Change: Our women's apparel business was strong, particularly in knit tops sweaters skirts and denim and our men's business posted solid increases as well driven by the demand for knit tops sweaters and activewear.

Speaker Change: In the Americas retail.

Speaker Change: Revenues increased roughly half a percent reaching $144 million.

Speaker Change: The U S and Canada. The retail environment has remained challenging with consumers remaining cautious in their spending we saw declines in both our women's and men's businesses, while activewear and sweaters were our best performing category.

Carlos E. Alberini: Accessories outperformed apparel, especially handbags, watches, fragrances, and travel accessories. We are working to navigate the current environment and drive improvements in this business. We feel good about our current product assortment and have been evaluating opportunities to drive more business and improve trends through marketing investment, including trialing different promotional actions, both in-store and online. Our American wholesale business was strong and grew 21% in the quarter to $62 million, driven mainly by rag and bone shipments as well as growth from Mexico. In Asia, revenues increased by 3% to $73 million.

Speaker Change: Accessories outperformed apparel, especially handbags watches fragrances and travel accessories.

Speaker Change: We are working to navigate the current environment and drive improvements in this business. We feel good about our current product assortment and have been evaluating opportunities to drive more business and improved trends through marketing investments, including trialing different promotional actions both in store and online.

Speaker Change: Our Americas wholesale business was strong and grew 21% in the quarter to $62 million.

Speaker Change: Driven mainly by rag and bone shipments as well as growth from Mexico.

Speaker Change: In Asia revenues increased 3% to $73 million and finally, our licensing business performed extremely well delivering a revenue increase of 21% to $29 million.

Speaker Change: We are pleased to have delivered on our earnings objectives for the quarter. In addition to driving other key strategic initiatives across our business.

Speaker Change: Growing gas and expanding our global reach has always being foundational to our strategic vision since Paul and his brothers started the business.

Speaker Change: In the 43 year. Since then we have built a powerful platform anchored by successful regional management centers across the globe.

Speaker Change: Our products have sold in over 100 countries and we have developed broad capabilities to sell through virtually every distribution model.

Speaker Change: As a result, we have built gas into the thriving five 5 billion retail business that it is today.

Carlos E. Alberini: Looking to the future, we continue to see multiple opportunities to further grow the Guess brand. Beyond that, we can leverage our powerful platform to support more than just one brand. We know that with our capabilities, we can do more. We have built a platform that can power a bigger and broader business, generate synergistic growth and margin expansion, and deliver significant value creation over time. This is what we call the inflection point, the evolution that I described in our last call.

Speaker Change: Looking to the future we continue to see multiple opportunities to further grow the guess brand.

Speaker Change: Beyond that we.

Speaker Change: We can leverage our powerful platform to support more than just one brand.

Speaker Change: We know that with our capabilities, we can do more we.

Speaker Change: We have built a platform that can power, a bigger and broader business generate synergistic growth and margin expansion and deliver significant value creation over time.

Speaker Change: This is what we call the inflection point.

Speaker Change: Evolution that I described in our last call.

Carlos E. Alberini: That was to leverage that platform and drive outside growth through internally developed or segmented brands or through acquisitions of new products. Looking at our core Guess brand, the business remains healthy and has been performing well.

Carlos E. Alberini: It is gratifying to see continued success in mature markets in Europe. In addition to that, we are excited about our growth opportunities in newer markets such as Turkey, the Middle East, India, and Latin America, where the business is enjoying strong momentum. For our Guess brand, handbags have been instrumental in growing the brand, and we see opportunities for further growth as we expand our footprint. That's why we are pleased to share that Paul has renegotiated the extension of our handbag license, cementing that important partnership until 2039 on very favorable terms.

Speaker Change: In Latin America, where the business is enjoying strong momentum.

Speaker Change: For our guests brand handbags have been instrumental in growing the brand and we see opportunities for further growth as we expand our footprint.

Speaker Change: That's why we are pleased to share that Paul has renegotiated the extension of our handbag license cementing that important partnership until 2039 on very favorable terms.

Carlos E. Alberini: The new contract included a $40 million up-front 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 and Bone is a great example of this.

Speaker Change: The new contract included a $40 million upfront cash payment for the license renewal.

Speaker Change: Going forward, we see handbags as a strong category to augment the apparel assortment of other lifestyle brands beyond gas as well Ragen bone is a great example, with this potential.

Carlos E. Alberini: As you know, we have recently launched our Guess Jeans brand and just finished its first sales campaign. An exciting moment for our company. While it harkens to the legacy of the Guess brand, Guess Jeans is a completely new lifestyle brand with its own identity and multi-category assortment. It employs a brand new store concept with its own marketing strategy and advertising campaigns targeting the younger Gen Z customer but welcoming all customers. Guess Jeans is an environmentally conscious brand that is introducing air wash, an innovative stone washing process for denim that dramatically reduces water consumption.

Speaker Change: As you know.

Carlos E. Alberini: This, combined with an eco-friendly store environment defined by sustainable store materials, will connect well with its target and with its casual offering and more compelling price point. It fits well within our overall brand and pricing architecture. The brand is already ahead of expectations with wholesale accounts showing great enthusiasm for the brand and product. For example, Galleries Lafayette just featured Guess Jeans with a special installation and pop-up at their flagship Paris house and store that included airwashed visual effects, a denim customization station with a special product displayed inside.

Speaker Change: We have recently launched our guests jeans brand and just finished its first sales campaign and exciting moment for our company.

Carlos E. Alberini: They also featured our first Guess Jeans advertising campaign on the facade of the iconic store, which is located in a very high traffic area in Paris. Also in June, Italian department store chain La Rinascente plans to do a special Guess Jeans presentation in its flagship store on Corso Vittorio Emanuele Milani, under the direction of Nicolai Marciano. We have just completed the first Guess Jeans advertising campaign featuring English fashion model and actress Iris Law, the daughter of actor Jude Law.

Speaker Change: While the hurricanes to the legacy of the gifts brand gives teams is a completely new lifestyle brand with its own identity and multi category assortment.

Speaker Change: It employs a brand new store concept with its own marketing strategy on advertising campaigns targeting the younger Gen Z customer, but welcoming all customers.

Speaker Change: Guest genes is an environmentally conscious brand that is introducing erewash and innovative stone, Washington process for denim that dramatically reduces water consumption.

Speaker Change: This combined with an eco friendly store environment defined by sustainable store materials will connect well with its target consumer and.

Speaker Change: With its casual offering and more compelling price points, it fits well within our overall brand and pricing architecture.

Speaker Change: The brand is already ahead of expectations with wholesale accounts showing great enthusiasm for the brand and product.

In France, Galeries Lafayette, Jeff featured guests genes with especial installation on pop up at their flagship Paris Housewares store that include Airwash visual effects.

Speaker Change: Denim customization station with a special product displays and signage.

Speaker Change: They also feature our first guest jeans advertising campaign on the facade of the iconic store, which is located in a very high traffic area in Paris.

Speaker Change: Also in June Italian Department store chain laterally and Ashanti plans to do a special guest jeans presentation in its flagship store on Corso Vittorio Emanuele in mainland.

