8-K: Guess? Stockholders Approve Take-Private Merger; Q3 Earnings Beat

Guess? Inc. stockholders approved the take-private merger with Authentic Brands Group, while the company reported a 7% revenue increase and a return to GAAP net earnings for the third quarter of fiscal year 2026.

Summary

• Stockholders approved the take-private merger agreement with Authentic Brands Group LLC and Glow Holdco 1, Inc. on November 21, 2025.
• The merger will result in Guess? becoming a wholly-owned subsidiary of Glow Holdco 1, Inc. and ceasing to be a publicly traded company.
• Shareholders (excluding Rolling Stockholders) will receive $16.75 per share in cash.
• Third-quarter fiscal year 2026 net revenue increased 7% to $791.4 million, or 5% in constant currency, compared to the prior-year quarter.
• GAAP net earnings for Q3 FY26 were $25.6 million, or $0.48 per diluted share, a significant improvement from a GAAP net loss of $23.4 million, or $0.47 per diluted share, in the prior-year quarter.
• Adjusted net earnings for Q3 FY26 increased 8% to $19.0 million, or $0.35 per diluted share, compared to $17.7 million, or $0.34 per diluted share, in the prior-year quarter.
• The company's Europe segment saw revenues increase 10% (6% constant currency) and Americas Wholesale revenues increased 28% (26% constant currency).
• A quarterly cash dividend of $0.225 per share was approved, payable on December 26, 2025, to shareholders of record as of December 10, 2025.

Sentiment

Score: 7

Explanation: The sentiment is positive due to the significant improvement in GAAP net earnings, strong revenue growth, and the successful stockholder approval of the take-private merger, which offers a clear exit strategy for public shareholders at a fixed price. However, declining operating margins and softness in some segments temper the overall positivity.

Positives

• Total net revenue increased 7% to $791.4 million in Q3 FY26, and 5% in constant currency, demonstrating strong top-line growth.
• GAAP net earnings significantly improved to $25.6 million ($0.48 EPS) in Q3 FY26, reversing a GAAP net loss of $23.4 million ($-0.47 EPS) in the prior-year quarter.
• Adjusted net earnings increased 8% to $19.0 million ($0.35 EPS) in Q3 FY26, up from $17.7 million ($0.34 EPS) in the prior-year quarter.
• Europe segment revenues grew 10% in U.S. dollars and 6% in constant currency, with retail comparable sales up 7% in U.S. dollars.
• Americas Wholesale revenues showed robust growth, increasing 28% in U.S. dollars and 26% in constant currency.
• The fair value remeasurement of derivatives related to convertible senior notes resulted in a net unrealized gain of $17.9 million in Q3 FY26, compared to a $39.8 million loss in the prior-year quarter.
• Americas Retail business showed continued improvement in same store sales versus the prior quarter, despite an overall decrease.

Negatives

• GAAP earnings from operations decreased 45.2% to $23.2 million in Q3 FY26, from $42.3 million in the prior-year quarter.
• GAAP operating margin decreased 2.8% to 2.9% in Q3 FY26, from 5.7% in the prior-year quarter, primarily due to higher expenses (proposed transaction costs, store costs, restructuring charges), higher markdowns, and higher asset impairment charges.
• Adjusted earnings from operations decreased 13.5% to $37.0 million, and adjusted operating margin decreased 1.1% to 4.7%.
• Americas Retail revenues decreased 2% in both U.S. dollars and constant currency, with retail comparable sales decreasing 3%.
• Asia revenues decreased 8% in U.S. dollars and 6% in constant currency, with retail comparable sales decreasing 5%.
• Licensing revenues decreased 6% in both U.S. dollars and constant currency.
• Operating margins for Americas Retail, Asia, and Licensing segments all declined.
• The company has suspended its financial guidance due to the pending take-private transaction.

