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What changed in GUESS INC's 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of GUESS INC's 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+668 added−659 removedSource: 10-K (2025-04-11) vs 10-K (2024-04-01)

Top changes in GUESS INC's 2026 10-K

668 paragraphs added · 659 removed · 550 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

109 edited+22 added−16 removed54 unchanged
Biggest changeAccessories stores and MARCIANO stores. During fiscal 2024, we opened 8 new stores and closed 23 stores in the Americas, ending the year with 356 stores. This store count does not include 29 directly operated concessions in Mexico. We directly operated our retail stores and concessions in Mexico and Brazil through our majority-owned joint ventures.
Biggest changeThis store count does not include 32 directly operated concessions in Mexico. We directly operated our retail stores and concessions in Mexico, Chile, Peru and Brazil through our majority-owned joint ventures. • e-Commerce. Our Americas Retail segment also includes our directly operated retail and other marketplace websites in the United States, Canada, Mexico, Brazil, Peru and Chile.
The lines include full collections of clothing, including jeans, pants, skirts, dresses, activewear, shorts, blouses, shirts, jackets, knitwear and intimate apparel. In addition, we selectively grant licenses to design, manufacture and distribute a broad range of products that complement our apparel lines, including eyewear, watches, handbags, footwear, kids’ and infants’ apparel, outerwear, fragrance, jewelry and other fashion accessories.
The lines include full collections of clothing, including jeans, pants, skirts, dresses, activewear, shorts, blouses, shirts, jackets, knitwear, outerwear and intimate apparel. In addition, we selectively grant licenses to design, manufacture and distribute a broad range of products that complement our apparel lines, including eyewear, watches, handbags, footwear, kids’ and infants’ apparel, fragrance, jewelry and other fashion accessories.
As part of our omni-channel initiative, e-commerce orders in certain regions may be fulfilled from our distribution centers, or from our retail stores, or both. Wholesale Distribution. We sell through both domestic and international wholesale distribution channels as well as retail stores and concessions operated by certain wholesale partners. • Wholesale.
As part of our omni-channel initiative, e-commerce orders in certain regions may be fulfilled from our distribution centers, from our retail stores, or both. Wholesale Distribution. We sell through both domestic and international wholesale distribution channels as well as retail stores and concessions operated by certain wholesale partners. • Wholesale.
In countries where the brand is well known, we operate through showrooms where agents and distributors can view our line and place orders. We currently have showrooms in key cities such as Barcelona, Düsseldorf, Istanbul, Lugano, Munich, Paris, Lisbon, Florence, Moscow and Warsaw.
In countries where the brand is well known, we operate through showrooms where agents and distributors can view our line and place orders. We currently have showrooms in key cities such as Florence, Barcelona, Düsseldorf, Istanbul, Lugano, Munich, Paris, Lisbon, Moscow and Warsaw.
Customers retain the ability to request early shipment of backlog orders, delay shipments or 4 Table of Contents cancel orders depending on their needs. Revenues from sales to our wholesale licensed stores are also recognized as wholesale sales within our European wholesale operations.
Customers retain the ability to request early shipment of backlog orders, delay shipments or cancel orders depending on their needs. Revenues from sales to our wholesale licensed stores are also recognized as wholesale sales within 4 Table of Contents our European wholesale operations.
Advertising and Marketing Our advertising, public relations and marketing strategy is designed to promote a consistent high impact image which endures regardless of changing consumer trends. While our advertising promotes products, the primary emphasis is on brand image.
Advertising and Marketing Our advertising, public relations and marketing strategy is designed to promote a consistent high impact image which endures regardless of changing consumer trends. While our advertising promotes our products, the primary emphasis is on brand image.
Our Guess List loyalty program has experienced growth in its overall member engagement numbers through the introduction of experiential incentives and unique member content. The programs are also used to promote new products to our customers which in turn increases traffic in the stores and online. The loyalty programs generate substantial repeat business that might otherwise go to competing brands.
Our Guess List loyalty program has experienced growth in its overall member engagement numbers through the introduction of experiential incentives and unique member content. The programs are also used to promote new products to our customers which in turn increases traffic in stores and online. The loyalty programs generate substantial repeat business that might otherwise go to competing brands.
Our expectations of everyone at GUESS? to support a diverse and welcoming workplace are spelled out in the GUESS?, Inc. Code of Ethics. We expect all at GUESS? to promptly report and investigate concerns about possible discrimination, as appropriate, and to facilitate this, we maintain an open-door policy that fosters honest and open communication.
Our expectations of everyone at GUESS? to support a welcoming workplace are spelled out in the GUESS?, Inc. Code of Ethics. We expect all at GUESS? to promptly report and investigate concerns about possible discrimination, as appropriate, and to facilitate this, we maintain an open-door policy that fosters honest and open communication.
We sell both our apparel and certain accessories products under our GUESS? and MARCIANO brand concepts through our wholesale channel, operating primarily through two seasons, Spring/Summer and Fall/Winter. Generally, our Spring/Summer sales campaign is from April to September with the related shipments occurring primarily from November to April.
We sell both our apparel and certain accessories products under our GUESS?, MARCIANO and GUESS JEANS brand concepts through our wholesale channel, operating primarily through two seasons, Spring/Summer and Fall/Winter. Generally, our Spring/Summer sales campaign is from April to September with the related shipments occurring primarily from November to April.
Our Heritage customers, typically aged 40 years and older, are very loyal and have been shopping with us for years. We appeal to these customers through GUESS and specialty product lines that include MARCIANO, a more sophisticated fashion line targeted to women and men.
Our Heritage customers, typically aged 40 years and older, are very loyal and have been shopping with us for years. We appeal to these customers through GUESS and specialty product lines that include MARCIANO, a more sophisticated fashion line targeted to women.
We seek to achieve efficient and timely delivery of our products, combining global and local sourcing. Almost all of our products are acquired as full package purchases where we design and source product and the vendor delivers the finished product.
We seek to achieve efficient and timely delivery of our products, combining global and local sourcing. Almost all of our products are acquired as full package purchases where we design and source products and the vendor delivers the finished products.
Our European direct-to-consumer network is comprised of brick-and-mortar retail stores and concessions and e-commerce sites. • Retail stores and concessions. Our European retail stores and concessions are primarily comprised of a mix of directly operated GUESS? retail and outlet stores, MARCIANO retail stores, GUESS? Accessories retail and outlet stores, GUESS? Footwear stores and GUESS? Kids stores.
Our European direct-to-consumer network is comprised of brick-and-mortar retail stores and concessions and e-commerce sites. • Retail stores and concessions. Our European retail stores and concessions are primarily comprised of a mix of directly operated GUESS? retail and outlet stores, MARCIANO retail stores, GUESS? Accessories retail and outlet stores, GUESS? Footwear stores, GUESS?
Compensation and Benefits We are committed to providing competitive compensation and benefits to attract and retain a diverse and talented workforce. We are also committed to maintaining pay parity throughout our organization, conducting annual assessments.
Compensation and Benefits We are committed to providing competitive compensation and benefits to attract and retain a talented workforce. We are also committed to maintaining pay parity throughout our organization, conducting annual assessments.
Our U.S. and Canadian online sites are fully integrated with our customer relationship management (“CRM”) system and loyalty programs. Omni-channel initiatives that we have already deployed in the U.S. and Canada include “buy online, pick-up in stores” or “buy online, return in stores” and “order from store” as well as mobile-optimized commerce sites and smartphone applications.
Our U.S. and Canadian online sites are fully integrated with our customer relationship management (“CRM”) system and loyalty programs. Omni-channel initiatives that we have already deployed in the United States. and Canada include “buy online, pick up in stores” or “buy online, return in stores” and “order from store” as well as mobile-optimized commerce sites and smartphone applications.
We also sell product to retail partners who operate licensed retail stores and concessions, which allows us to expand our international operations with a lower level of capital investment while still closely monitoring store development and merchandise programs and marketing activations in order to protect the integrity of the GUESS? brand.
We also sell products to retail partners who operate licensed retail stores and concessions, which allows us to expand our international operations with a lower level of capital investment while still closely monitoring store development and merchandise programs and marketing activations in order to protect the integrity of the GUESS? brand.
With our continuous effort, since fiscal 2020 we continued to undergo a third-party reasonable assurance examination indicating our sustainability report was prepared in accordance with the GRI, SASB and GHG Protocol. Protecting Our Environment We are committed to protecting our environment and addressing climate change issues through product responsibility, water stewardship, and GHG emissions reduction.
Since fiscal 2020, we continued to undergo a third-party reasonable assurance examination indicating our sustainability report was prepared in accordance with the GRI, SASB and GHG Protocol. Protecting Our Environment We are committed to protecting our environment and addressing climate change issues through product responsibility, water stewardship, and GHG emissions reduction.
We plan to release our next ESG report in summer 2025, covering fiscal 2024 and fiscal 2025, which will also be available on our website at the foregoing link. This site provides information on our policies, social impact and environmental programs, as well as our sustainability strategy, data and reporting.
We plan to release our next ESG report in fiscal 2026, covering fiscal 2024 and fiscal 2025, which will also be available on our website at the foregoing link. This site provides information on our policies, social impact and environmental programs, as well as our sustainability strategy, data and reporting.
Through the GUESS Animal Welfare Policy, guided by international best practice in accordance with “The Five Freedoms for Animal Welfare” by the Farm Animal Welfare Council, our suppliers are prohibited from using any fur, mohair, angora, exotic leather or any other parts from vulnerable, endangered, or wild-caught species.
Through the GUESS Animal Welfare Policy, guided by international best practices in accordance with “The Five Freedoms for Animal Welfare” by the Farm Animal Welfare Council, our suppliers are prohibited from using any fur, mohair, angora, exotic leather or any other parts from vulnerable, endangered, or wild-caught species.
We and our partners also have a small number of underwear, Gc watch and footwear concept stores. This allows us to target the various demographics in each region through dedicated store concepts that market each brand or concept specifically to the desired customer population.
We and our partners also have a small number of underwear and footwear concept stores. This allows us to target the various demographics in each region through dedicated store concepts that market each brand or concept specifically to the desired customer population.
In addition to earning rewards with the program, our loyalty members may receive other benefits including invitations to special VIP events in our stores, double points during their birthday month and access to seasonal savings, depending on their purchasing tier.
In addition to earning rewards with such program, our loyalty members may receive other benefits including invitations to special VIP events in our stores, double points during their birthday month and access to seasonal savings, depending on their purchasing tier.
During fiscal 2024, we improved and stabilized our digital platforms, implemented more payment methods, continued to improve our web front, expanded our shopping channels, enhanced our omni-channel experience and continued to develop mobile-based initiatives to support our wholesale and direct-to-consumer businesses.
During fiscal 2025, we improved and stabilized our digital platforms, implemented more payment methods, continued to improve our web front, expanded our shopping channels, enhanced our omni-channel experience and continued to develop mobile-based initiatives to support our wholesale and direct-to-consumer businesses.
We replicated the same in fiscal 2024 while working on a long term strategy to reduce our GHG emissions. We will also continue implementing a variety of energy efficiency and renewable energy strategies and working with our key vendors to implement energy efficiency and renewable energy plans.
We replicated the same in fiscal 2025 while working on a long-term strategy to reduce our GHG emissions. We will also continue implementing a variety of energy efficiency and renewable energy strategies and working with our key vendors to implement energy efficiency and renewable energy plans.
Our Millennial customers are typically between the ages of 25 to 39 and Generation Z customers are typically between the ages of 10 to 24 years old. These two target consumer groups shop streetwear and vintage inspired trends, viewing GUESS as accessible luxury.
Our Millennial customers are typically between the ages of 25 to 39, and our Generation Z customers are typically between the ages of ten to 24 years old. These two target consumer groups typically shop streetwear and vintage inspired trends, viewing GUESS as accessible luxury.
As of the date of this Annual Report, we have majority-owned joint ventures in Brazil, the Canary Islands, Mexico (which also operates through subsidiaries in Chile and Peru) and Portugal and a minority-owned joint venture in South Africa.
As of the date of this Annual Report, we have majority-owned joint ventures in Brazil, the Canary Islands, Mexico (which also operates through subsidiaries in Chile and Peru), the Middle East, Portugal and a minority-owned joint venture in South Africa.
Many department stores have more than one shop-in-shop, with each one featuring women’s, men’s or kids’ apparel or handbags. We also sell product to licensed retail stores and concessions operated by certain wholesale customers.
Many department stores have more than one shop-in-shop, with each one featuring women’s, men’s or kids’ apparel or handbags. We also sell products to licensed retail stores and concessions operated by certain wholesale customers.
Since our inception, Paul Marciano, our Chief Creative Officer and Director, has had principal responsibility for the GUESS? brand image and creative vision. Throughout our history, we have maintained a high degree of consistency in our advertisements by using similar themes and images, including our signature black and white print advertisements and iconic logos.
Since our inception, Paul Marciano, co-founder and Chief Creative Officer, has had principal responsibility for the GUESS? brand image and creative vision. Throughout our history, we have maintained a high degree of consistency in our advertisements by using similar themes and images, including our signature black and white print advertisements and iconic logos.