Speaker Change: Under the direction of Nicolai Marciano we.

Speaker Change: We just completed the first guess jeans advertising campaign, featuring English fashion model and actress Irish law, the daughter of actor Jude law.

Speaker Change: We believe her in France will help expand the reach of the guests jeans brand globally online in print and across social media as well.

Speaker Change: Also for the 30 year during Coachella weaken gas jeans hosted celebrity guests and brand ambassadors and our luxury compound of homes that.

Speaker Change: The weekend included multiple after parties hosted by top performing artists under some pack metro boom in <unk> with that start studded guest list, including Bill the Irish I Spice Jay Baldwin.

Speaker Change: Robert patents on Justin and Hailey Bieber and more.

Carlos E. Alberini: The event proved enormously successful, resulting in nearly 4 billion impressions and 58 million views. As you know, we completed our acquisition of Rag & Bone in Q1 through a partnership with WHB Global. Rag and Bone is already a quarter billion dollar business. The 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 aspiring consumer, This nicely complements our system. Ragonbone also brings with it an experienced and talented management team led by Andrew Rosen. Paul and I want to welcome them all to the Guess?

Speaker Change: The event proved enormously successful, resulting in nearly 4 billion impressions and 58 million views.

Speaker Change: As you know we completed our acquisition of Ragen borne in Q1 through our partnership with W. HP Global.

Speaker Change: Reagan bone is already a quarter billion dollars business.

Speaker Change: This nicely complements our existing business.

<unk> also brings with it an experienced and talented management team led by Andrew Rosen.

Paul Reagan: Paul and I want to welcome them all to the guest finally.

Paul Reagan: We hope you also saw that on Tuesday, we announced Andrews appointment as ragen bonds executive chair.

Paul Reagan: Andrew is a visionary and American fashion and has been involved with ragen bond since 2006, he brings a wealth of experience and expertise to the brand providing strategic direction and oversight to drive the brand's mission forward.

Paul Reagan: It's only been a couple of months.

Paul Reagan: But our teams are already working well together.

Carlos E. Alberini: We are already advertising the brand in existing and new markets, and we are actively looking for new store locations, including key cities in Europe. 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, turning to a focus on product. During the quarter, we made significant progress to reduce our SKU development counts in our global apparel lines, with a goal to achieve a 30% reduction. We have also tightened the assortment in our retail stores to concentrate our buys into fewer SKUs to increase productivity and service levels.

Speaker Change: We are already advertising the brand in existing and new markets and we are actively looking for new store locations, including key cities in Europe.

Speaker Change: Turning to our focus on product during.

Speaker Change: During the quarter, we made significant progress to reduce our SKU development count in our global apparel lines with a goal to achieve a 30% reduction.

Speaker Change: We have also tightened the assortment in our retail stores to concentrate our buys into fewer skus to increase productivity and service levels.

Speaker Change: In addition, we continue to refine and perfect our pricing structure by focusing on the customers' perceived value for each and every product.

Speaker Change: To support this goal the transition to a third party provider to operate our U S distribution center is well underway.

We selected <unk> logistics, which has been in our distribution partner in Europe for many years.

Speaker Change: <unk> transition, which is going smoothly should help reduce costs as well as improved service levels.

Speaker Change: We have launched a process to sell that facility with <unk> leasing it back to operator.

Carlos E. Alberini: We expect the self-transaction to be finalized before the end of the third quarter. Turning to our art look. Consistent with our previous guidance, we expect strong revenue growth to exceed $3 billion this year for the first time ever and to deliver nearly $3 in adjusted earnings per share. Before I hand off to Mark, let me share my personal reflection and what has me so excited about our company and our future. I have been back now for a little more than five years.

Speaker Change: We expect further sale transaction to be finalized before the end of the third quarter. This year.

Speaker Change: Turning to our outlook.

Speaker Change: System with our previous guidance, we expect strong revenue growth to exceed $3 billion. This year for the first time ever and to deliver nearly $3 in adjusted earnings per share.

Before I hand off to markets.

Speaker Change: Let me share my personal reflection on what has me so excited about our company and our future.

Speaker Change: I have been back now a little more than five years and so much has changed and that includes with me.

Carlos E. Alberini: And so much has changed, and that includes me. Because when I returned in 2019, I brought with me the perspective that I left with in 2010. I was laser focused on growing the Guess brand, a successful brand well known for over 40 years and already well distributed in over 100 countries. I still strongly believe that there are growth opportunities for Guess and great things to come. What I have come to realize, though, is that, arguably... Our most valuable asset is the powerful machine, this platform, that we have built that brought Guess to the precipice of a $3 billion global brand. What started with Paul and his brother's vision for Guess? was either developed internally or acquired from others.

Speaker Change: Because when I returned in 2019 I brought with me the perspective that I left with in 2010.

Speaker Change: Laser focused on growing the guess brand a successful brand well known for over 40 years and already well distributed in over 100 countries.

Speaker Change: I still strongly believe that there are growth opportunities for guests and great things to come.

Speaker Change: What I have come to realize though is that arguably.

Carlos E. Alberini: That's the inflection point. Recognizing that this company is more than just one brand; it is that platform. Our Expansive Global Footprint, Broad Channels Capability, Diverse Category Portfolio, and strong management team. That's a powerful arsenal, not easy to replicate, but so adaptable.

Our most valuable asset is the powerful machine. This platform that we have built that brought guests to the precipice of a $3 billion global brand.

Speaker Change: What started with Paul and his brothers vision for gas, we can do with other brands either developed internally or acquired from others.

Speaker Change: That's the inflection point.

Speaker Change: Recognizing that this company is more than just one brand is that platform.

Speaker Change: Our expansive global footprint broad channel capabilities extensive supply chain diverse category portfolio and strong management team, that's a powerful arsenal not easy to replicate but so adaptable.

Speaker Change: We wake up every day energized by the belief that we can do things that others simply cannot do.

Speaker Change: To take a regional brands and make it global.

Speaker Change: To turn a single category brand into a lifestyle brand.

Speaker Change: To make something exponentially bigger because we can grow it across multiple dimensions.

We are off to a great start with ragen bone and guest Jean's already has solid traction.

Carlos E. Alberini: Our strong start to the year reinforces our belief and our passion. We have a strong capital structure, and we are careful stewards of our shareholders' capital, so we will move prudently, learn as we go, and course correct when necessary. But I'm even more enthusiastic now than I was in 2019, and I couldn't be more excited and confident in our ability to drive outsized growth with this platform and create outsized value for our shareholders. And with that, I will pass the call to Markus. Markus, please go ahead.

Speaker Change: Our strong start to the year reinforces our belief and our passion.

Speaker Change: We have a strong capital structure and we are careful stewards of our shareholders' capital. So we will prudently learn as we go and course correct when necessary.

Markus Neubrand: And with that I will pass the call to Mark markets. Please go ahead.

Markus Neubrand: Thank you Carlos and good afternoon, everyone.

Speaker Change: I want to Echo Carlos sentiments about our quarter.