Risks

• The Proposed Transaction may not be completed in a timely manner or at all.
• Failure to satisfy any conditions to the proposed pre-closing restructuring or the consummation of the Proposed Transaction, including receipt of certain regulatory approvals.
• The announcement or pendency of the Proposed Transaction could negatively affect the company's business relationships, operating results, and business generally.
• Difficulty in retaining and hiring key personnel and maintaining relationships with key business partners, customers, suppliers, licensees, and landlords due to the Proposed Transaction.
• Unexpected costs, charges, or expenses resulting from the Proposed Transaction.
• Litigation relating to the Proposed Transaction that has been or could be instituted against the parties or their directors, managers or officers.
• Certain restrictions during the pendency of the Proposed Transaction may impact the company's ability to pursue business opportunities or strategic transactions.
• Impacts related to sanctions and export controls targeting Russia and the war in Ukraine.
• Impacts related to the Israel-Hamas war.
• Impacts related to public health crises.
• Changes to estimates related to impairments, inventory, and other reserves.
• Unexpected or unseasonable weather conditions, catastrophic events, or natural disasters.
• Obligations or changes in estimates arising from new or existing litigation, income tax, and other regulatory proceedings.
• Errors in assumptions, estimates, and judgments related to tax matters.
• Changes in U.S. or foreign income tax or tariff policy, including tariffs on imports.
• Violations of, or changes to, domestic or international laws and regulations.
• Risks associated with acts or omissions of licensees and third-party vendors, including non-compliance with vendor code of conduct.
• Risks associated with cyber-security incidents and other cyber-security risks.
• Changes in economic, political, social, and other conditions affecting foreign operations and sourcing, including currency fluctuations, global income tax rates, and market conditions.
• Risks relating to activist investor activity.

Future Outlook

The company has suspended its practice of providing and updating financial guidance due to the pending take-private transaction with Authentic Brands Group. The Proposed Transaction is expected to close in the fourth quarter of fiscal year 2026, subject to specified conditions, including standard regulatory approvals, some of which remain pending.

Management Comments

• "We are pleased with our third quarter performance, with revenue growth of 7% in U.S. dollars and 5% in constant currency, driven by a strong performance of our Americas Wholesale and Europe businesses."
• "In our Americas Retail business, despite continued softness, we were encouraged by the continued improvement in same store sales versus the prior quarter."

Industry Context

The approval of the take-private merger reflects a broader trend in the retail and fashion industry where established brands seek strategic partnerships or private ownership to navigate market complexities, optimize operations, and potentially accelerate growth away from public market scrutiny. The strong performance in Europe and Americas Wholesale, alongside challenges in Americas Retail and Asia, indicates a mixed global retail environment, with some regions and channels outperforming others. The acquisition of rag & bone in partnership with WHP Global also highlights a strategy of brand portfolio expansion and leveraging brand management expertise.

Corporate Governance

Legal Proceedings

• The forward-looking statements section mentions potential litigation relating to the Proposed Transaction that has been or could be instituted against the parties to the Merger Agreement or their respective directors, managers or officers, including the effects of any outcomes related thereto.

Related Party Transactions

• The Proposed Transaction involves 'certain existing Company shareholders (collectively, the Rolling Stockholders), including Maurice Marciano, Paul Marciano, Nicolai Marciano, and Carlos Alberini and certain of their respective trusts, foundations and affiliates' acquiring 49% of the company's intellectual property and 100% of its operating assets, indicating a related party transaction.

Stakeholder Impact

• Shareholders (excluding Rolling Stockholders) will receive $16.75 per share in cash, providing a liquidity event and a fixed return, but removing future public market investment opportunities.
• Rolling Stockholders (including management) will acquire significant ownership and control in the private entity, maintaining their stake in the company's intellectual property and operating assets.
• Employees may be impacted by potential changes in retention and hiring, as the filing notes risks related to the company's ability to 'retain and hire key personnel' due to the Proposed Transaction.
• Customers, Suppliers, Licensees, and Landlords face potential disruptions or changes in business relationships, as the filing highlights risks to 'maintaining relationships with key business partners and customers, suppliers, licensees, landlords and others with whom it does business' due to the merger.
• Regulatory Authorities are involved as the merger is subject to 'standard regulatory approvals,' implying ongoing engagement and compliance requirements.

Next Steps

• The Proposed Transaction is expected to close in the fourth quarter of fiscal year 2026.
• Completion of the Proposed Transaction is subject to specified conditions, including standard regulatory approvals, some of which remain pending.
• Upon completion of the Merger, the company's common stock will be delisted from the New York Stock Exchange and deregistered under the Exchange Act.
• The company will file its Quarterly Report on Form 10-Q for the third fiscal quarter ended November 1, 2025, with the SEC.
• A quarterly cash dividend of $0.225 per share will be paid on December 26, 2025.

Key Dates

Keywords

Guess?, GES, Authentic Brands Group, Merger, Take-Private, Q3 Earnings, Financial Results, Retail, Apparel, Fashion, Stockholder Vote, Operating Margin, Revenue Growth, EPS, Corporate Governance