Given the global instability and challenges within the supply chain and geopolitical environment, we are building an agile and lean supply chain by identifying new suppliers that can contribute to reduce our dependency on certain countries of origin. 7 Table of Contents Additionally, offering an assortment of global products continues to be an area of focus.
Given the global instability and challenges within the supply chain and geopolitical environment, we are building an agile and lean supply chain by identifying new suppliers that can contribute to reduce our dependency on certain countries of origin. Additionally, offering an assortment of global products continues to be an area of focus.
Our global supply chain Social Responsibility program reflects our strong commitment to help our suppliers implement best practices in safe and decent work and achieve meaningful improvements in the lives of their workers. Our program highlights three areas—factory approvals, factory monitoring and remediation, and supplier training and education.
Our global supply chain’s Social Responsibility Program reflects our strong commitment to help our suppliers implement best practices in safe and decent work environments and achieve meaningful improvements in the lives of their workers. Our program highlights three areas—factory approvals, factory monitoring and remediation, and supplier training and education.
Although the level and nature of competition differs among our product categories and geographic regions, we believe that we differentiate 9 Table of Contents ourselves from our competitors by offering a global lifestyle brand on the basis of our global brand image and wide product assortment comprising both apparel and accessories.
Although the level and nature of competition differs among our product categories and geographic regions, we believe that we differentiate ourselves from our competitors by offering a global lifestyle brand on the basis of our global brand image and wide product assortment comprising both apparel and accessories.
We deploy a variety of media focused on national and international contemporary fashion/beauty, lifestyle and celebrity outlets. In recent years, we have also expanded our efforts into influencer marketing, digital advertising with leading fashion and lifestyle websites and advertising on social media platforms, including YouTube, Facebook, Instagram, X, Pinterest, Reddit, Snapchat, TikTok and global search engines.
We deploy a variety of media that is focused on national and international contemporary fashion/beauty, lifestyle and celebrity outlets. In recent years, we have also expanded our efforts into influencer and affiliate marketing, digital advertising with leading fashion and lifestyle websites and advertising on social media platforms, including YouTube, Facebook, Instagram, X, Pinterest, Snapchat, TikTok and global search engines.
Additionally, the U.S. business is partnered with Customs Trade Partnership Against Terrorism (“CTPAT”), which expedites movement of goods into our U.S. trade lanes. We have been CTPAT certified for several years, and complete our recertification annually.
Additionally, the U.S. business is partnered with the Customs Trade Partnership Against Terrorism (“CTPAT”), which expedites movement of goods into our U.S. trade lanes. We have been CTPAT certified for several years and complete our recertification 9 Table of Contents annually.
As of February 3, 2024, these locations included approximately 700 “shop-in-shops”—designated selling areas within a department store—offering a wide array of our products and incorporating GUESS? signage and fixture designs. These shop-in-shops, managed by the department stores, allow us to reinforce the GUESS? brand image with our customers.
As of February 1, 2025, these locations included approximately 700 “shop-in-shops”—designated selling areas within a department store—offering a wide array of our products and incorporating GUESS? signage and fixture designs. These shop-in-shops, managed by the department stores, allow us to reinforce the GUESS? brand image with our customers.
The use of feathers and downs or other animal derived hair is subject to limitation and use with caution. Historically, denim production factories require the use of many chemicals, which could impact a factory’s wastewater discharge.
The use of feathers and downs or other animal derived hair is subject to limitation and use with caution. 12 Table of Contents Historically, denim production factories require the use of many chemicals, which could impact a factory’s wastewater discharge.
We also plan to strengthen communities on various social media platforms, which enable us to provide timely information in an entertaining fashion to consumers about our history, products, special events, promotions and store locations, while allowing us to receive and respond directly to customer feedback.
We also plan to strengthen communities through influencer marketing and various social media platforms, which enable us to provide timely information in an entertaining fashion to consumers about our history, products, special events, promotions and store locations, while allowing us to receive and respond directly to customer feedback.
Employee Safety and Well-Being We are committed to the safety, health, and overall well-being of each of our employees and their families, providing a wide array of physical, emotional and social support. Our GUESS Wellness 360 online portal in the U.S. offers our employees physical and mental wellness support using challenges, contests, and prizes.
Employee Safety and Well-Being We are committed to the safety, health, and overall well-being of each of our employees and their families, providing a wide array of physical, emotional and social support. Our GUESS Wellness 360 online portal in the United States offers our employees physical and mental wellness support using challenges, contests, and prizes.
During fiscal 2024, our two largest wholesale customers accounted for a total of approximately 3.8% of our consolidated net revenue. 5 Table of Contents Asia Segment In our Asia segment, we sell our products through direct-to-consumer and wholesale channels throughout Asia and the Pacific. Asian Direct-to-Consumer.
During fiscal 2025, our two largest wholesale customers accounted for a total of approximately 3.9% of our consolidated net revenue. 5 Table of Contents Asia Segment In our Asia segment, we sell our products through direct-to-consumer and wholesale channels throughout Asia and the Pacific. Asian Direct-to-Consumer.
As of February 3, 2024, we operated retail websites in the Americas, Europe and Asia. We have e-commerce available to 50 countries and in 13 languages around the world. Our websites act as virtual storefronts that both sell our products and promote our brands.
As of February 1, 2025, we operated retail websites in the Americas, Europe and Asia. We have e-commerce available to 50 countries and in 13 languages around the world. Our websites act as virtual storefronts that both sell our products and promote our brands.
Our products are also sold directly to large, well-known department stores like El Corte Inglès, Galeries Lafayette and Printemps. The type of customer varies from region to region depending on both the prominence of the GUESS? brand in each region and the dominance of a particular type of retail channel in each region.
Our products are also sold directly to large, well-known department stores like El Corte Inglès, Galeries Lafayette, Printemps, Boyner, Galeria, Rinascente and P&C. The type of customer varies from region to region depending on both the prominence of the GUESS? brand in each region and the dominance of a particular type of retail channel in each region.
We remain committed to a 50% reduction of absolute Scope 1 and 2 emissions, as well as an ambitious 30% reduction of absolute Scope 3 emissions by 2030. In fiscal 2023, we continued purchasing renewable energy, solar and wind in the Americas, Europe and Asia, equivalent to power approximately 25% of our stores globally.
We remain committed to a 50% reduction of absolute Scope 1 and 2 emissions, as well as an ambitious 30% reduction of absolute Scope 3 emissions by 2030. In fiscal 2024, we continued purchasing renewable energy, solar and wind credits in the Americas, Europe and Asia, equivalent to power approximately 35% of our stores globally.
We currently have various domestic and international licenses that include eyewear, watches, handbags, footwear, kids’ and infants’ apparel, outerwear, undergarments and sleepwear, fragrance, jewelry and other fashion accessories; and include licenses for the design, manufacture and distribution of GUESS? branded products in markets which include Africa, Asia, Australia, Europe, the Middle East, Central America, North America and South America.
We currently have various domestic and international licenses that include eyewear, watches, handbags, footwear, fragrance, jewelry and other fashion accessories; and include licenses for the design, manufacture and distribution of GUESS? branded products in markets which include Africa, Asia, Australia, Europe, the Middle East, Central America, North America and South America.
ITEM 1. Business. General Unless the context indicates otherwise, the terms “we,” “us,” “our” or the “Company” in this Form 10-K refer to Guess?, Inc. (“GUESS?”) and its subsidiaries on a consolidated basis.
ITEM 1. Business. General Unless the context indicates otherwise, the terms “we,” “us,” “our” or the “Company” in this Annual Report refer to Guess?, Inc. (“GUESS?”) and its subsidiaries on a consolidated basis.
In Europe, our products are sold in stores ranging from large, well-known department stores like El Corte Inglès, Galeries Lafayette and Printemps to small upscale multi-brand boutiques. Because our European wholesale business is more fragmented, we generally rely on a large number of smaller regional distributors and agents to distribute our products.
In Europe, our products are sold in stores ranging from large, well-known department stores like El Corte Inglès, Galeries Lafayette, Printemps, Boyner, Galeria, Rinascente 2 Table of Contents and P&C to small, upscale multi-brand boutiques. Because our European wholesale business is more fragmented, we generally rely on a large number of smaller regional distributors and agents to distribute our products.
All directly-sourced supplier factories go through a strict approval process before being authorized to work with Guess. To support and ensure our social compliance, we communicate our expectations to our partners through our Global Suppliers Code of Conduct (“Guess CoC”), which sets the minimum requirements for all factories where Guess branded items are manufactured.
All directly-sourced supplier factories go through a strict approval process before being authorized to work with us. To support and ensure our social compliance, we communicate our expectations to our partners through our Global Suppliers Code of Conduct (“Guess CoC”) and Human Rights Policy (“HR Policy”), which set the minimum requirements for all factories where GUESS? branded items are manufactured.
We plan to further deepen relationships with customers through an emphasis on digital marketing, and through our websites, loyalty programs, direct catalog and marketing 8 Table of Contents mailings.
We plan to further deepen relationships with customers through an emphasis on digital marketing, and through our websites, loyalty programs, direct catalog and marketing mailings.
Our U.S. distribution center is based in Louisville, Kentucky, where we use fully integrated and automated distribution systems. The bar code scanning of merchandise and distribution cartons, together with radio frequency communications, provide timely, controlled, accurate and instantaneous updates to our distribution information systems.
Logistics We utilize distribution centers at strategically located sites. Our U.S. distribution center is based in Louisville, Kentucky, where we use fully integrated and automated distribution systems. The bar code scanning of merchandise and distribution cartons, together with radio frequency communications, provide timely, controlled, accurate and instantaneous updates to our distribution information systems.
From our innovative product designers and developers working behind the scenes, to our dynamic retail store associates—and everyone in between—we are committed to making sure their diverse voices are valued, ideas are elevated, and excellence is rewarded. 10 Table of Contents Celebrating Diversity and Inclusion Our longstanding commitment to diversity and inclusion comes to life each day as we work together to maintain a fair and inclusive workplace.
From our innovative product designers and developers working behind the scenes, to our dynamic retail store associates—and everyone in between—we are committed to making sure their voices are valued, ideas are elevated, and excellence is rewarded. Workplace Culture Our longstanding commitment to workplace inclusion comes to life each day as we work together to maintain a fair and equitable workplace.
During fiscal 2024, we continued to expand the program for additional purchase orders in Europe and North America. The objective is to stop product quality issues at the origin before investing in the transportation of the goods to the final destinations.
During fiscal 2025, we continued to expand the program for additional purchase orders in Europe and North America. The objective is to stop product quality issues at the origin before investing in the transportation of the goods to the final destinations and incurring negative consequences based on quality issues.
We currently have various domestic and international licenses that include eyewear, watches, handbags, footwear, kids’ and infants’ apparel, outerwear, undergarments and sleepwear, fragrance, jewelry and other fashion accessories; and include licenses for the design, manufacture and distribution of GUESS? branded products in markets which include Africa, Asia, Australia, Europe, the Middle East, Central America, North America and South America.
We currently have various domestic and international licenses that include eyewear, watches, handbags, footwear, fragrance, jewelry and other fashion accessories; and include licenses for the design, manufacture and distribution of GUESS? branded products in markets which include Africa, Asia, Australia, Europe, the Middle East, Central America, North America and South America. Multiple Store Concepts.
Multiple Store Concepts. Our products are sold around the world primarily through six different store concepts, namely our GUESS? full-price retail stores, our GUESS? factory outlet stores, our GUESS? Accessories stores, our G by GUESS (GbG) stores, our MARCIANO stores and our GUESS? Kids stores.
Our products are sold around the world primarily through eight different store concepts, namely our GUESS? full-price retail stores, our GUESS? factory outlet stores, our GUESS? Accessories stores, our G by GUESS (GbG) stores, our MARCIANO stores, our GUESS? Kids stores, our GUESS JEANS stores and our rag & bone stores.
We offer a wide array of both employer-paid and employee-paid benefits to support our employees' overall financial, physical, and mental well-being, including, but not limited to, healthcare, retirement savings, paid time off, temporary leave, and flexible work arrangements. We also provide our employees a merchandise discount on most of our products.
We offer a wide array of both employer-paid and employee-paid benefits to support our employees’ overall financial, physical, and mental well-being, including, but not limited to, healthcare, retirement savings, paid time off, temporary leave, and flexible work arrangements.
As of February 3, 2024, we had over 5,500 trademarks in the U.S. and internationally registered trademarks or trademark applications pending with the trademark offices in over 180 countries around the world, including the U.S. From time-to-time, we adopt new trademarks in connection with the marketing of our product lines.
As of February 1, 2025, we had over 5,500 trademarks in the United States. and internationally registered trademarks or trademark applications pending with the trademark offices in over 180 countries around the world, including the United States. From time-to-time, we adopt new trademarks in connection with the marketing of our product lines.
Since its origins in New York in 2002, rag & bone has established itself as a leader in the American fashion scene, directly operating 34 stores in the U.S. and two stores in the U.K., and also available in high-end boutiques, department stores and through e-commerce globally.
Since its origins in New York in 2002, rag & bone has established itself as a leader in the American fashion scene, directly operating 37 stores in the United States and two stores in the United Kingdom, and also made available in high-end boutiques, department stores and through e-commerce globally.