Mark: Our team performed very well, resulting in higher than expected revenues adjusted operating margin and a lower adjusted loss per share than we had anticipated.

Mark: On April <unk> 2024, we completed to reckon bone acquisition and have integrated wagon bone into our existing segments.

Markus Neubrand: Let me take you through our first quarter results in more detail. Total company revenues in the first quarter grew by 4% in U.S. dollars and 7% in constant currency, with the Europe and licensing segments performing better than expected, partially offset by lower than anticipated revenues in our Americas region. Compared to last year's first quarter, Rag & Bone accounts for 4 points, and a core business for three points of the total company revenue growth. In concert, turning to our segment performers. Starting with Europe, where we posted a 1% revenue increase in US dollars and 7% in concentration. Retail comps, including e-commerce, increased 4% in US dollars, as has been the case in the past few quarters.

Mark: Let me take you through our first quarter results in more detail.

Mark: Compared to last year's first quarter Ragen bone accounts, four full points and our coal business for three points of the total company revenue growth in constant currency.

Mark: Turning to our segment performance, starting with Europe, where we posted a 1% revenue increase in U S dollars and 7% in constant currency.

Mark: Retail comps, including E Commerce increased 4% in U S dollars and 9% in constant currency.

As in the past few quarters.

Markus Neubrand: Turkey's hyperinflation had a meaningful impact on the retail coms, including e-commerce, and excluding Turkey, that retail comp increase and constant currency would have been. A key driver for the revenue growth in the quarter was a strong store comparable revenue growth of 12% in concentration. While traffic declined modestly, our teams drove AUR growth and a higher conversion rate. Key actions we took over the last six months continue to benefit our performance, including improved assortment, replenishment, and better customer service. Although improving from the fourth quarter trend, our e-commerce comps declined by 1% in constant currency compared to Q1 of last year.

Turkey type of inflation had a meaningful impact on our retail comps, including e-commerce and excluding Turkey.

Mark: At retail comp increase in constant currency would have been 4%.

Mark: A key driver for the revenue growth in the quarter was a strong store comparable revenue growth of 12% in constant currency.

Mark: While traffic declined modestly our teams drove AUR growth and a higher conversion.

Mark: Key actions, we took over the last six months continued to benefit our performance, including improved assortments replenishment and better customer experience.

Mark: Improving from fourth quarter trends.

Mark: Our e-commerce comps declined by 1% in constant currency compared to Q1 of last year.

Markus Neubrand: Our revenues in European wholesale increased by a low single digit in constant. This was partially driven by earlier than anticipated shipments to wholesale accounts that welcomed our product to support good sales momentum in their. The operating margin in our European business decreased by 80 basis points to negative 0.2%. [inaudible] Revenues for America's retail increased roughly half a percent in U.S. dollars and remained roughly flat in concentration. The decline in retail comps in our core business in the U.S. and Canada was offset by the addition of Rag & Bone and robust retail comps in Mexico.

Our revenues in European wholesale increased low single digits in constant currency.

Mark: This was partially driven by earlier than anticipated shipments to wholesale accounts that one.

Outcomes, our product to support good sales momentum in that businesses.

Mark: The operating margin in our European business decreased by 80 basis points to negative <unk>, 2%.

Mark: Due to higher expenses and currency headwinds, partially offset by higher revenues and improved initial markups.

Mark: Revenues for Americas retail increased roughly half a percent in U S dollars and main remained roughly flat in constant currency.

Mark: The decline in retail comps in our coal business in the U S and Canada was offset by the addition of rag and bone and robust retail comps in Mexico.

Mark: American retail comps, including e-commerce declined 8% in constant currency.

Mark: In our U S and Canada stores comp fell by 12% in constant currency as a result of lower levels of traffic and conversion.

As Carlos mentioned, we are taking action to improve our performance.

Mark: Our U S and Canada E com comparable revenues decreased by 1% compared to Q1 of last year.

Markus Neubrand: Lower traffic to our website was partially offset by business initiatives that drove a higher conversion rate. America's retail posted a negative 7.2% operating margin, a roughly 5 point decrease in operating margin compared to last year. It was driven by the unfavorable impact of lower stock coms and higher expenses, partially offset by lower markdowns and a higher IMF. However, revenues increased by 21% in U.S. dollars and 18% in constant currency, mainly driven by the first-time consolidation of Reagan.

Mark: Lower traffic to our website was partially offset by business initiatives that drove a higher conversion rate.

Mark: Americas retail posted a negative seven 2% operating margin of roughly five point decrease in operating margin compared to last year, which was driven by the unfavorable impact from lower stock comps and higher expenses.

Mark: Partially offset by lower markdowns and a higher IMU.

Mark: In Americas wholesale.

Mark: Revenues increased by 21% in U S dollars and 18% in constant currency, mainly driven by the first time consolidation of <unk>.

Mark: Operating margin reached 22, 7% a decrease of 280 basis points from last year's first quarter, mainly driven by the impact of new acquired businesses.

Mark: In Asia revenue grew 3% in U S dollars and 7% in constant currency.

Mark: Revenue growth was mainly driven by our new business in India and E Commerce in China.

Mark: Retail comps, including e-commerce for the region decreased 5% in constant currency.

Mark: Operating margin in Asia decreased 30 basis points to five 1%.

Markus Neubrand: Higher revenues were offset by lower product margins and higher, And finally, our licensing segment had a strong quarter and exceeded our expectations, with revenues increasing 21% in both US dollars and constant currency. The first order benefited from the amortization of the up-front payment for the handbag license; segment operating margin was 92%, and operating profit increased by. In Q1, total company gross margin reached 41.9%, up 120 basis points from a year earlier, mainly driven by higher revenues. Due to improved IMUs and lower markdowns, partially offset by higher, Adjusted SG&A expense for the quarter increased 11% to $256 million.

Mark: Higher revenues were offset by lower product margins and higher expenses.

Mark: And finally, our licensed and segment had a strong quarter and exceeded our expectations with revenues, increasing 21% in both U S dollars and constant currency.

Mark: The first quarter benefited from the amortization of the upfront payment for the <unk> license renewal.

Mark: Segment operating margin was 92% and operating profit increased by 20%.

Mark: In Q1 total company gross margin reached 41, 9% up 120 basis points from a year earlier, mainly driven by higher revenues improved IMU and lower markdowns, partially offset by higher expenses.

Mark: Adjusted SG&A expense for the quarter increased 11% to $256 million.

Markus Neubrand: The increase was mainly due to Rag & Bone and investments in marketing and infrastructure, especially in Europe. For the quarter, our adjusted SG&A rate increased 2.8 points to 43.2. In the quarter, our adjusted operating margin for the company decreased 160 basis points to a negative 1.3%, driven by high expenses and an unfavorable impact from current Offset by higher revenues and I'm. In the quarter, we further reported non-operating net income of $36 million.

The increase was mainly due to rag, <unk> bone and investments in marketing and infrastructure, especially in Europe.

Mark: For the quarter, our adjusted SG&A rate increased two eight points to 43, 2%.

Mark: In the quarter, our adjusted operating margin for the company decreased 160 basis points to a negative one 3% driven.

Mark: Driven by higher expenses, and an unfavorable impact from currencies.

Mark: Offset by higher revenues and ICU.

Mark: In the quarter, we further reported non operating net income of $36 million.

Markus Neubrand: This includes a net non-cash gain due to remeasurements of derivatives related to our convertible nodes and related tasks. With the completion of the convertible notes exchange transactions earlier this year, the accounting treatment changed to fair value, resulting in a non-operating, non-cash gain or loss.

Mark: This includes a net noncash gain due to re measurement of derivatives related to our convertible notes and related tax.

Mark: With the completion of the convertible note exchange transactions earlier this year, the accounting treatment change to fair value.

Mark: Resulting in a non operating non cash gain or loss.

Markus Neubrand: Further, our GAAP corporate overhead expenses in the quarter were impacted by $11 million of charges related to the Rag & Bone transaction and the transition of our Kentucky Distribution Center to a third-party provider. And we recorded an adjusted effective tax rate of 12. Q1 diluted loss per share was $0.27 compared to $0.07 of loss per share last year. Moving to the balance, our inventories were $555 million at the end of the crisis, excluding rag and bone. Our core inventories were down 4% in US dollars and 1% in constant currency compared to last year, underscoring our disciplined. For the quarter, capital expenditures were roughly $20 million, mainly driven by investments in storage models, technology We ended the quarter with $243 million in cash, compared to $299 million a year ago.

Mark: Further our GAAP corporate overhead expenses in the quarter were impacted by $11 million of charges related to your break in Poland transaction.

Mark: And the transition of our Kentucky distribution center to a third party provider.

Mark: And we recorded an adjusted effective tax rate of 12, 3%.

Mark: Adjusted Q1 diluted loss per share was <unk> 27 comp.

Mark: Compared to seven tenths of loss per share in last year's first quarter.

Mark: Moving to the balance sheet.

Mark: Our inventories were $555 million at the end of the quarter.

Mark: Excluding rag and bone, our core inventories were down 4% in U S dollars.

Mark: And 1% in constant currency compared to last year, underscoring our disciplined inventory management.

Mark: For the quarter capital expenditures were roughly $20 million, mainly driven by investments in store Remodels technology, and <unk> of certain assets in Chile and Peru.

Mark: We ended the quarter with $243 million in cash.

Mark: Compared to $299 million a year ago.

Markus Neubrand: The most significant drivers of that $56 million cash consumption over the last four quarters include $234 million of free cash flow, which includes $40 million of upfront payment in connection with the handbag license renewal, more than offset by $185 million in dividends and the Rag & Bone acquisition of $57 million. $31 million in share repurchases and $12 million in minority capital. We ended the quarter with a total of $279 million of borrowing capacity on our various global facilities.

Mark: The most significant drivers of that $56 million of cash consumption over the last four quarter.

Mark: $234 million of free cash flow, which includes $40 million of upfront payment in connection with the handbag license renewal more than offset by a $185 million dividend.

The <unk> acquisition of $57 million.

Mark: $31 million in share repurchases.

And $12 million in minority capital distributions.

Mark: We ended the quarter with a total of $279 million of borrowing capacity on our various global facilities.

Mark: So roughly $520 million of available liquidity.

Speaker Change: As Carlos mentioned, we issued a special dividend of $2 25 per share to our shareholders. While also repaying $33 million in 2024 convertible notes due in April.

Furthermore, in connection with the closing of the <unk> acquisition.

Speaker Change: We increased the borrowing capacity of our asset based revolving credit facility in North America by roughly $50 million.

Speaker Change: We also exchanged an additional tranche.

Our 2024 convertible notes, which had been <unk> last month deferring $15 million of maturities in 2028.

Markus Neubrand: We are very pleased with our free cash flow for the last 12 months, which improved by more than $100 million compared to the prior year. That performance resulted from both our careful working capital management as well as sizable cash infusions from non-recurring sources. Turning to our outlook for fiscal year 2025, our view of the year is consistent with what we shared with you back in March. We continue to expect a cautious consumer whose shopping is affected by external factors like inflation.

Speaker Change: We are very pleased with our free cash flow for the last 12 months, which improved more than $100 million.

Speaker Change: Compared to the prior period.

Speaker Change: Net performance resulted from both our careful working capital management.

Speaker Change: As well our sizable cash infusions from nonrecurring events.

Speaker Change: Turning to our outlook for fiscal year 2025.

Speaker Change: Our view of the year is consistent with what we shared with you back in March.

Speaker Change: We continue to expect the cautious consumer who's.

Speaker Change: Shopping is affected by external factors like inflation.

Speaker Change: Credit availability and higher interest rates.

Markus Neubrand: In our core retail business in the US and Canada, our traffic headwinds, As Carlos described earlier, we are working on initiatives to drive improvement in this. In Europe, we expect our business to remain. The addition of Rag and Bone will contribute to a substantial portion of this year's growth for the total company. And, as always, given the diversification of our model. We will remain agile to react quickly to new developments, including both opportunities and challenges.

Speaker Change: In our core retail business in the U S and Canada, our traffic headwinds persist.

Speaker Change: As Carlos described earlier, we are working on initiatives to drive improvements in this business.

Speaker Change: In Europe, we expect our business to remain strong.

Speaker Change: The addition of Rag and bone <unk> contribute to a substantial portion of this year's growth for the total company.

And as always given the diversification of our model.

Speaker Change: We will remain agile to react quickly to new developments, including both opportunities and challenges.

Markus Neubrand: For the fiscal year 2025, we now expect revenues to increase in the range of 10.7 to 12.7% in U.S. dollars. This is due to a Ned of one and a half point headwind because of last year's extra week and the one point currency headwind. Given the prevailing exchange rates, currency headwinds should ease in the latter half of fiscal 2025. Given the Red Sea disruption, we continue to expect headwinds from inbound

Speaker Change: For the fiscal year 2025, we now expect revenues will increase in the range of 10, seven to 12, 7% in U S dollars.

Speaker Change: This is net of a one five point headwind because of last year's extra week and a one point currency headwind given prevailing exchange rates.

Speaker Change: Currency headwinds should ease in the latter half of fiscal 2025.

Speaker Change: Given the Red Sea disruption, we continue to expect headwinds from inbound freight costs.

Markus Neubrand: And our plans to support our growth initiatives by investing in marketing and infrastructure remain, although based on these assumptions for the full year. We expect an adjusted operating margin between 7.7 and 8.5% and adjusted earnings per share in the range of $2.62 to $3. For the second quarter, we expect revenues to increase in the range of 9 to 11% in U.S. dollars. Currency headwinds. I expect them to have a net adverse impact on revenue growth of roughly two points.

And our plan to support our growth initiatives by investing into marketing and infrastructure remain in place.

Speaker Change: Based on these assumptions for the full year.

Speaker Change: We expect an adjusted operating margin between seven seven and eight 5%.

And adjusted earnings per share in the range of $2.62 to $3.