Licensed retail stores and concessions operated by our retail partners were: Year Ended Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Region Stores Concessions Stores Concessions Stores Concessions United States — — — — — 1 Central and South America 29 — 34 — 34 — Total Americas 29 — 34 — 34 1 Europe and the Middle East 227 — 234 — 223 — Asia and the Pacific 295 113 294 121 306 158 Total 551 113 562 121 563 159 Licensing Operations.
Licensed retail stores and concessions operated by our retail partners were: Year Ended Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Region Stores Concessions Stores Concessions Stores Concessions United States — — — — — — Central and South America 14 — 29 — 34 — Total Americas 14 — 29 — 34 — Europe and the Middle East 213 — 227 — 234 — Asia and the Pacific 300 85 295 113 294 121 Total 527 85 551 113 562 121 Licensing Operations.
We are also continuously searching for new suppliers and sourcing opportunities in reaction to the latest trends. We have developed IT systems to capture and share key performance indicators with our partners to drive ongoing improvements. During fiscal 2024, we continued to tightly manage our vendor base to around 140 core suppliers.
We are also continuously searching for 7 Table of Contents new suppliers and sourcing opportunities in reaction to the latest trends. We have developed IT systems to capture and share key performance indicators with our partners to drive ongoing improvements. During fiscal 2025, we continued to tightly manage our vendor base to around 180 core suppliers, including rag & bone.
By setting sustainability goals to increase use of responsible materials and promote circular fashion, and by following the GUESS Eco material sourcing guide, we source over 28% sustainable materials across all brands within our product portfolios in the Americas and Europe.
By setting sustainability goals to increase use of responsible materials and promote circular fashion, and by following the GUESS ECO material sourcing guide, we sourced over 25% preferred materials across all brands within our apparel product portfolios in the Americas and Europe in fiscal 2025.
During fiscal 2024, our partners opened 25 new licensed retail stores and closed 24 stores, including stores transferred to and from our partners and other store relocations and remodels. We ended the year with 295 licensed retail stores. This store count does not include 113 apparel and accessory concessions operated by our partners in Asia.
During fiscal 2025, our partners opened 21 new licensed retail stores and closed 16 stores, including stores transferred to and from our partners and other store relocations and remodels. We ended the year with 300 licensed retail stores. This store count does not include 85 apparel and accessory concessions operated by our partners in Asia.
During fiscal 2024, we opened six new stores and closed 18 stores, including stores transferred to and from our partners and other store relocations and remodels. We ended the year with 103 directly operated stores in Asia and the Pacific. This store count does not include 134 directly operated apparel and accessory concessions.
During fiscal 2025, we opened seven new stores and closed 19 stores, including stores transferred to and from our partners and other store relocations and remodels. We ended the year with 91 directly operated stores in Asia and the Pacific. This store count does not include 135 directly operated apparel and accessory concessions.
We have developed and maintained this image worldwide through our consistent emphasis on innovative and distinctive product designs and through our award-winning advertising, under the creative leadership and vision of Paul Marciano, our Chief Creative Officer and Director.
The GUESS? brand communicates a distinctive image that is fun, fashionable and sexy. We have developed and maintained this image worldwide through our consistent emphasis on innovative and distinctive product designs and through our award-winning advertising, under the creative leadership and vision of Paul Marciano, our Chief Creative Officer and Director.
The European wholesale businesses operate with two primary selling seasons: the Spring/Summer season, which ships from November to April and the Fall/Winter season, which ships from May to October. We may take advantage of early-season demand and potential reorders in our European wholesale business by offering a pre-collection assortment which ships at the beginning of each season.
Generally, the Spring/Summer season is from April to September, which ships from November to April, and the Fall/Winter season is from November to March, which ships from May to October. We may take advantage of early-season demand and potential reorders in our European wholesale business by offering a pre-collection assortment which ships at the beginning of each season.
During fiscal 2024, we further engaged with the Board of Directors on ESG priorities, risks, and opportunities. We continue to ensure all operations and businesses are conducted ethically, both with internal personnel and external business partners, and all of our directors, officers, and associates are held to our Code of Ethics.
During fiscal 2025, we further engaged with our Board of Directors on ESG priorities, risks, and opportunities. We continue to promote ethical practices in all of our operations and businesses, both with internal personnel and external business partners, and all of our directors, officers, and associates are held to our Code of Ethics.
The information contained within these websites is not incorporated into this Annual Report on Form 10-K.
The information contained within these websites is not incorporated into this Annual Report.
We also support learning beyond our walls through our tuition assistance program. These collective learning and development programs help foster career mobility for our employees, while simultaneously allowing us to fill open positions with existing employees who know our company best.
These collective learning and development programs help foster career mobility for our employees, while simultaneously allowing us to fill open positions with existing employees who know our company best.
As part of our commitment to protect our environment, we aim to ensure that animal-derived material used in our products upholds our commitment to the ethical and humane treatment of animals.
As part of our commitment to protect our environment, we aim for our use of animal-derived material in our products to uphold our commitment to the ethical and humane treatment of animals.
Our directly operated retail stores and concessions were: Year Ended Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Region Stores Concessions Stores Concessions Stores Concessions United States 231 — 240 — 245 — Canada 53 — 62 — 74 — Central and South America 72 29 69 29 69 29 Total Americas 356 29 371 29 388 29 Europe and the Middle East 543 57 560 54 556 50 Asia and the Pacific 103 134 115 129 124 99 Total 1,002 220 1,046 212 1,068 178 • e-Commerce.
Our directly operated retail stores and concessions were: Year Ended Feb 1, 2025 Feb 3, 2024 Jan 28, 2023 Region Stores Concessions Stores Concessions Stores Concessions United States 265 — 231 — 240 — Canada 53 — 53 — 62 — Central and South America 91 32 72 29 69 29 Total Americas 409 32 356 29 371 29 Europe and the Middle East 570 66 543 57 560 54 Asia and the Pacific 91 135 103 134 115 129 Total 1,070 233 1,002 220 1,046 212 • e-Commerce.
Brand loyalty, name awareness, perceived quality, strong brand images, public relations, publicity, promotional events and trademarks all contribute to the reputation and integrity of the GUESS? brand. Global Diversification. The global success of the GUESS? brand has reduced our reliance on any particular geographic region. This geographic diversification provides broad opportunities for long-term growth, even during regional economic slowdowns.
Brand loyalty, name awareness, perceived quality, strong brand images, public relations, publicity, promotional events and trademarks all contribute to the reputation and integrity of the GUESS? brand. Global Diversification. The global success of the GUESS? brand has reduced our reliance on any particular geographic region.
As of February 3, 2024, with an inclusive culture and a commitment to empowering our people, we provide opportunities for approximately 12,000 associates, both full and part-time, consisting of approximately 4,500 in the U.S. and 7,500 internationally.
As of February 1, 2025, with an inclusive culture and a commitment to empowering our people, we provide opportunities for approximately 13,000 associates, both full and part-time, consisting of approximately 4,500 in the United States and 8,500 internationally.
We are also continuing to enhance our product life cycle management and supply chain tracking system and to enhance and align our IT standards globally to accommodate future growth and provide operational efficiencies.
We are also continuing to enhance our product life cycle management and supply chain tracking system. Furthermore, we are aligning and enhancing our IT infrastructure and standards globally to accommodate company expansion and provide operational efficiencies.
With our commitments in adopting water-saving denim technology and managing 12 Table of Contents environmental impacts in our supply chain, over 40% of our denim across all brands within our product portfolios in the Americas and Europe meets our GUESS Eco guidelines and approximately 100% of our key laundries completed the Higg Facility Environmental Module survey.
With our commitments in adopting water-saving denim technology and managing environmental impacts in our supply chain, over 50% of our denim from apparel main line within our product portfolios in the Americas and Europe meets our GUESS ECO guidelines and approximately 100% of our key denim suppliers completed the Higg Facility Environmental Module survey.
The ESG report also provides information about our current and future activities which includes, among others, reducing greenhouse gas (“GHG”) emissions with Science Based Targets, transitioning to more sustainable and recycled materials, and continuing our commitment to circular fashion. The “Our best today, better tomorrow” ESG report is available at http://sustainability.guess.com .
The report provides information about our current and future activities which includes, among others, reducing greenhouse gas (“GHG”) emissions with Science Based Targets, transitioning to more sustainable and recycled materials, and continuing our commitment to circular fashion.
We have deployed omni-channel initiatives in our European markets, including “buy online, ship from store” and “buy in store, deliver by e-commerce.” We currently offer interactive content online and via mobile, and are planning to expand to smartphone applications. European Wholesale Distribution.
We have deployed omni-channel initiatives in our European markets, including “buy online, ship from store,” “buy in store, deliver by e-commerce,” “buy online, return in store” and “buy online, pick up in store.” We currently offer interactive content online and via mobile, including the PWA (Progressive Web App). European Wholesale Distribution.
The Licensing segment includes our worldwide licensing operations. Refer to “Part IV. Financial Statements – Note 17 – Segment Information” in this Form 10-K for disclosures about our segment financial information. Europe Segment In our Europe segment, we sell our products through direct-to-consumer and wholesale channels throughout Europe and the Middle East. European Direct-to-Consumer.
The Licensing segment includes our worldwide licensing operations. Refer to “Note 18 - Segment Information” of the notes to our consolidated financial statements included in this Annual Report for disclosures about our segment financial information. Europe Segment In our Europe segment, we sell our products through direct-to-consumer and wholesale channels throughout Europe and the Middle East. European Direct-to-Consumer.
Although local customs vary in different regions of the world, we believe that the issues of business ethics, human rights, health, safety and environmental stewardship transcend geographical boundaries. Initial assessments of compliance allow us to engage and educate new suppliers on our standards and create the groundwork for strong relationships based on continuous improvement.
Although local customs vary in different regions of the world, we believe that the issues of business ethics, human rights, health, safety and environmental stewardship transcend geographical boundaries. Initial compliance assessments serve as a foundation for engaging and educating new suppliers about our standards, laying the groundwork for strong, collaborative relationships with a goal of continuous improvement.
As of February 3, 2024, we directly operated 1,002 1 Table of Contents retail stores in the Americas, Europe and Asia. Our partners operated 551 additional retail stores worldwide. As of February 3, 2024, we and our partners operated in approximately 100 countries worldwide.
As of February 1, 2025, we directly operated 1,070 retail stores in the Americas, Europe and Asia, including rag & bone retail stores in the Americas and Europe. Our partners operated 527 additional retail stores worldwide. As of February 1, 2025, we and our partners operated in approximately 100 countries worldwide.
During fiscal 2024, our partners opened 18 new licensed retail stores and closed 25 stores, ending the year with 227 licensed retail stores in Europe and the Middle East.
During fiscal 2025, our partners opened 20 new licensed retail stores and closed 25 stores, ending the year with 213 licensed retail stores in Europe and the Middle East. During fiscal 2025, we also acquired nine stores from our partners in the Middle East.
We are transitioning the operation of our U.S. distribution center, which is currently owner-operated, to a third-party logistics provider during the first half of fiscal 2025. Distribution of our products in Canada is handled primarily from our operated distribution centers in Montreal, Quebec.
We have transitioned to a third-party logistics provider to operate our U.S. distribution center as of the second quarter of fiscal 2025. Distribution of our products in Canada is handled primarily from our operated distribution centers in Montreal, Quebec.
Product Integrity and Testing Protocol During fiscal 2024, we published new protocols covering all our major regions, which provide minimum product integrity and other testing for apparel, footwear, accessories and handbags to help ensure our products continue to meet or exceed our customers’ expectations. Logistics We utilize distribution centers at strategically located sites.
Product Integrity and Testing Protocol During fiscal 2025, we updated our protocols according to the new regulations of California Proposition 65. We are testing and covering all our major regions, which provide minimum product integrity and other testing for apparel, footwear, accessories and handbags to help ensure our products continue to meet or exceed our customers’ expectations.
The percentage of our revenue generated from outside of the U.S. has grown from approximately 32% of our total revenues for the year ended December 31, 2005 to approximately 77% of our total revenues for the year ended February 3, 2024.
The percentage of our revenue generated from outside of the United States has grown from approximately 32% of our total revenues for the year ended December 31, 2005 to approximately 72% of our total revenues, including rag & bone, for the year ended February 1, 2025.
Additionally, in the ACTION GUESS strategy, we committed to connecting ESG priorities with business performance incentive and evaluation metrics. Our Sustainability and ESG Team ensures that environmental and social responsibility is embedded into decision-making processes. In addition, we have implemented a rigorous internal auditing program, covering our sustainability metrics and performance data to ensure complete, accurate, and balanced ESG reporting.
Our Sustainability and ESG Team aims to embed environmental and social responsibility into decision-making processes. In addition, we have implemented a rigorous internal auditing program, covering our sustainability metrics and performance data with the goal of providing complete, accurate, and balanced ESG reporting.
Having multiple store concepts also allows us to target our newer brands and concepts in different markets than our flagship GUESS? store concept. We expect to launch GUESS JEANS as a new store concept in fiscal 2025. Pending Acquisition. On February 16, 2024, we announced a definitive agreement to acquire New York-based fashion brand rag & bone.
Having multiple store concepts also allows us to target our newer brands and concepts in different markets than our flagship GUESS? store concept. rag & bone Acquisition. On April 2, 2024, we and WHP Global completed the previously announced acquisition of New York-based fashion brand rag & bone.