Speaker Change: For the second quarter, we expect revenues will increase in a range of 9% to 11% in U S dollars.

Speaker Change: Currency headwinds I expect it to have a net adverse impact on revenue growth of roughly two points.

Markus Neubrand: We expect adjusted operating margin between 5.3% and 6.1% and adjusted earnings per share between 38% and 47%. Overall, we expect revenue growth to accelerate in the third quarter of the year with the first outerwear shipment in North America and an acceleration of the new Guess? Going into the fourth quarter, we expect that revenue growth will be negatively impacted as we will anniversary last year's fiscal year. Turning to the operating model,

Speaker Change: We expect adjusted operating margin between five three and six 1% and adjusted earnings per share between <unk> 38 and 47.

Going into the fourth quarter, we expect that revenue growth will be negatively impacted.

Speaker Change: We will anniversary last year's 50 <unk> week.

Turning to operating margin.

Markus Neubrand: We do expect the margin pressure to abate in the third quarter when compared with the fourth quarter. Our outlook for free cash flow is unchanged as we anticipate generating a free cash flow of roughly 160 million dollars for the full year. Our priority is to invest in our brands and businesses to support sustainable growth. We will remain highly disciplined in the way we allocate capital across projects. encloses As of today, I've been a part of the Guess family for almost a year. I'm proud of our teams that continue executing with excellence, as demonstrated again by our performance last quarter.

We do expect the margin pressure to abate in the third quarter when compared with last year.

Speaker Change: The fourth quarter should represent an opportunity for adjusted operating margin expansion.

Speaker Change: Our outlook for free cash flow is unchanged as we anticipate generating a free cash flow of roughly $160 million for the full year.

Speaker Change: Our priority is to invest in our brands and businesses to support sustainable growth.

Speaker Change: We will remain highly disciplined in the way, we allocate capital across projects.

Speaker Change: In closing.

Speaker Change: I've been a part of the guest's family for almost a year.

Speaker Change: I am proud of our teams that continue executing with excellence as demonstrated again by outperformance last quarter.

Markus Neubrand: We have an incredible platform, and our strong capital structure enables us to invest in our future. We are very excited about our prospects for growth. We are focused on data analytics to improve decision making on our journey to achieve operational excellence. Looking forward, our strategic objectives will guide us to drive sustainable, profitable growth and meaningful shareholder growth. And with that, we can now open the call to questions. Thank you. And as a reminder, to ask a question, simply press star 11 on your telephone and wait for your name to be announced. To remove yourself from the queue, simply press star 11 again.

Speaker Change: We have an incredible platform and our strong capital structure enables us to invest in our future.

Speaker Change: We are very excited about our prospects for growth.

Speaker Change: We are focused on data analytics to improve decision, making on our journey to achieve operational excellence.

Speaker Change: Looking forward, our strategic objective will guide us to drive sustainable profitable growth and meaningful shareholder returns.

Operator: One moment while I compile the Q&A roster. One moment for our first question, and it comes from the line of Mauricio Serna with UBS. Please proceed. Great. Good afternoon, and thanks for taking our questions. First of all, I just wanted to ask about the revenue guidance for the year. I think, you know, you lowered it a little bit despite a beat in the first quarter. I was wondering if this is mostly related to, maybe, FX being a bigger headwind than previously anticipated.

Speaker Change: And with that we can now open the call up for questions.

Thank you and as a reminder to ask a question simply press Star one one on your telephone and wait for your name to be announced to remove yourself from the queue simply press star one again.

Speaker Change: One moment, while I compile the Q&A roster.

Mauricio Serna Vega: And then on the margins for the year, I think, you know, slightly up at the midpoint, just slightly. But is that reflective of the new licensing agreement, just trying to reconcile what were the changes in there? And then I have another follow-up. Hi, Mauricio. Let me start and then Markus is going to complete this.

Speaker Change: One moment for our first question and it comes from the line of Mauricio Serna with UBS. Please proceed.

Mauricio Serna Vega: Great. Good afternoon, thanks for taking our questions.

Mauricio Serna Vega: Just wanted to ask on the revenue guidance for the year I think.

Mauricio Serna Vega: You lowered you lowered it a little bit despite a beat on our first quarter I was wondering if this is mostly related to maybe like FX being.

Mauricio Serna Vega: The new licensing agreement just trying to reconcile what were the changes in there and then I have another follow up thank you.

Carlos E. Alberini: But just in general, our guidance today and our outlook is very consistent with the previous one that we shared with you about two months ago when we released fourth-quarter earnings. And, yes, of course, we have tweaked the outlook some based on our performance in the first quarter and the trends that we are seeing. So we did tweak some that touched primarily the retail business in the Americas, and also, just a lot of the performance was very positive with respect to what we saw in some other businesses that compensated or offset some of the weakness that we saw in the Americas.

Mauricio Serna Vega: Yes.

Speaker Change: Yes, Hi, Mauricio let me start.

Speaker Change: And then.

Speaker Change: Mark is going to complete this but just in general.

Speaker Change: Our guidance today and our outlook is very consistent with.

Speaker Change: The previous one that we shared with you about two months ago, when we release.

Speaker Change: Fourth quarter earnings and and.

Speaker Change: Yes of course, we tweaks in the outlook.

Speaker Change: Based on our performance in the first quarter on the trends that we're seeing so we did tweak some.

Speaker Change: Doug touched primarily the retail business in the Americas and and also.

Speaker Change: Just a lot of the.

Speaker Change: Performance was also.

Speaker Change: Very positive with respect to what we see in some other businesses.

Speaker Change: <unk> are offset.

Speaker Change: Some of the.

Carlos E. Alberini: In addition to that, we do have some timing issues that have impacted just the wholesale business in Europe, but it's a relatively small piece, and we are seeing a lot of momentum in the growth of that business for the second half of the year. So that is also embedded in our guidance. Your question about licensing, there is a small adjustment to the licensing business because of the renewal of that license, but it's not significant, but it's embedded in the guidance as well. And I think that Markus is going to talk about the currency issue as well, which is impacting us significantly in the first half, but it's supposed to obey in the second half. Hi Mauricio.

Speaker Change: The weakness that we saw in the Americas.

In addition to that we do have some timing issues that impacted you.

Speaker Change: Just that the wholesale business in Europe.

As a relatively small piece and we're seeing a lot of momentum in the growth of that business for the second half of the year. So that is also embedded in our guidance.

Speaker Change: Your question about licensing.

Speaker Change: There is a small adjustment to.

Speaker Change: The licensing business because of the.

Speaker Change: Renewal of that license.

Speaker Change: But it's not significant but it's embedded in the guidance as well.

Speaker Change: And I think that.

Speaker Change: The market is going to talk about the currency issue as well, which is impacting us in the first half significantly, but it's supposed to abate and the SEC.

Speaker Change: <unk> end markets.

Speaker Change: <unk>. Thank you for your question Rick.