Our recent initiative to launch GUESS JEANS as its own brand is specifically targeted to our Millennial and Generation Z customers, however, these products should appeal to a much wider customer base. In February 2024, we, along with global brand management firm WHP Global, entered into a definitive agreement to acquire rag & bone.
Our recent initiative to launch GUESS JEANS as its own brand is specifically targeted to our Millennial and Generation Z customers; however, these products should appeal to a much wider customer base. In April 2024, we completed the acquisition of the operating assets and liabilities of rag & bone, a lifestyle and apparel fashion brand.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch factors that could harm our results of operations and financial condition include, among other things: (i) political instability, war or acts of terrorism, which disrupt trade with the countries where we operate or in which our contractors, suppliers or customers are located and increase our supply chain costs; (ii) recessions and volatility in domestic and foreign economies; (iii) the economic impact of global health crises; (iv) reduced global demand in our industry resulting in the closing of manufacturing facilities; (v) challenges in managing dispersed foreign operations; (vi) local business practices that do not conform to our legal or ethical guidelines; (vii) adoption of additional or revised quotas, restrictions or regulations relating to imports or exports; (viii) additional or increased customs duties, tariffs, taxes and other charges on imports or exports; (ix) anti-American sentiment in foreign countries where we operate resulting from actual or proposed changes to U.S. immigration and travel policies or other factors; (x) delays in receipts due to our distribution centers as a result of labor unrest, increasing security requirements or other factors at U.S. or other ports; (xi) fluctuations in the value of the dollar against foreign currencies; (xii) increased difficulty in protecting our intellectual property rights in foreign jurisdictions; (xiii) social, labor, legal or economic instability in the foreign markets in which we do business, which could influence 13 Table of Contents our ability to sell products in, or distribute products from, these international markets; (xiv) restrictions on the transfer of funds between the U.S. and foreign jurisdictions; (xv) our ability and the ability of our international retail store licensees, distributors and joint venture partners to locate and continue to open desirable new retail locations; (xvi) restrictions on the repatriation of funds held internationally and (xvii) natural disasters or public health crises in areas in which our contractors, suppliers, or customers are located.
Biggest changeSuch factors that could harm our results of operations and financial condition include, among other things: (i) fluctuations in the value of the dollar against foreign currencies; (ii) additional or increased customs duties, tariffs, taxes and other charges on imports or exports; (iii) adoption of additional or revised quotas, restrictions or regulations relating to 13 Table of Contents imports or exports; (iv) political instability, war or acts of terrorism, which disrupt trade with the countries where we operate or in which our contractors, suppliers or customers are located and increase our supply chain costs; (v) recessions and volatility in domestic and foreign economies; (vi) reduced global demand in our industry resulting in the closing of manufacturing facilities; (vii) challenges in managing dispersed foreign operations; (viii) local business practices that do not conform to our legal or ethical guidelines; (ix) anti-American sentiment in foreign countries where we operate resulting from actual or proposed changes to U.S. immigration and travel policies or other factors; (x) delays in receipts due to our distribution centers as a result of labor unrest, increasing security requirements or other factors at U.S. or other ports; (xi) increased difficulty in protecting our intellectual property rights in foreign jurisdictions; (xii) social, labor, legal or economic instability in the foreign markets in which we do business, which could influence our ability to sell products in, or distribute products from, these international markets; (xiii) restrictions on the transfer of funds between the U.S. and foreign jurisdictions; (xiv) our ability and the ability of our international retail store licensees, distributors and joint venture partners to locate and continue to open desirable new retail locations; (xv) restrictions on the repatriation of funds held internationally and (xvi) natural disasters or public health crises in areas in which our contractors, suppliers, or customers are located.
Further, our management team’s experience monetizing and managing Guess’ existing intellectual property and expanding Guess’ brands internationally may not translate to the rag & bone business, and we may fail to achieve the expected benefits of the acquisition and partnership, we may experience unanticipated challenges or delays, and the integration or expansion may prove to be more costly than anticipated.
Further, our management team’s experience monetizing and managing Guess’ existing intellectual property and expanding Guess’ brands internationally may not translate to the rag & bone business. We may fail to achieve the expected benefits of the acquisition and partnership, we may experience unanticipated challenges or delays, and the integration or expansion may prove to be more costly than anticipated.
In addition, digital operations are subject to numerous risks, including reliance on third-party computer hardware and software and service providers, data breaches, violations of state, federal or international laws, including those relating to online privacy, credit card fraud, telecommunication failures and electronic break-ins and similar disruptions, and disruption of internet service.
In addition, digital operations are subject to numerous risks, including reliance on third-party computer hardware, software and service providers, data breaches, violations of state, federal or international laws, including those relating to online privacy, credit card fraud, telecommunication failures, electronic break-ins and similar disruptions, and disruption of internet service.
Additionally, actions taken by our employees or individuals that we partner with, such as brand representatives, influencers or our associates, that fail to represent our brand in a manner consistent with our brand image, whether through our social media platforms or their own, could harm our brand reputation and materially impact our business.
Additionally, actions taken by our employees, representatives or individuals that we partner with, such as brand representatives, influencers or our associates, that fail to represent our brand in a manner consistent with our brand image, whether through our social media platforms or their own, could harm our brand reputation and materially impact our business.
This reclassification could be required even if no noteholders convert their 2028 Notes and could materially reduce our reported working capital. We are subject to counterparty risk with respect to the Notes’ hedge transactions. The hedge counterparties are financial institutions, and we are subject to the risk that they might default under the convertible note hedge transactions.
This reclassification could be required even if no noteholders convert their 2028 Notes and could materially reduce our reported working capital. We are subject to counterparty risk with respect to the 2028 Notes’ hedge transactions. The hedge counterparties are financial institutions, and we are subject to the risk that they might default under the convertible note hedge transactions.
Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: (i) increasing our vulnerability to adverse economic and industry conditions; (ii) limiting our ability to obtain additional financing; (iii) requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; (iv) limiting our flexibility to plan for, or react to, changes in our business; (v) diluting the interests of our existing stockholders if we issue shares of our common stock in full or in part upon conversion of the Notes; and (vi) placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: (i) increasing our vulnerability to adverse economic and industry conditions; (ii) limiting our ability to obtain additional financing; (iii) requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; (iv) limiting our flexibility to plan for, or react to, changes in our business; (v) diluting the interests of our existing stockholders if we issue shares of our common stock in full or in part upon conversion of the 2028 Notes; and (vi) placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
These measures include: (i) blocking sanctions prohibiting dealings with various Russian senior government officials, and companies in various sectors important to the Russian economy, including major Russian financial institutions; (ii) expanded sectoral sanctions related to designated Russian entities’ ability to raise capital; (iii) the disconnection of certain Russian and Belarusian banks from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) financial messaging network; (iv) a ban on new investment in Russia; (v) a ban on the provision of certain services in Russia in the areas of accounting, trust formation, management consulting, quantum computing, and in relation to the maritime transport of Russian-origin crude oil and petroleum products; (vi) bans on the import into the United States of certain Russian origin products, including various energy products; (vii) bans on the conduct of business or investment activity in the Russian-controlled Crimea, Donetsk and Luhansk regions of Ukraine; and (viii) restrictions on the export of various products to Russia and Belarus, including certain dual-use industrial and commercial products, and luxury goods.
These measures include: (i) blocking sanctions prohibiting dealings with various Russian senior government officials and companies in various sectors important to the Russian economy, including major Russian financial institutions; (ii) expanded sectoral sanctions related to designated Russian entities’ ability to raise capital; (iii) the disconnection of certain Russian and Belarusian banks from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) financial messaging network; (iv) a ban on new investment in Russia; (v) a ban on the provision of certain services in Russia in the areas of accounting, trust formation, management consulting, quantum computing, petroleum and in relation to the maritime transport of Russian-origin crude oil and petroleum products; (vi) bans on the import into the United States of certain Russian origin products, including various energy products; (vii) bans on the conduct of business or investment activity in the Russian-controlled Crimea, Donetsk, Kherson, Luhansk and Zaporizhzhia regions of Ukraine; and (viii) restrictions on the export of various products to Russia and Belarus, including certain dual-use industrial and commercial products and luxury goods.
While we also intend to settle the principal amount of the 2028 Notes in cash and any excess in shares, if one or more noteholders elect to convert the 2028 Notes prior to the maturity date, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock, we would be required to settle all or a portion of the conversion obligation through the payment of cash earlier than the maturity date of the 2028 Notes, which could adversely affect our liquidity.
While we intend to settle the principal amount of the 2028 Notes in cash and any excess in shares, if one or more noteholders elect to convert the 2028 Notes prior to the maturity date, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock, we would be required to settle all or a portion of the conversion obligation through the payment of cash earlier than the maturity date of the 2028 Notes, which could adversely affect our liquidity.
In addition, the hedge counterparties or affiliates thereof may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market or privately negotiated transactions prior to the maturity of the Notes (and are likely to do so during any observation period related to a conversion of Notes).
In addition, the hedge counterparties or affiliates thereof may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market or privately negotiated transactions prior to the maturity of the 2028 Notes (and are likely to do so during any observation period related to a conversion of 2028 Notes).
It is our understanding that in connection with establishing their initial hedges of the convertible note hedge and warrant transactions, the hedge counterparties or affiliates thereof entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the respective Notes, and may have unwound these derivative transactions and purchased shares of our common stock in open market transactions shortly following the pricing of the respective Notes.
It is our understanding that in connection with establishing their initial hedges of the convertible note hedge and warrant transactions, the hedge counterparties or affiliates thereof entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the respective 2028 Notes, and may have unwound these derivative transactions and purchased shares of our common stock in open market transactions shortly following the pricing of the respective 2028 Notes.
Additionally, changing privacy laws in the United States, Europe and elsewhere, including the California Consumer Privacy Act, which created an array of consumer privacy rights and business obligations with regard to the collection and sale of personal information, and other similar state laws, and the General Data Protection Regulation (“GDPR”), adopted in the European Union, which created individual privacy rights and imposed increased obligations on companies handling personal data.
Changing privacy laws in the United States, Europe and elsewhere, including the California Consumer Privacy Act, which created an array of consumer privacy rights and business obligations with regard to the collection and sale of personal information, and other similar state laws, and the General Data Protection Regulation (“GDPR”), adopted in the European Union, which created individual privacy rights and imposed increased obligations on companies handling personal data.
In August 2020, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance requiring, among other things, that the “if-converted” method be applied for all convertible instruments (the treasury stock method is no longer available) and removes the ability to rebut the presumption of share settlement for contracts that may be settled in cash or stock.
In August 2020, the Financial Accounting Standards Board issued authoritative guidance requiring, among other things, that the “if-converted” method be applied for all convertible instruments (the treasury stock method is no longer available) and removes the ability to rebut the presumption of share settlement for contracts that may be settled in cash or stock.
For example, heavy snowfall, rainfall or other extreme weather conditions, such as hurricanes or deep freezes, sometimes makes it difficult or less desirable for our staff and customers to travel to our stores. If these disruptions are widespread or extend for long periods, our sales and profitability could be materially adversely affected.
For example, heavy snowfall, rainfall, wildfires or other extreme weather conditions, such as hurricanes or deep freezes, sometimes makes it difficult or less desirable for our staff and customers to travel to our stores. If these disruptions are widespread or extend for long periods, our sales and profitability could be materially adversely affected.
Decisions on whether, when and in what amounts to continue making any future dividend distributions are entirely at the discretion of our Board of Directors, which reserves the right, in its sole discretion, to change or terminate our dividend practices at any time and for any reason without prior notice, including without limitation for any of the following reasons: (i) our cash requirements or plans might change for a wide variety of reasons, including changes in our financial position, capital allocation plans (including a desire to retain or accumulate cash), capital spending plans, stock purchase plans, acquisition strategies, strategic initiatives, debt payment plans (including a desire to maintain or improve credit ratings on our debt securities), debt covenant requirements, pension funding or other benefits payments; (ii) our ability to service and refinance our current and future indebtedness and our ability to borrow or raise additional capital to satisfy our capital needs; (iii) the amount of dividends that we may distribute to our shareholders is subject to restrictions under applicable law and restrictions imposed by our existing or future credit facilities, debt securities, then-outstanding preferred stock securities, if any, leases and other agreements, including restricted payment and leverage covenants; and (iv) the 34 Table of Contents amount of cash that our subsidiaries may make available to us, whether by dividends, loans or other payments, may be subject to the legal, regulatory and contractual restrictions in our outstanding indebtedness.
Decisions on whether, when and in what amounts to continue making any future dividend distributions are entirely at the discretion of our Board of Directors, which reserves the right, in its sole discretion, to change or terminate our dividend practices at any time and for any reason without prior notice, including without limitation for any of the following reasons: (i) our cash requirements or plans might change for a wide variety of reasons, including changes in our financial position, capital allocation plans (including a desire to retain or accumulate cash), capital spending plans, stock purchase plans, acquisition strategies, strategic initiatives, debt payment plans (including a desire to maintain or improve credit ratings on our debt securities), debt covenant requirements, pension funding or other benefits payments; (ii) our ability to service and refinance our current and future indebtedness and our ability to borrow or raise additional capital to satisfy our capital needs; (iii) the amount of dividends that we may distribute to our shareholders is subject to restrictions under applicable law and restrictions imposed by our existing or future credit facilities, debt securities, then-outstanding preferred stock securities, if any, leases and other agreements, including restricted payment and leverage covenants; and (iv) the amount of cash that our subsidiaries may make available to us, whether by dividends, loans or other payments, may be subject to the legal, regulatory and contractual restrictions in our outstanding indebtedness.
We also cannot assure that others will not assert rights in, or ownership of, trademarks and other proprietary rights of GUESS?, our proprietary rights would be upheld if challenged or we would, in that event, not be prevented from using our trademarks, any of which could have a material adverse effect on our financial condition and results of operations.
We also cannot assure you that others will not assert rights in, or ownership of, trademarks and other proprietary rights of GUESS?, our proprietary rights would be upheld if challenged or we would, in that event, not be prevented from using our trademarks, any of which could have a material adverse effect on our financial condition and results of operations.
We can provide no assurances as to the financial stability or viability of the hedge counterparties. Conversion of the Notes or exercise of the warrants evidenced by the warrant transactions may dilute the ownership interest of existing stockholders. At our election, we may settle Notes tendered for conversion entirely or partly in shares of our common stock.
We can provide no assurances as to the financial stability or viability of the hedge counterparties. Conversion of the 2028 Notes or exercise of the warrants evidenced by the warrant transactions may dilute the ownership interest of existing stockholders. At our election, we may settle the 2028 Notes tendered for conversion entirely or partly in shares of our common stock.
For these reasons, we may not have access to any assets or cash flows of our subsidiaries to make payments on our outstanding indebtedness. Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of the Notes and the liquidity of the market for our common stock.
For these reasons, we may not have access to any assets or cash flows of our subsidiaries to make payments on our outstanding indebtedness. Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of the 2028 Notes and the liquidity of the market for our common stock.
Noteholders may seek to employ a convertible note arbitrage strategy with respect to the Notes. Under this strategy, investors typically short sell a certain number of shares of our common stock and adjust their short position over time while they continue to hold the Notes.
Noteholders may seek to employ a convertible note arbitrage strategy with respect to the 2028 Notes. Under this strategy, investors typically short sell a certain number of shares of our common stock and adjust their short position over time while they continue to hold the 2028 Notes.
If we issue additional shares of our common stock or rights to acquire shares of our common stock, if any of our existing stockholders sells a substantial amount of our common stock, or if the market perceives that such issuances or sales may occur, then the trading price of our common stock and the Notes may significantly decrease.
If we issue additional shares of our common stock or rights to acquire shares of our common stock, if any of our existing stockholders sells a substantial amount of our common stock, or if the market perceives that such issuances or sales may occur, then the trading price of our common stock and the 2028 Notes may significantly decrease.
In addition, we have reserved a substantial number of shares of our common stock for issuance upon the exercise of stock options, upon the vesting of restricted stock and restricted stock units pursuant to our employee benefit plans, upon conversion of the Notes and upon the exercise and settlement or termination of the warrant transactions.
In addition, we have reserved a substantial number of shares of our common stock for issuance upon the exercise of stock options, upon the vesting of restricted stock and restricted stock units pursuant to our employee benefit plans, upon conversion of the 2028 Notes and upon the exercise and settlement or termination of the warrant transactions.
The convertible note hedge transactions are expected generally to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be.
The convertible note hedge transactions are expected generally to reduce the potential dilution upon conversion of the 2028 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2028 Notes, as the case may be.
In certain cases, including in the case of our joint venture with WHP, joint ventures and strategic partnership investments may present us with a lack of ability to fully control all aspects of their operations, including due to veto rights.
In certain cases, including in the case of our joint venture with WHP Global, joint ventures and strategic partnership investments may present us with a lack of ability to fully control all aspects of their operations, including due to veto rights.
Furthermore, the warrants evidenced by the warrant transactions are expected to be settled on a net-share basis. As a result, the conversion of some or all of the Notes or the exercise of some or all of such warrants may dilute the ownership interests of existing stockholders.
Furthermore, the warrants evidenced by the warrant transactions are expected to be settled on a net-share basis. As a result, the conversion of some or all of the 2028 Notes or the exercise of some or all of such warrants may dilute the ownership interests of existing stockholders.
Financial and operational impacts that we experienced in connection with the COVID-19 pandemic, and may experience as a result of future COVID-19 outbreaks or other public health crises, include: • temporary closures of our stores or office buildings or the facilities of our wholesale customers or suppliers; • constraints on our suppliers’ ability to source raw materials and to timely produce and fulfill finished goods orders due to factory closures; • lower traffic at open stores, especially during periods of surges or outbreaks in regions where our stores are located; • disruptions due to concentrated regional outbreaks of disease, particularly in Asia, which is the source of most of our goods; • labor shortages; • disruptions in our supply chain and shipments; • negative impacts to pricing of certain product components; • volatility in the economies or financial markets in which we operate; and • decrease in consumer demand, which may require us to obtain access to additional credit.
Financial and operational impacts that we experienced in connection with the COVID-19 pandemic, and may experience as a result of future outbreaks or other public health crises, include: • temporary closures of our stores or office buildings or the facilities of our wholesale customers or suppliers; • constraints on our suppliers’ ability to source raw materials and to timely produce and fulfill finished goods orders due to factory closures; 21 Table of Contents • lower traffic at open stores, especially during periods of surges or outbreaks in regions where our stores are located; • disruptions due to concentrated regional outbreaks of disease, particularly in Asia, which is the source of most of our goods; • labor shortages; • disruptions in our supply chain and shipments; • negative impacts to pricing of certain product components; • volatility in the economies or financial markets in which we operate; and • decrease in consumer demand, which may require us to obtain access to additional credit.
Any governmental or regulatory action that restricts investors’ ability to effect short sales of our common stock or enter into equity swaps on our common stock could depress the trading price of, and the liquidity of the market for, the Notes.
Any governmental or regulatory action that restricts investors’ ability to effect short sales of our common stock or enter into equity swaps on our common stock could depress the trading price of, and the liquidity of the market for, the 2028 Notes.
Although we hedge certain exposures to changes in foreign currency exchange rates, we cannot assure that foreign currency fluctuations will not have a material adverse effect on our financial condition or results of operations.
Although we hedge certain exposures to changes in foreign currency exchange rates, we cannot assure you that foreign currency fluctuations will not have a material adverse effect on our financial condition or results of operations.
We may fail to realize the benefits expected from our acquisition of rag & bone, and we may not be successful in our strategic partnership with WHP, which could adversely affect our business and stock price.
We may fail to realize the benefits expected from our acquisition of rag & bone, and we may not be successful in our strategic partnership with WHP Global, which could adversely affect our business and stock price.
We have invested, and expect to continue to invest, a substantial amount of time, resources and efforts in connection with our joint venture with WHP, which may divert resources away from our other initiatives and operations.
We have invested, and expect to continue to invest, a substantial amount of time, resources and efforts in connection with our joint venture with WHP Global, which may divert resources away from our other initiatives and operations.
This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the Notes. The issuance or sale of shares of our common stock, or rights to acquire shares of our common stock, could depress the trading price of our common stock and the Notes.
This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the 2028 Notes. The issuance or sale of shares of our common stock, or rights to acquire shares of our common stock, could depress the trading price of our common stock and the 2028 Notes.
Further, our international presence means we are subject to certain U.S. laws, including the Foreign Corrupt Practices Act, as well as the laws of the foreign countries in which we operate, including data privacy laws.
Further, our international presence means we are subject to certain U.S. laws, including the Foreign Corrupt Practices Act (“FCPA”), as well as the laws of the foreign countries in which we operate, including data privacy laws.
However, we cannot assure that we can prevent imitation of our products by others or prevent others from seeking to block sales of GUESS? products for purported violations of their trademarks and proprietary rights.
However, we cannot assure you that we can prevent imitation of our products by others or prevent others from seeking to block sales of GUESS? products for purported violations of their trademarks and proprietary rights.
The scope of the impact of sanctions, export controls and the ongoing war in Ukraine is impossible to predict at this time, and could have an adverse impact on our business.
The scope of the impact of economic sanctions, export controls and the ongoing war in Ukraine is impossible to predict at this time and could have an adverse impact on our business.
The raw materials used to manufacture our merchandise are subject to availability constraints and price volatility caused by high demand for fabrics, currency fluctuations, crop yields, weather patterns, climate change, supply conditions and supply chain disruptions, government regulations (including tariffs), labor conditions, energy costs, transportation or freight costs, economic climate, public health crises, market speculation and other unpredictable factors.
The raw materials used to manufacture our merchandise are subject to availability constraints and price volatility caused by high demand for fabrics, currency fluctuations, crop yields, weather patterns, climate change, supply conditions and supply chain disruptions, government regulations (including tariffs), labor conditions, including port strikes, energy costs, transportation or freight costs, economic climate, public health crises, market speculation and other unpredictable factors.
Any sales in the public market of the common stock issuable upon such conversion of the Notes or such exercise of the warrants could adversely affect prevailing market prices of our common stock and, in turn, the price of the Notes.
Any sales in the public market of the common stock issuable upon such conversion of the 2028 Notes or such exercise of the warrants could adversely affect prevailing market prices of our common stock and, in turn, the price of the 2028 Notes.
In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could depress the price of our common stock. Our repurchases of shares of our common stock may affect the value of the Notes and our common stock.
In addition, the existence of the 2028 Notes may encourage short selling by market participants because the conversion of the 2028 Notes could depress the price of our common stock. Our repurchases of shares of our common stock may affect the value of the 2028 Notes and our common stock.
Our business may also be affected by existing or future sanctions and export controls targeting Russia and other responses to Russia's invasion of Ukraine.
Our business may also be affected by existing or future economic sanctions and export controls targeting Russia and other responses to Russia's invasion of Ukraine.
Accordingly, our brand image and profitability are heavily dependent upon the priority our customers place on fashion and our ability to anticipate, identify and capitalize upon emerging fashion trends.
Accordingly, our brand image and profitability are heavily dependent upon the priority that our customers place on fashion and our ability to anticipate, identify and capitalize upon emerging fashion trends.
The cost of the materials that are used in our manufacturing process, such as oil-related commodity prices and other raw materials, including cotton, dyes and chemicals, and other costs, such as fuel, energy and utility costs, can fluctuate as a result of inflation, supply chain disruptions, including due to the ongoing war in Ukraine and Gaza, the Red Sea crisis, and other factors.
The cost of the materials that are used in our manufacturing process, such as oil-related commodity prices and other raw materials, including cotton, dyes and chemicals, and other costs, such as fuel, energy and utility costs, can fluctuate as a result of inflation, supply chain disruptions, including due to the ongoing wars in Ukraine and Gaza, the Red Sea crisis, and other factors.
These joint ventures and investments involve risks that our joint venture or strategic investment partners may: • have economic or business interests or goals that are inconsistent with or adverse to ours, such as the licensing of intellectual property to other parties, the pricing of products or the offering of competitive products; • take actions contrary to our requests or contrary to our policies or objectives, including actions that may violate applicable law; • be unable or unwilling to fulfill their obligations to us, including under the relevant joint venture agreements; 18 Table of Contents • have financial or business difficulties; • take actions that may harm our reputation; or • have disputes with us as to the scope of their rights, responsibilities and obligations.
These joint ventures and investments involve risks that our joint venture or strategic investment partners may: • have economic or business interests or goals that are inconsistent with or adverse to ours, such as the licensing of intellectual property to other parties, the pricing of products or the offering of competitive products; • take actions contrary to our requests or contrary to our policies or objectives, including actions that may violate applicable law; • be unable or unwilling to fulfill their obligations to us, including under the relevant joint venture agreements; • have financial or business difficulties; • take actions that may harm our reputation; or • have disputes with us as to the scope of their rights, responsibilities and obligations.
These activities could have increased (or reduced the size of any decrease in) the market price of our common stock or the Notes at that time.
These activities could have increased (or reduced the size of any decrease in) the market price of our common stock or the 2028 Notes at that time.
In the long-term, we anticipate these international revenues will continue to grow as a percentage of our total business. The current political landscape has introduced greater uncertainty with respect to future income tax and trade regulations for U.S. companies with significant business and sourcing operations outside the U.S.
In the long-term, we anticipate these international revenues will continue to grow as a percentage of our total business. The current political landscape has introduced greater uncertainty with respect to future income tax and trade regulations for U.S. companies with significant business and sourcing operations outside the United States.
As there are a finite number of skilled manufacturers that meet our requirements, it could take significant time to identify and qualify suitable alternatives, which could result in our missing retailing seasons or our wholesale customers canceling orders, refusing to accept deliveries or requiring we lower selling prices.
As there are a finite number of skilled manufacturers that meet our requirements, it could take significant time to identify and qualify suitable alternatives, which could result in our missing retailing seasons or our wholesale customers canceling orders, refusing to accept deliveries or requiring us to lower selling prices.
Our inability to satisfy our obligations under the Notes could affect the terms of other financial obligations, harm our reputation and affect the trading price of our common stock.
Our inability to satisfy our obligations under the 2028 Notes could affect the terms of other financial obligations, harm our reputation and affect the trading price of our common stock.
We cannot predict the size of future issuances or the effect they may have on the trading price of our common stock and the Notes.