Markus Neubrand: Regarding revenue, to reiterate what Carlos just said, our guidance is very consistent, and the guidance we gave today is consistent with what we provided previously with strong revenue growth and also adjusted operating margin, adjusted EPS at the top end of 8.5% and $3 per share. Let me give you a little bit more color on the second quarter with the guidance which we provided today. We're expecting U.S. dollar revenue growth between 9% and 11% for the second quarter, adjusted operating margin between 5.3% and 6.1%, and EPS between 38% and 47%. That's consistent with how we were thinking about the second quarter when we got it last time, with only two notable changes.

Speaker Change: Regarding the revenue so reiterate what Carlos just set our.

Speaker Change: Our guidance is very consistent.

Speaker Change: Speaking today.

Speaker Change: Sticking with what we provided previously with strong revenue growth.

And also adjusted operating margin and adjusted EPS at the top end of eight 5% and $3 per share.

Speaker Change: Let me give you some little bit more color on the second quarter.

Speaker Change: <unk>, which we provided today.

Speaker Change: We expecting U S dollar revenue growth between nine and 11% for the second quarter adjusted operating margin between $5, three and six 1% and EPS between <unk> $38 47.

Speaker Change: That's consistent with how we were thinking about the second quarter. When we guided last time with only two notable changes.

Markus Neubrand: Carlos touched on, we are pleased with the European wholesale customers having a good sell-out performance, and we anticipated some earlier in the Q1 in the first quarter instead of the second quarter. And then, as Carlos just mentioned and we talked about in prepared remarks, America's retail business has been soft, and these assumptions are now part of our second quarter guidance. And, obviously, of course, that's why I wanted to start with the second quarter. This is impacting the fourth quarter and the rest of the year as well.

Speaker Change: Carlos touched on.

Speaker Change: We are pleased with the European wholesale customers have a good solid performance and we anticipated some earlier.

Speaker Change: Into Q1 in first quarter and set up the second quarter and then as Carlos just mentioned and we talked about in prepared remarks, the Americas retail business has been soft.

Speaker Change: These assumptions are now part of our second quarter guidance and obviously of course is why I wanted to establish the second quarter. This is impacting the fourth quarter the rest of the year as well.

Markus Neubrand: As you think about the quarterly cadence for the back half of the year, we have an opportunity for adjusted operating margin expansion, especially in the fourth quarter. And considering the seasonality of our business, the fourth quarter being the strongest revenue quarter, that's great because it represents the biggest opportunity for adjusted operating profit growth.

As you think about the quarterly cadence for the back half of the year.

Speaker Change: We have opportunity for adjusted operating margin expansion, especially in the fourth quarter.

Speaker Change: And considering the seasonality of our business the fourth quarter being the strongest revenue quarter and thats, great because it represents the biggest opportunity for <unk>.

Speaker Change: <unk> operating profit growth.

Markus Neubrand: Very helpful, this caller. Maybe just to elaborate on your comment about Q4, like, what is driving that opportunity for operating margin expansion? And maybe just lastly, if you could elaborate on, you know, what you've done, like, it's very nice to see some of the lower markdowns in America's retail business that you highlighted, like, could you talk a little bit more about what drove that lower markdown activity? Let me first start, and we shared on the Q4 call, what is driving the second half of the year in terms of overall revenue initiatives, where we have The headwinds that we talked about earlier last year, in the 53rd week, and in the first half of the year, which we expect, I think, also to abate in the second half of this year.

Speaker Change: Okay got it.

Speaker Change: Very helpful color, maybe just to elaborate on the comment about Q4 like what is driving that opportunity in operating margin expansion and maybe just lastly, if you could elaborate on what.

Speaker Change #100: You've done a very nice to see some the lower markdowns in the Americas retail business that you highlighted Mike could you talk about.

Speaker Change #101: What drove that lower markdown activity.

Speaker Change #102: Let me first start and we shared also aligned our Q4 call what is driving the second half of the year in terms of overall revenue initiatives, where we have several concrete initiatives like X gene.

Speaker Change #103: Actual in Peru, the internalization of the outerwear and dress category, which stopped shipping in the second half and of course <unk> in Poland.

Speaker Change #103: Headwinds that we talked about earlier.

Speaker Change #103: Last year's 50, <unk> week and FX in the first half of the year, which we expect to I think then also.

Speaker Change #103: To abate in the second half of this year going back to your question about operating margin and I think what is for the fourth quarter.

Markus Neubrand: Going back to your question about operating margin, and I think what it is for the fourth quarter, we see improved for the fourth quarter, and improved full price selling. I think that we quoted last year's fourth quarter. We had higher markdowns, but I think that's also where we see this as an opportunity for improved full price selling. And we also see, with the timing of the wholesale shipments, and also supported by the good sell-out performance of our partners, we see the fourth quarter benefiting from the timing of the wholesale shipments, and furthermore, third point, with the timing of our advertising spend across the year, this will benefit our fourth quarter operating margin as well.

Speaker Change #103: We see improved for the fourth quarter improved full price selling I think that we quoted last years full.

Speaker Change #103: Full quarter, we had higher markdowns I think Thats also where we see this as an opportunity for improved full price selling and we also see with the timing of the wholesale shipments.

Speaker Change #103: And also supported by the good performance of our partners.

Speaker Change #103: See the fourth quarter benefiting from the timing of wholesale shipments and Furthermore, third point.

Speaker Change #103: With the timing of our advertising spend across the year.

Speaker Change #103: This will benefit our fourth quarter operating margin as well.

Markus Neubrand: And I would add that the addition of Rag & Bone has had a significant impact. This is a business that has a big component of retail as part of the mix of business, and that should be creative in the fourth quarter as well. And you asked the question about margins in general.

Speaker Change #104: And I would add that the addition of ragen bone has a significant impact. This is a business that is.

Speaker Change #103: Yes.

Speaker Change #103: Big component of retail.

Speaker Change #103: As part of the mix of business and.

Speaker Change #103: That should be accretive to the fourth quarter as well.

Speaker Change #103: And.

Speaker Change #103: You asked a question about margins in general we have been.

Markus Neubrand: We have been very disciplined in the way we have been buying inventory. We are obsessed with trying to read what future demand is going to look like, and then we limit inventory buys to support that business based on that future customer demand. And it has worked very well for us. We instituted this now a couple, maybe three or four years ago, and we are applying this methodology to every one of our businesses, regardless of region.

Speaker Change #103: <unk> been very disciplined in the way we have been buying inventory.

Obsessed with trying to read what future demand is going to look like.

Speaker Change #103: And then we are.

Speaker Change #103: <unk> or limiting inventory buys to support that business based on that future customer demand.

Speaker Change #103: And it has worked very well for us.

Speaker Change #103: We instituted this now a couple maybe three or four years ago that we have been doing this and we are applying this methodology in every one of our businesses.

Markus Neubrand: And as a result, we can optimize margins on the sell-out because, in every case, we choose to not overbuy, even if that means that we are not going to be maximizing sales. But we are trying to respect our core value about elevating the brand and selling a lot of the products that we buy at full price and avoid discounting at this type of cost of reducing sales, if anything, but having a much healthier business. I got it. Very helpful. Thanks again for all the details.

Speaker Change #103: Regardless of region.

Speaker Change #103: And as a result, we can optimize margins in our <unk>.

Speaker Change #103: In this era.

Speaker Change #103: Because in every case, we have we are we choose to.

Speaker Change #103: Not overbuy.

Speaker Change #103: Even if that means that we are not going to be.

Speaker Change #103: Maximizing our sales, but we are trying to respect our.

Speaker Change #103: Core value about elevating the brand and on selling a lot.

Speaker Change #103: The products that we buy at full price.

Speaker Change #103: And avoids discounting.

Speaker Change #103: This type of cost of reducing sales, if anything but having a much healthier business.

Speaker Change #105: Got it very helpful. Thanks again for other deep thank you Marissa.

Mauricio Serna Vega: Thank you, Mauricio. Thank you. And as a reminder, ladies and gentlemen, that is star 11 if you do have a question. One moment for our first, our next question, please, and it comes from the line of Eric Beder with Small Cap Consumer Research. Please proceed. Good afternoon. Congratulations on the acquisition. I want to talk a little bit about Rag and Bone.

Speaker Change #106: Thank you and as a reminder, ladies and gentlemen that is star one one if you do have a question.

Speaker Change #107: One moment for our first next question please.

Eric Martin Beder: You mentioned that you're looking for retail space in Europe. I know this brand is not heavily distributed outside the U.S., so how do you look upon expanding this brand into international markets? And also, there are not a lot of stores here or in the U.S.; how many do you think, longer term, this brand can support? And when you look, we'll have a follow-up. Yes, thank you Eric for the question. You know, we are just super excited about Rag & Bone. I think that it's very clear.

Speaker Change #108: And it comes from the line of Eric better with small cap consumer research. Please proceed.

Speaker Change #107: Okay.

Eric: Hey, good afternoon, congrats on the acquisition.

Eric Martin Beder: Want to talk a little bit around rag and bone.

Eric Martin Beder: You mentioned.

Eric Martin Beder: That you are looking for retail space in Europe.

Eric Martin Beder: I know the spread is not heavily distributed outside the U S. So how do you look upon.

Eric Martin Beder: Expanding this brand into international and also Theres not a lot of stores here or in the U S. How many do you think longer term can this brand support and when you look at that.

Speaker Change #109: We will have a follow up.

Speaker Change #110: Yes, Thank you Eric for the question.

Speaker Change #111: We are super excited about Robert Bohn I think that is.

Speaker Change #112: It's very clear, we just made a big announcement with Andrew Rosen.

Speaker Change #113: I mean the.

Speaker Change #114: <unk> sure.

Speaker Change #114: And we couldnt be more excited about the team.

Speaker Change #114: Couldn't be more excited about the opportunities that we're going to pursue together. So let me start there but we.

Carlos E. Alberini: But you know, we just have a lot to do. We see two huge opportunities. One is to really increase the product assortment that the company operates with.

Speaker Change #114: We have a lot to do we see.

Speaker Change #114: Two huge opportunities one is to really increase the <unk>.

Speaker Change #115: Alex Assortments.

Speaker Change #115: Company has operated with.

Speaker Change #115: And the second Big thing is about making this brand global just bringing more into the international landscape.

Carlos E. Alberini: And the second big thing is about making this brand global and, you know, just bringing more into the international landscape. And we are working on both fronts, you know, the two teams are. And 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 a store presence in some of the key cities.

We are working on both fronts.

Speaker Change #115: The two teams are and and.

Speaker Change #115: And we believe that that in order to represent the brand appropriately and give us the kind of brand awareness that the brand needs.

Speaker Change #115: Especially in a region like the European region.

Speaker Change #115: We definitely need store presence in some of the key cities. So we have been looking into the opportunities that could be available to us. The great thing is that as you know we have a major infrastructure and a great platform at guess and with an amazing team that is.

Carlos E. Alberini: So we have been looking into the opportunities that could be available to us. The great thing is that, as you know, we have a major infrastructure and a great platform, and an amazing team that is represented in multiple centers in the European market. And that whole team has been mobilized to really look for this opportunity. Now, you know, we haven't selected anything yet, but you know, we are moving very quickly.

Speaker Change #115: Senate in multiple centers.

Speaker Change #115: The European market and that.

Speaker Change #115: That whole team has been mobilized to really look for these opportunities.

Speaker Change #115: Now just we haven't selected anything yet, but we're moving very quickly and then there is also a big opportunity on the product side to really look at opportunities for.

Carlos E. Alberini: And then there is also a big opportunity on the product side to really look at opportunities for, you know, additional product categories that today may be represented inside the assortment that the brand offers, but that they have, they show an opportunity to be bigger businesses. And we are also thinking about a licensing model for some of those categories as well. With respect to stores in the domestic business and market, you're right. I mean, the company has only 34 stores, and we think that there is an opportunity to be expanded, you know, in a bigger way. But we are going slowly.

Additional product categories.

Speaker Change #115: Our debt today, maybe representative inside the assortment that <unk> brand offers but but that they have they show.

Speaker Change #115: An opportunity to be bigger businesses.

Speaker Change #115: And we are thinking about also licensing model for some of those categories as well.

Speaker Change #115: With respect to <unk>.

Speaker Change #115: Stores.

Speaker Change #115: And the domestic business and market.

Speaker Change #115: Right.

Speaker Change #115: The company has only 34 stores in.

Speaker Change #115: We think that there is an opportunity to be expanded.

Speaker Change #115: And in a bigger way.

Speaker Change #115: We are going slowly the great thing is that this company did not have full access to capital in the past.

Speaker Change #115: The previous ownership and we think that we can provide that so there is a lot more flexibility to move into.

Speaker Change #115: That type of expansion, but we are going to go slowly and again this is.

Carlos E. Alberini: And again, this is just what Andrew Rosen and the team are thinking about all these things. We are working on putting a new plan together, but, you know, things are going to take some time, and we're going to move carefully and be very judicious with the way we employ capital. The great thing is that their retail business is highly successful. You know, they just have great productivity in the stores that they do have.

Andrew Rosen: Just Andrew Rosen.

Andrew Rosen: The teams are thinking about all the things we are working on putting a new plan together, but you know how things are going to take some time and we're going to move carefully and.

Andrew Rosen: Barry.

Andrew Rosen: Additionally, with the way, we deploy capital the great thing is that there.

<unk> retail business is highly successful.

Andrew Rosen: Just they have.

Andrew Rosen: Great productivity in the stores that they do have I think at every single store is it produces.

Andrew Rosen: Positive cash flow and.

Andrew Rosen: We would expect that that type of.

Andrew Rosen: Experience will be replicated with new stores.

Speaker Change #116: Of course, we have incredible relationships with landlords and that is also the case with Andrew and his team are driving inbound.

Carlos E. Alberini: And we are working together to really maximize those relationships and make sure that we are, you know, just teaming up on things that are important to the brand and growth. So, we couldn't be more excited. And I know that it's reasonably early.

Andrew Rosen: <unk>.

Andrew Rosen: Our working together to really maximize those relationships and make sure that that.