We cannot predict the size of future issuances or the effect they may have on the trading price of our common stock and the 2028 Notes.
It is possible, however, that future events resulting in damage or interruption to our systems could materially adversely impact our business, financial condition or results of operations. Risks Related to Competition The apparel industry is highly competitive, and we may face difficulties competing successfully in the future.
It is possible, however, that future events resulting in damage or interruption to our systems could materially adversely impact our business, financial condition or results of operations. Risks Related to Competition The retail industry is highly competitive, and we may face difficulties competing successfully in the future.
In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness, including our current credit facilities and other agreements we may enter into in the future, may restrict our ability to make payments on each series of Notes other than scheduled principal and interest, and as a result, upon a fundamental change we may not be able to repurchase any or all of the Notes and upon any conversions of the applicable series of Notes may be unable to pay the cash amounts, if any, then due.
In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness, including our current credit facilities and other agreements we may enter into in the future, may restrict our ability to make payments on the 2028 Notes other than scheduled principal and interest, and as a result, upon a fundamental change we may not be able to repurchase any or all of the 2028 Notes and upon any conversions of the 2028 Notes may be unable to pay the cash amounts, if any, then due.
Our success and competitive position depend significantly upon our trademarks and other proprietary rights. We take steps to establish and protect our trademarks worldwide. Any precautions we may take to protect our intellectual property, policing unauthorized use of our intellectual property is difficult, expensive and time consuming.
Our success and competitive position depend significantly upon our trademarks and other proprietary rights. We take steps to establish and protect our trademarks worldwide. Any precautions we may take to protect our intellectual property, such as policing unauthorized use of our intellectual property is difficult, expensive and time consuming.
The conversion features of the Notes, if triggered, may adversely affect our financial condition and results of operations.
The conversion features of the 2028 Notes, if triggered, may adversely affect our financial condition and results of operations.
In addition, even if noteholders do not elect to convert their 2028 Notes, if the conditional conversion features of the 2028 Notes are satisfied, we could be required under 29 Table of Contents applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2028 Notes as a current liability, which would result in a material reduction of our net working capital.
In addition, even if noteholders do not elect to convert their 2028 Notes, if the conditional conversion features of the 2028 Notes are satisfied, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2028 Notes as a current liability, which would result in a material reduction of our net working capital.
This could have a material adverse effect on our results of operations and financial condition, including but not limited to future impairments of store assets or goodwill. Our net revenue and operating results have historically been lower in the first half of our fiscal year due to general seasonal trends in the apparel and retail industries.
This could have a material adverse effect on our results of operations and financial condition, including but not limited to future impairments of store assets or goodwill. 35 Table of Contents Our net revenue and operating results have historically been lower in the first half of our fiscal year due to general seasonal trends in the apparel and retail industries.
If the U.S. dollar strengthens relative to the respective fiscal 2024 foreign exchange rates, foreign exchange could negatively impact our revenues and operating results, as well as our international cash and other balance sheet items during fiscal 2025, particularly in Europe (primarily the euro, British pound, Turkish lira and Russian rouble), Canada and Mexico.
If the U.S. dollar strengthens relative to the respective fiscal 2025 foreign exchange rates, foreign exchange could negatively impact our revenues and operating results, as well as our international cash and other balance sheet items during fiscal 2026, particularly in Europe (primarily with the euro, British pound, Turkish lira and Russian rouble), Canada and Mexico.
The accounting method for the Notes could adversely affect our reported financial condition and results. The accounting method for reflecting the shares of our common stock underlying the Notes in our reported diluted earnings per share and reflecting the 2028 Notes on our balance sheet may adversely affect our reported earnings and financial condition.
The accounting method for the 2028 Notes could adversely affect our reported financial condition and results. The accounting method for reflecting the shares of our common stock underlying the 2028 Notes in our reported diluted earnings per share and reflecting the 2028 Notes on our balance sheets may adversely affect our reported earnings and financial condition.
Failure by us or our third-party providers to comply with ethical, social, product, labor, health and safety or environmental standards could also jeopardize our reputation and potentially lead to adverse consumer actions, including boycotts. They could also impact investment decisions by investors, including some large institutional investors and funds, which could negatively impact our stock price.
Failure by us or our third-party providers to comply with ethical, social, product, labor, health and safety or environmental standards could also jeopardize our reputation and potentially lead to adverse consumer actions, including boycotts. Such failures could also impact investment decisions by investors, including some large institutional investors and funds, which could negatively impact our stock price.
Our corporate headquarters, as well as other key operational locations, including retail, distribution and warehousing facilities, are in areas subject to natural events such as severe weather and geological events or public health crises that could disrupt our operations. Many of our suppliers and customers also have operations in these 14 Table of Contents locations.
Our corporate headquarters, as well as other key operational locations, including retail, distribution and warehousing facilities, are in areas subject to natural events such as severe weather and geological events or public health crises that could disrupt our operations. Many of our suppliers and customers also have operations in these locations.
These efforts may not result in additional products, efficiencies or revenues for our Company, which could adversely affect our business, operating results and financial condition. If we do not successfully manage the challenges associated with the acquisition and partnership, we may not achieve the anticipated benefits of either or both of the acquisition or partnership.
These efforts may not result in additional products, efficiencies or revenues for our Company, which could adversely affect our business, operating results and financial condition. 18 Table of Contents If we do not successfully manage the challenges associated with the acquisition and partnership, we may not achieve the anticipated benefits of either or both of the acquisition or partnership.
Any of these factors could result in reductions in sales or prices and could have a material adverse effect on our results of operations and financial condition. 24 Table of Contents Our Americas Wholesale business is highly concentrated. If any large customer decreases its purchases or experiences financial difficulties, our results of operations and financial condition could be adversely affected.
Any of these factors could result in reductions in sales or prices and could have a material adverse effect on our results of operations and financial condition. Our Americas Wholesale business is highly concentrated. If any large customer decreases its purchases or experiences financial difficulties, our results of operations and financial condition could be adversely affected.
Our business is also susceptible to unseasonable weather conditions, including conditions resulting from climate change. For example, extended periods of unseasonably warm or prolonged periods of unseasonably cold temperatures during the winter season or cool weather during the summer season could render a portion of our inventory incompatible with those unseasonable conditions.
Our business is also susceptible to unseasonable weather conditions, including conditions resulting from climate 14 Table of Contents change. For example, extended periods of unseasonably warm or prolonged periods of unseasonably cold temperatures during the winter season or cool weather during the summer season could render a portion of our inventory incompatible with those unseasonable conditions.
While we retain significant control over our licensees’ products and advertising, we rely on our licensees for, among other things, operational and financial control over their businesses. If the quality, focus, image or distribution of our licensed products diminish, consumer acceptance of and demand for our brands and products could decline.
While we retain significant control over our licensees’ products and advertising, we rely on our licensees for, among other things, operational and financial control over their businesses. If the quality, focus, image or distribution of our 23 Table of Contents licensed products diminish, consumer acceptance of and demand for our brands and products could decline.
Their stock ownership, together with the anti-takeover effects of certain provisions of applicable Delaware law and our Restated Certificate of Incorporation and Bylaws, may discourage acquisition bids or allow the Marcianos to delay or prevent a change in control that may be favored by our other stockholders, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our common stock price.
Their stock ownership, together with the anti-takeover effects of certain provisions of applicable Delaware law and our Restated Certificate of Incorporation and Bylaws, may discourage acquisition bids or allow the Proposed Rollover Shareholders to delay or prevent a change in control that may be favored by our other stockholders, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our common stock price.
As previously noted, we have recently experienced, and expect to continue to experience, significant inflation in labor, materials and shipping costs. The increase of online shopping driven by changes in consumer shopping preferences has amplified certain of these risks resulting in capacity constraints.
As 29 Table of Contents previously noted, we have recently experienced, and expect to continue to experience, significant inflation in labor, materials and shipping costs. The increase of online shopping driven by changes in consumer shopping preferences has amplified certain of these risks resulting in capacity constraints.
In such cases, and in other cases, our obligations under the Notes and the Indentures could increase the cost of acquiring us or otherwise discourage a third-party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.
In such cases, and in other cases, our obligations under the 2028 Notes and the 2028 Indenture could increase the cost of acquiring us or otherwise discourage a third-party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.
In particular, the income tax benefits associated with our transfer of intellectual property to our wholly-owned Swiss subsidiary during the quarter ended October 30, 2021 are sensitive to future profitability and taxable income in Switzerland, audit assessments and changes in applicable tax law.
In particular, the income tax benefits associated with our transfer of intellectual property to our wholly-owned Swiss subsidiary during the quarter ended October 30, 2021 are sensitive to future profitability and taxable income in Switzerland, audit assessments 16 Table of Contents and changes in applicable tax law.
The introduction and growth or maintenance of new store design concepts as part of our growth and productivity strategies could strain our financial and management resources and is subject to a number of other risks, including customer acceptance, product differentiation, competition and maintaining desirable locations. These risks may be compounded during difficult economic climates or future economic downturn.
In addition, the introduction and growth or maintenance of new store design concepts as part of our growth and productivity strategies could strain our financial and management resources and are subject to a number of other risks, including customer acceptance, product differentiation, competition and maintaining desirable locations. These risks may be compounded during difficult economic climates or future economic downturn.
These factors include, but are not limited to, the duration and spread of any outbreak, its severity, the actions to contain or address the impact of the outbreak, the timing, distribution, and efficacy of vaccines and other treatments, United States and foreign government actions to respond to possible reductions in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume.
These factors include, but are not limited to, the duration and spread of any outbreak, its severity, the actions to contain or address the impact of the outbreak, the timing, distribution, and efficacy of vaccines and other treatments, U.S. and foreign government actions to respond to possible reductions in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume.
Such disruptions could result in store closures, decreased demand for our products and disruptions in our management functions, sales channels and manufacturing and distribution networks, which could have a material adverse effect on our business, financial condition and results of operations.
Such disruptions have resulted in and could in the future result in store closures, decreased demand for our products and disruptions in our management functions, sales channels and manufacturing and distribution networks, which could have a material adverse effect on our business, financial condition and results of operations.
For example, a number of European countries experienced difficult economic conditions, including sovereign debt issues that negatively impacted the capital markets. These conditions resulted in reduced consumer confidence and spending in many countries in Europe, particularly Southern Europe.
For example, a number of European countries experienced difficult economic conditions, including sovereign debt issues that negatively impacted the capital markets. These conditions resulted in reduced consumer confidence and spending in many countries in Europe, particularly 20 Table of Contents Southern Europe.
We may be unable to adequately protect our intellectual property or to determine the extent of any unauthorized use, particularly in those foreign countries where the laws do not protect proprietary rights as fully as in the U.S. We also place significant value on our trade dress and the overall appearance and image of our products.
We may be unable to adequately protect our intellectual property or to determine the extent of any unauthorized use, particularly in those foreign countries where the laws do not protect proprietary rights as fully as in the United States. We also place significant value on our trade dress and the overall appearance and image of our products.
Holders of our 2024 Notes and 2028 Notes may require us to repurchase their Notes following a fundamental change, at a cash repurchase price generally equal to the principal amount of the applicable series of Notes to be repurchased, plus accrued and unpaid interest, if any.
Holders of our 2028 Notes may require us to repurchase their 2028 Notes following a fundamental change, at a cash repurchase price generally equal to the principal amount of the 2028 Notes to be repurchased, plus accrued and unpaid interest, if any.
For example, sanctions imposed in response to Russia’s invasion of Ukraine, and subsequent downgradings by Fitch and Moody’s of Russia’s sovereign debt to “junk” status, have resulted in record lows of the Russian rouble against the U.S. dollar.
For example, economic sanctions imposed in response to Russia’s invasion of Ukraine, and subsequent downgrades by Fitch and Moody’s of Russia’s sovereign debt to “junk” status, have resulted in record lows of the Russian rouble against the U.S. dollar.
Although we will have a 50% ownership interest in the joint venture that owns rag & bone’s intellectual property, WHP will have a controlling voting interest in the joint venture and will therefore have ultimate control over rag & bone’s intellectual property, subject to our license agreement with the joint venture.
Although we have a 50% ownership interest in the joint venture that owns rag & bone’s intellectual property, WHP Global has a controlling voting interest in the joint venture and therefore has ultimate control over rag & bone’s intellectual property, subject to our license agreement with the joint venture.
A violation of law by any of our licensees or suppliers, or divergence of a licensee’s or supplier’s business practices or social responsibility standards from ours or those generally accepted as ethical in the U.S., could disrupt the shipment of our products, harm the value of our trademarks, damage our reputation or expose us to potential liability.
A violation of law by any of our licensees or suppliers, or divergence of a licensee’s or supplier’s business practices or social responsibility standards from ours or those generally accepted as ethical in the United States could disrupt the shipment of our products, harm the value of our trademarks, damage our reputation or expose us to potential liability.
In particular, activist investors may suggest changes to our operations, including management, that conflict with our strategic direction and could cause uncertainty amongst employees, customers and our investors about the strategic direction of our business. • Responding to proxy contests or other actions, including Legion Partners’ “vote no” campaign in connection with our 2022 annual meeting of shareholders, are costly and time-consuming, and could disrupt our operations and divert the attention of our Board of Directors, senior management and employees away from their regular duties and the pursuit of business strategies.