Andrew Rosen: We are.

Just teaming up on things that are important to the brands and the growth. So we couldnt be more excited I know that is reached if.

Andrew Rosen: Reasonably early.

Carlos E. Alberini: The product seems to be working really well. You know, just our partners, you know, I'm talking about the partner stores, and the people that are buying the brand are super excited about the collections. And as a result, you know, we see a very nice trend in our wholesale business, and that should also translate into the retail business, when the same product is sold at the point of sale, you know, in retail. Same thing with the e-commerce business. So, you know, we're all very, very happy and excited about the future for the brand and for us together. Right, just a quick follow-up.

Andrew Rosen: Product seems to be working really well in our just our partners and I'm talking about department stores and other people that are buying the brand.

We're super excited about the collections and and.

Andrew Rosen: And as a result, we see a very nice trend in our wholesale business.

Andrew Rosen: Should also translate into.

Andrew Rosen: Our retail business on the same product.

Andrew Rosen: So that at.

Andrew Rosen: At the point of sale in our retail same thing with the ecommerce business. So overall very very happy and excited about the future for the brands for a path together.

Andrew Rosen: Yes.

Speaker Change #117: Great just a quick follow up so.

Eric Martin Beder: So, you know, for the first time, you talked about the platform being leveraged for other brands and being able to take it, like Rag & Bone, to kind of the next level. Now, when you look out longer term, three, four, six, whatever amount of years, do you see Guess as kind of this multi-branded platform that leverages its worldwide connections to have like three or four of these different brands? And I guess that acquisition, or is that a combination of acquisition and internal like you're doing with Guess Genes?

Speaker Change #118: For the first time, you talked about platform being levered for other brands and being able to take it Mike ranking below kind of the next level.

Speaker Change #118: Look out longer term here.

Speaker Change #118: For whatever amount of years.

Speaker Change #118: You see gas.

Speaker Change #119: This multi branded.

Speaker Change #119: Last form that Leverages its worldwide connections.

Speaker Change #119: Like three or four of these different brands.

Speaker Change #120: And I guess is that acquisition or is that a combination of acquisition and internal like you're doing with cash teens. Thank you.

Carlos E. Alberini: Thank you. Yes, thank you, Eric. Yes, no, I mean, we do believe that the power of this platform is pretty significant. And we do think that there is an opportunity here to bring other businesses through that platform, you know, whether it's internally developed brands or segmented brands. You know, just the Guess Jeans example is a great one where, you know, it's not something that we necessarily fully develop because it is absolutely anchored in our heritage and what Guess, you know, just has in its DNA.

Yes, Thank you Eric.

Speaker Change #121: Yes, no I mean.

Speaker Change #122: We do believe that the power of this platform is pretty significant and.

Speaker Change #122: And we do think that there is an opportunity here to bring other businesses through that platform, whether it's from internally developed.

Speaker Change #122: Our brands are segmented brands.

Speaker Change #122: The <unk> example is a great one where it's not something that we necessarily fully developed but because it is absolutely anchored in our heritage in wet gas.

Carlos E. Alberini: But it's a separate brand, and it's definitely an incremental business, which, by the way, is doing very, very well. And we are excited about the opportunity for growth with that brand. But that is just an example.

Speaker Change #122: Yes.

Speaker Change #122: <unk> DNA.

Speaker Change #122: It's a separate brands.

Speaker Change #122: Definitely on incremental business, which by the way is doing very very well and we are excited about the opportunity for growth with that brand.

But that is just an example, Brian bone is another Great example, where we can use the platform that has been built over the last 43 years and as Paul and his brother started the business.

Speaker Change #122: Yes.

Speaker Change #122: Be able to really optimize and grow those those different businesses.

Speaker Change #122: I think that it will be super premature to start thinking about okay. Now now we're going to add another one and another one I think.

Speaker Change #122: Right now we are fully focused on.

Speaker Change #122: Just.

Speaker Change #122: Growing our core business, which is a big one but offer us a lot of opportunities and we are definitely putting a lot of energy into the rag and bone.

Carlos E. Alberini: And we are definitely putting a lot of energy into the Dragon Bone acquisition strategy. The good thing is that that brand is being managed as an independent brand and is autonomous, and we have a great team. So, you know, just while obviously we want to coordinate activities and work together and weigh in on the strategic direction that the brand has and the company, you know, we are giving, you know, just a lot of power and decision-making, you know, just opportunities to the team to do their job.

Speaker Change #122: Our acquisition strategy.

Speaker Change #122: The good thing is that that brand is being managed as an independent brand and autonomous.

Speaker Change #122: We have a great team. So obviously, we want to coordinate activities and work together and weigh in on the strategy strategic direction of the brand has the company.

We are giving just a lot of power and decision making.

Speaker Change #122: Just opportunities to the team to do their job and we are very happy with that because again the team is super strong.

Carlos E. Alberini: And we are very happy with that because, again, the team is super strong. So, we want this to be successful before we think about the next one and the next one. But, you know, don't think that that means that we don't think that, you know, other brands could be incorporated into this portfolio.

Speaker Change #122: So we want this to be successful before we think about the next one is an excellent.

Speaker Change #122: Yes.

Speaker Change #122: I think that that doesn't mean that that means that we don't think that that.

Speaker Change #122: Yes.

Speaker Change #122: Other brands could be incorporated into this portfolio. We believe strongly that that will be the case, but we wanted to.

Carlos E. Alberini: We believe strongly that that will be the case, but we want to make every move with a lot of care, a lot of attention, and a lot of energy. And that's what we're doing. Thank you. And with that, I will conclude the Q&A session and turn it back to Carlos Alberini for closing comments. Thank you very much, Operator. Well, thank you all for your participation today. We are very pleased with our performance, and we are very excited about our future.

Speaker Change #122: Every move with a lot of care a lot of attention.

Speaker Change #122: And a lot of energy and Thats what were doing.

Speaker Change #122: Yes.

Speaker Change #123: Thank you.

And with that I will conclude the Q&A session and turn it back to colors are there any for closing comments.

Speaker Change #124: Thank you very much operator, well. Thank you all for your participation today, we are very pleased with our performance and we are very excited about our future.

Carlos E. Alberini: Our team is energized to grab what I call our inflection point opportunity and take our company to the next level of growth and profitability. You know, I speak on behalf of Paul and myself in saying that we have a great team and it's very exciting to be part of this journey together right now. So thank you all for all your support for our company and our story, and we'll speak to you again soon. Have a great day. Thank you, and with that, we conclude our conference call. Thank you all for participating, and have a great day.

Speaker Change #124: Our team is energized to grab what I call, our inflection point opportunity.

Speaker Change #124: Take our company to the next level of growth and profitability.

Speaker Change #125: I know I speak on behalf of Paul and myself.

Speaker Change #125: In saying that we have a great team and it's very exciting to be part of this journey together right now so thank you all for all your support for our company and our story and we will speak again soon have a great day.

Speaker Change #126: Thank you and with that we conclude our conference call. Thank you all for participating and have a great day.

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