In particular, activist investors may suggest changes to our operations, including management, that conflict with our strategic direction and could cause uncertainty amongst employees, customers and our investors about the strategic direction of our business. • Responding to proxy contests or other actions, such as Legion Partners Holdings, LLC’s (“Legion Partners”) “vote no” campaign in connection with our 2022 annual meeting of shareholders, are costly and time-consuming, and could disrupt our operations and divert the attention of our Board of Directors, senior management and employees away from their regular duties and the pursuit of business strategies.
In addition, purchases from our top two licensees in fiscal 2024 accounted for almost 43% of our total inventory purchases. Although we believe we could replace existing licensees if necessary, we may have a negative impact during the transition period. Our inability to replace existing licensees could adversely affect our revenues and results of operations.
In addition, purchases from our top two licensees in fiscal 2025 accounted for almost 29% of our total inventory purchases. Although we believe we could replace existing licensees if necessary, we may have a negative impact during the transition period. Our inability to replace existing licensees could adversely affect our revenues and results of operations.
We do not have long-term contracts with any suppliers or manufacturers, and our business is dependent on our partnerships with our vendors. If manufacturing costs rise significantly, our product margins and results of operations could be negatively affected. In addition, few of our vendors manufacture our products exclusively.
We do not have long-term contracts with any suppliers or manufacturers, and our business is dependent on our partnerships with our vendors. If manufacturing costs rise significantly, or if we need to replace one of our vendors, our product margins and results of operations could be negatively affected. In addition, few of our vendors manufacture our products exclusively.
If we are unsuccessful in continuing to shorten lead-times or if we fail to anticipate fashion trends or consumer demand, we could have excess inventories. Additionally, our vendors could fail to timely supply the quality products and materials we require. Moreover, we could fail to effectively market or merchandise products 27 Table of Contents once we receive them.
If we are unsuccessful in continuing to shorten lead-times or if we fail to anticipate fashion trends or consumer demand, we could have excess inventories. Additionally, our vendors could fail to timely supply the quality products and materials we require. Moreover, we could fail to effectively market or merchandise products once we receive them.
This could materially and adversely affect our business and results of operations. In fiscal 2024, approximately 81% of our net royalties were derived from our top five licensed product lines. A decrease in customer demand for any of these product lines could have a material adverse effect on our results of operations and financial condition.
This could materially and adversely affect our business and results of operations. In fiscal 2025, approximately 85% of our net royalties were derived from our top five licensed product lines. A decrease in customer demand for any of these product lines could have a material adverse effect on our results of operations and financial condition.
We (or third parties we rely on) may not be able to fully, continuously, and effectively implement cybersecurity controls as intended. We utilize a risk-based approach to determine which security controls to implement and it is 23 Table of Contents possible that we may not implement appropriate controls if we do not recognize, or we underestimate, a particular cybersecurity risk.
We (or third parties we rely on) may not be able to fully, continuously and effectively implement cybersecurity controls as intended. We utilize a risk-based approach to determine which security controls to implement and it is possible that we may not implement appropriate controls if we do not recognize, or we underestimate, a particular cybersecurity risk.
Changes in income tax laws, significant shifts in the relative source of our earnings, or other unanticipated income tax liabilities could adversely affect our effective income tax rate and profitability and may result in volatility in our financial results. We are subject to income taxes in the U.S. and numerous foreign jurisdictions.
Changes in income tax laws, significant shifts in the relative source of our earnings, or other unanticipated income tax liabilities could adversely affect our effective income tax rate and profitability and may result in volatility in our financial results. We are subject to income taxes in the United States and numerous foreign jurisdictions.
In addition, sudden decreases in the costs for materials may result in the cost of inventory exceeding the cost of new production, which could result in lower profitability, particularly if these decreases result in downward price pressure. Furthermore, any price increases to mitigate inflationary pressures may lower consumer demand for our products.
In addition, sudden decreases in the costs for materials may result in the cost of inventory exceeding the cost of new production, which could result in lower profitability, particularly if these decreases result in downward price pressure. Furthermore, any price increases to mitigate inflationary pressures has in the past and could in the future lower consumer demand for our products.
We cannot ensure we will continue periodic dividends on our common stock at the current rates, or the payment of any dividends at all. Changes in the amount of, and market perceptions and expectations with respect to, our periodic dividend distributions, may materially affect the price of our common stock and the Notes (as defined below).
We cannot ensure we will continue periodic dividends on our common stock at the current rates, or the payment of any dividends at all. Changes in the amount of, and market perceptions and expectations with respect to, our periodic dividend distributions, may materially affect the price of our common stock and the 2028 Notes.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. Cybersecurity. Risk Management and Strategy We have developed an information security program that is designed to address material risks from cybersecurity threats and our cybersecurity risk management processes are integrated into our overall risk management program. The program includes policies and procedures that identify how security measures and controls are developed, implemented, and maintained.
Biggest changeITEM 1C. Cybersecurity. Risk Management and Strategy We have developed and integrated into our overall risk management program an information security program that is designed to address material risks from cybersecurity threats. Our program includes policies and procedures that identify how security measures and controls are developed, implemented and maintained.
We also conduct periodic trainings and tabletop exercises to enhance incident response preparedness. We are a member of an industry cybersecurity intelligence and risk sharing organization. Employees undergo initial cyber security awareness training when hired and maintenance cyber security awareness training annually.
We also conduct periodic trainings and tabletop exercises to enhance incident response preparedness. We are a member of an industry cybersecurity intelligence and risk sharing organization. Employees undergo initial cyber security awareness training when hired and maintenance cybersecurity awareness training annually.
Governance The Chief Information Security Officer (CISO) is the management position with primary responsibility for the development, operation, and maintenance of our information security program. The Company’s CISO has cybersecurity experience that includes being a lead auditor for ISO/IEC 27001 with knowledge of both operations and governance.
Governance The Chief Information Security Officer (“CISO”) is the management position with primary responsibility for the development, operation, and maintenance of our information security program, which includes cybersecurity. Our CISO has cybersecurity experience that includes being a lead auditor for ISO/IEC 27001 and ISO 22301 with knowledge of both operations and governance.
Third-party security firms are used in different capacities to 35 Table of Contents provide or operate some of these controls and technology systems, including cloud-based platforms and services. For example, third parties are used to conduct independent assessments, such as vulnerability scans and penetration testing.
Third-party security firms are used in different capacities to provide or operate some of these controls and technology systems, including cloud-based platforms and services. For example, we have used third parties to conduct independent assessments, such as vulnerability scans and penetration testing.
However, we can give no assurance that we have detected or protected against all cybersecurity incidents or cybersecurity threats. Please refer to the risk factors under the heading “Risks Related to Data Privacy and Cybersecurity” in Part I, Item 1A of this Report for additional information about the risks we face associated with cybersecurity threats.
However, we can give no assurance that we have detected or protected against all cybersecurity incidents or cybersecurity threats. Please refer to “—Risks Related to Data Privacy and Cybersecurity” in “Item 1A. Risk Factors” of this Annual Report for additional information about the risks we face associated with cybersecurity threats.
The Cybersecurity Steering Committee reviews the annual risk assessment and provides comments on the overall information security program. Oversight of the information security program at the Board level sits with the Audit Committee. The CISO provides quarterly updates on the information security program to the Audit Committee and more frequently as circumstances require. 36 Table of Contents
The Cybersecurity Steering Committee reviews the annual risk assessment and provides comments on the overall information security program. Oversight of the information security program at the Board level sits with the Audit Committee. The Audit Committee is informed of cybersecurity-related risks through the CISO providing quarterly updates on the information security program and more frequently as circumstances require.
In his previous position as Chief Technology Officer for an international managed security service provider, he worked as Virtual CISO, Incident manager and security auditor for several multinational companies. We have established a Cybersecurity Steering Committee to provide management level oversight of cybersecurity.
He previously served as Chief Technology Officer for an international managed security service provider, during which time he served as Virtual CISO, Incident 38 Table of Contents manager and security auditor for several multinational companies. We have established a Cybersecurity Steering Committee to provide a management-level oversight of cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeCertain information concerning our principal facilities is set forth below: Location Use Approximate Area in Square Feet Lugano (Bioggio)/Stabio, Switzerland Principal executive and administrative offices, global design, sourcing, marketing and licensing facilities, sales offices and showrooms used by our Europe segment and Corporate support group 235,800 Los Angeles, California, United States Executive and administrative offices, supporting design, sourcing and licensing facilities, sales offices and warehouse facilities used by our Americas Wholesale, Americas Retail, and Corporate support group 341,700 Piacenza, Italy Distribution and warehousing facilities used by our Europe segment 592,400 Venlo, Netherlands Distribution and warehousing facilities used by our Europe segment 507,700 Louisville, Kentucky, United States Distribution and warehousing facility used by our Americas Wholesale and Americas Retail segments 506,000 Jasin/Katowice, Poland Distribution and warehousing facilities and administrative offices used by our Europe segment 378,300 Montreal/Toronto/Vancouver, Canada Administrative offices, showrooms and warehouse facilities used by our Americas Wholesale and Americas Retail segments 205,300 Florence, Italy Administrative office used by our Europe segment 105,300 Seoul, South Korea Administrative and sales offices, design facilities and showrooms primarily used by our Korean subsidiary 41,200 Shanghai, China Administrative offices used by our Asia segment 7,700 Our North American corporate, wholesale and retail headquarters and certain warehouse facilities are located in Los Angeles, California, consisting of four buildings totaling approximately 341,700 square feet (the “North American Corporate Headquarters”) and a parking lot adjacent to the North American Corporate Headquarters.
Biggest changeCertain information concerning our principal facilities as of February 1, 2025 is set forth below: Location Use Approximate Area in Square Feet Lugano (Bioggio)/Stabio, Switzerland Principal executive and administrative offices, global design, sourcing, marketing and licensing facilities, sales offices and showrooms used by our Europe segment and Corporate support group 235,800 Los Angeles, California, United States Executive and administrative offices, supporting design, sourcing and licensing facilities, sales offices and warehouse facilities used by our Americas Wholesale, Americas Retail, and Corporate support group 341,700 Piacenza, Italy Distribution and warehousing facilities used by our Europe segment 592,400 Venlo, Netherlands Distribution and warehousing facilities used by our Europe segment 507,700 Louisville, Kentucky, United States Distribution and warehousing facility used by our Americas Wholesale and Americas Retail segments 506,000 Jasin/Katowice, Poland Distribution and warehousing facilities and administrative offices used by our Europe segment 378,300 Montreal/Toronto/Vancouver, Canada Administrative offices, showrooms and warehouse facilities used by our Americas Wholesale and Americas Retail segments 205,300 Florence, Italy Administrative office used by our Europe segment 105,300 Commerce, California, United States Distribution and warehousing facilities used by rag & bone 100,000 Seoul, South Korea Administrative and sales offices, design facilities and showrooms primarily used by our Korean subsidiary 41,200 New York City, New York, United States rag & bone corporate office 31,900 Shanghai, China Administrative offices used by our Asia segment 7,700 Our U.S. distribution center is a fully automated facility based in Louisville, Kentucky.
Additionally, we utilize several third-party operated distribution warehouses that service the Asia region. We lease our showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under non-cancelable operating lease agreements expiring on various dates through January 2039.
Additionally, we utilize several third-party operated distribution warehouses that service the Asia region. In addition to our principal properties, we lease our showrooms, advertising, licensing, sales and merchandising offices, remote distribution and warehousing facilities and retail and factory outlet store locations under non-cancelable operating lease agreements expiring on various dates through August 2044.
ITEM 2. Properties. As of February 3, 2024, all of our principal facilities were leased with the exception of our U.S. distribution center based in Louisville, Kentucky and our administrative office based in Florence, Italy.
ITEM 2. Properties. During fiscal 2025, the Company closed on the sale and leaseback of its U.S. distribution center based in Louisville, Kentucky. As of February 1, 2025, all of our principal facilities were leased with the exception of our administrative office based in Florence, Italy.
We are transitioning the operation of our U.S. distribution center, which is currently owner-operated, to a third-party logistics provider during the first half of fiscal 2025. Distribution of our products in Canada is handled primarily from two leased facilities based in Montreal, Quebec. Distribution of our products in Europe is handled by third-party distributors.
We have transitioned to a third-party logistics provider to operate our U.S. distribution center as of the second quarter of fiscal 2025. Distribution of our products in Canada is handled primarily from two leased facilities based in Montreal, Quebec. Distribution of our products in Europe is handled by third-party distributors.
We believe our existing facilities are well maintained, in good operating condition and are adequate to support our present level of operations.
We believe our existing facilities are well maintained, in good operating condition and are adequate to support our present level of operations. 39 Table of Contents Certain of our properties are owned by entities that are owned by or for the respective benefit of Paul Marciano, our Chief Creative Officer and a member of our Board of Directors, and his brother, Maurice Marciano, who was a member of our Board of Directors until his retirement in September 2023.
Removed
These facilities are leased by us from entities that are owned by or for the benefit of Maurice Marciano and Paul Marciano (the “Principal Stockholders”) pursuant to a lease that expires September 30, 2025, with an additional five-year renewal option to September 30, 2030 at our sole discretion.
Added
Please refer to “Note 15 - Related Party Transactions” of the notes to our consolidated financial statements included in this Annual Report for disclosures about our related party transactions and “Item 9B. Other Information―Recent Transactions” for information on our recent amendment to our North American Corporate Headquarters lease.
Removed
The related lease liability was approximately $35.5 million as of February 3, 2024. In addition, through a wholly-owned Canadian subsidiary, we lease warehouse and administrative facilities in Montreal, Quebec from an entity that is owned by or for the benefit of the Principal Stockholders. During August 2023, we entered into a three-year lease extension through August 2026.
Removed
All other material terms in the previously existing Canada lease (including base rent of approximately CAD$0.6 million ($0.4 million) per year) remain the same. The related lease liability was approximately CAD$1.3 million ($1.0 million) as of February 3, 2024.
Removed
Through a French subsidiary, we lease a showroom and office space located in Paris, France from an entity that is owned in part by an entity that is owned by or for the benefit of the Principal Stockholders.
Removed
During the first quarter of fiscal 2022, we entered into a nine-year lease extension which includes an option for early termination at the end of the third and sixth years.
Removed
The lease has standard terms with a quarterly base charge plus a variable charge aggregating approximately €0.9 million ($1.0 million) per year (with subsequent annual rent adjustments based on a specific price index). All other material terms in the previously existing Paris lease remain the same.
Removed
The related lease liability was approximately €4.4 million ($4.8 million) as of February 3, 2024. 37 Table of Contents Refer to “Part IV. Financial Statements – Note 14 – Related Party Transactions” in this Form 10-K for disclosures about our related party transactions. Our U.S. distribution center is a fully automated facility based in Louisville, Kentucky.
Removed
These facilities had aggregate real estate lease liabilities as of February 3, 2024 totaling approximately $665.3 million, excluding related party liabilities. See “Part IV. Financial Statements – Note 9 – Lease Accounting” in this Form 10-K for further detail.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−3 removed1 unchanged
Biggest changeThe payment of cash dividends in the future will be based upon a number of business, legal and other considerations, including changes in our financial position, capital allocation plans (including a desire to retain or accumulate cash), capital spending plans, stock purchase plans, acquisition strategies, strategic initiatives, debt payment plans (including a desire to maintain or improve credit ratings on our debt securities), debt covenant requirements, pension funding or other benefits payments. 38 Table of Contents Share Repurchase Program Our share repurchases during each fiscal month of the fourth quarter of fiscal 2024 were as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs 3 October 29, 2023 to November 25, 2023 Repurchase program 1 — — — $ 19,748,066 Employee transactions 2 228 $ 21.50 — November 26, 2023 to December 30, 2023 Repurchase program 1 — — — $ 19,748,066 Employee transactions 2 — — — December 31, 2023 to February 3, 2024 Repurchase program 1 915,467 $ 23.05 915,467 $ — Employee transactions 2 113,944 $ 23.04 — Total Repurchase program 1 915,467 $ 23.05 915,467 Employee transactions 2 114,172 $ 23.04 — ______________________________________________________________________ 1 During fiscal 2022, the Board of Directors terminated our previous 2012 $500 million share repurchase program (which had $47.8 million capacity remaining) and authorized a new $200 million share repurchase program.
Biggest changeShare Repurchase Program Our share repurchases during each fiscal month of the fourth quarter of fiscal 2025 were as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs 1 November 3, 2024 to November 30, 2024 Repurchase program 1 — — — $ 139,761,411 Employee transactions 2 — — — December 1, 2024 to January 4, 2025 Repurchase program 1 — — — $ 139,761,411 Employee transactions 2 — — — January 5, 2025 to February 1, 2025 Repurchase program 1 — — — $ 139,761,411 Employee transactions 2 66,008 $ 14.13 — Total Repurchase program 1 — — — Employee transactions 2 66,008 $ 14.13 — ______________________________________________________________________ 40 Table of Contents 1 In March 2024, the Board of Directors authorized a new $200 million share repurchase program.
The return on investment is calculated based on an investment of $100 at market close on February 2, 2019, with dividends, if any, reinvested. Past performance is not necessarily indicative of future performance.
The return on investment is calculated based on an investment of $100 at market close on February 1, 2020, with dividends, if any, reinvested. Past performance is not necessarily indicative of future performance.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market and Shareholder Information Since August 8, 1996, our common stock has been listed on the New York Stock Exchange under the symbol “GES.” On March 25, 2024, there were 280 holders of record of our common stock.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market and Shareholder Information Since August 8, 1996, our common stock has been listed on the New York Stock Exchange under the symbol “GES.” On April 4, 2025, there were 287 holders of record of our common stock.
Financial Statements – Note 23 – Subsequent Events”, which we anticipate will be completed in April 2024. 39 Table of Contents Performance Graph The Stock Price Performance Graph below compares our cumulative stockholder return with that of the S&P 500 Index (a broad equity market index) and the S&P 1500 Apparel Retail Index (a published industry index) over the five fiscal years beginning February 2, 2019.
Performance Graph The Stock Price Performance Graph below compares our cumulative stockholder return with that of the S&P 500 Index (a broad equity market index) and the S&P 1500 Apparel Retail Index (a published industry index) over the five fiscal years beginning February 1, 2020.
Repurchases may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program and the program may be discontinued at any time, without prior notice.
Repurchases may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means.
On March 20, 2024, we announced that our Board of Directors has approved a special cash dividend of $2.25 per share on our common stock and a quarterly cash dividend of $0.30 per share on our common stock.
On April 3, 2025, we announced that our Board of Directors has approved a quarterly cash dividend of $0.30 per share on our common stock. The cash dividend will be payable on May 2, 2025 to shareholders of record as of the close of business on April 16, 2025.
COMPARISON OF FIVE YEAR TOTAL RETURN AMONG GUESS?, INC., S&P 500 INDEX AND S&P 1500 APPAREL RETAIL INDEX Period Ended Company/Market/Peer Group 2/2/2019 2/1/2020 1/30/2021 1/29/2022 1/28/2023 2/3/2024 Guess?, Inc. $ 100.00 $ 115.42 $ 127.67 $ 120.30 $ 133.80 $ 141.77 S&P 1500 Apparel Retail Index 100.00 111.02 122.59 136.53 154.25 190.27 S&P 500 Index 100.00 121.56 142.53 172.46 161.03 199.42
COMPARISON OF FIVE YEAR TOTAL RETURN AMONG GUESS?, INC., S&P 500 INDEX AND S&P 1500 APPAREL RETAIL INDEX Period Ended Company/Market/Peer Group 2/1/2020 1/30/2021 1/29/2022 1/28/2023 2/3/2024 2/1/2025 Guess?, Inc. $ 100.00 $ 110.61 $ 104.22 $ 115.92 $ 122.83 $ 80.10 S&P 1500 Apparel Retail Index 100.00 110.43 122.98 138.95 171.39 210.26 S&P 500 Index 100.00 117.25 141.87 132.47 164.06 202.59
As of February 3, 2024, we had no remaining authority under the 2021 Share Repurchase Program to purchase our common stock. 2 Consists of shares surrendered to, or withheld by, us in satisfaction of employee tax withholding obligations that occur upon vesting of restricted stock awards granted under our 2004 Equity Incentive Plan, as amended. 3 On March 25, 2024, the Board of Directors authorized a new $200 million share repurchase program.
There is no minimum or maximum number of shares to be repurchased under the program and the program may be discontinued at any time, without prior notice. 2 Consists of shares surrendered to, or withheld by, us in satisfaction of employee tax withholding obligations that occur upon vesting of restricted stock awards granted under our 2004 Equity Incentive Plan, as amended.
Removed
Both dividends will be payable on May 3, 2024 to shareholders of record as of the close of business on April 17, 2024.
Added
The payment of cash dividends in the future will be based upon a number of business, legal and other considerations, including changes in our financial position, capital allocation plans (including a desire to retain or accumulate cash), capital spending plans, stock purchase plans, acquisition strategies, strategic initiatives, debt payment plans (including a desire to maintain or improve credit ratings on our debt securities), debt covenant requirements, pension funding or other benefits payments.
Removed
During fiscal 2023, the Board of Directors expanded its repurchase authorization by $100 million, leaving a new capacity of $249.0 million at that time. In January 2024, the Board of Directors expanded its repurchase authorization by approximately $1.4 million to cover the repurchases associated with the issuance of the Additional 2028 Notes.
Removed
We have agreed to use a portion of the authorized share repurchase program to repurchase shares of our common stock in connection with the exchange of 2024 Notes for additional 2028 Notes as described in “Part IV.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

215 edited+46 added−52 removed80 unchanged
Biggest change(24,163) 11,446 Adjusted net earnings attributable to Guess?, Inc. $ 174,036 $ 161,056 Net earnings per common share attributable to common stockholders: GAAP diluted $ 3.09 $ 2.18 Convertible notes if-converted method 10 0.39 0.40 Certain professional service and legal fees and related (credits) costs 1 (0.15) 0.08 Transaction costs 2 0.01 — Asset impairment charges 3 0.07 0.11 Net gains on lease modifications 4 (0.02) (0.03) Loss on extinguishment of debt 5 0.13 — Amortization of debt discount 6 0.01 — Fair value remeasurement of derivatives 7 (0.01) — Discrete income tax adjustments 8 (0.38) 0.00 Adjusted diluted $ 3.14 $ 2.74 Weighted average common shares outstanding attributable to common stockholders: GAAP diluted 69,782 70,087 Adjusted diluted 10 54,661 58,123 ______________________________________________________________________ 1 Adjustments represent certain professional service and legal fees and related (credits) costs which we otherwise would not have incurred as part of our business operations.
Biggest changeA reconciliation of reported GAAP results to comparable non-GAAP results follows (in thousands, except per share data): Fiscal 2025 Fiscal 2024 Reported GAAP net earnings attributable to Guess?, Inc. $ 60,423 $ 198,199 Certain professional service and legal fees and related (credits) costs 1 798 (14,033) Transaction costs 2 5,726 565 Separation charges 3 7,075 — Asset impairment charges 4 6,624 6,887 Net gains on lease modifications 5 (718) (1,662) Loss on extinguishment of debt 6 1,952 12,351 Amortization of debt discount 7 3,025 622 Fair value remeasurement of derivatives 8 60,737 (998) Gain on sale of assets 9 (14,569) — Discrete income tax adjustments 10 (24,553) (26,854) Income tax impact from adjustments 11 (2,010) (1,041) Total adjustments affecting net earnings attributable to Guess?, Inc. 44,087 (24,163) Adjusted net earnings attributable to Guess?, Inc. $ 104,510 $ 174,036 Net earnings per common share attributable to common stockholders: GAAP diluted $ 0.77 $ 3.09 Certain professional service and legal fees and related (credits) costs 1,12 0.01 (0.15) Transaction costs 2,12 0.07 0.01 Separation charges 3,12 0.08 — Asset impairment charges 4,12 0.08 0.07 Net gains on lease modifications 5,12 (0.01) (0.02) Loss on extinguishment of debt 6,12 0.02 0.13 Amortization of debt discount 7,12 0.03 0.01 Fair value remeasurement of derivatives 8 0.89 (0.01) Gain on sale of assets 9,12 (0.17) — Discrete income tax adjustments 10 (0.36) (0.38) Convertible notes if-converted method 13 0.55 0.39 Adjusted diluted $ 1.96 $ 3.14 Weighted average common shares outstanding attributable to common stockholders: GAAP diluted 68,594 69,782 Adjusted diluted 12 52,864 54,661 ______________________________________________________________________ 1 Adjustments represent certain professional service and legal fees and related (credits) costs which we otherwise would not have incurred as part of our business operations. 2 Adjustments represent transaction costs in connection with the rag & bone acquisition which we otherwise would not have incurred as part of our business operations. 3 Adjustments represent separation charges related to the transition of the operation of our U.S. distribution center, which was formerly owner-operated, to a third-party logistics provider. 4 Adjustments represent asset impairment charges related primarily to impairment of property and equipment related to certain retail locations resulting from under-performance and expected store closures. 5 Adjustments represent net gains on lease modifications related primarily to the early termination of certain lease agreements. 6 Adjustments represent loss on extinguishment of debt from a portion of the exchanged 2024 Notes in April 2023 and March 2024. 56 Table of Contents 7 In April 2023, January 2024 and March 2024, we issued $275 million, $65 million and $12 million principal amount of 3.75% convertible senior notes due 2028 in private offerings, respectively.
Some of our transactions, primarily those in Europe, Canada, China, Hong Kong, Mexico and South Korea are denominated in U.S. dollars, Swiss francs, British pounds and Russian roubles, exposing them to exchange rate fluctuations when these transactions (such as inventory purchases or periodic lease payments) are converted to their functional currencies.
Some of our transactions, primarily those in Europe, Canada, South Korea, China, Hong Kong and Mexico are denominated in U.S. dollars, Swiss francs, British pounds and Russian roubles, exposing them to exchange rate fluctuations when these transactions (such as inventory purchases or periodic lease payments) are converted to their functional currencies.
As a result, we may be exposed to volatility related to unrealized gains or losses on the translation of present value of future lease payment obligations when translated at the exchange rate as of a reporting period-end.
As a result, we may be exposed to volatility related to unrealized gains or losses on the translation of present value of future lease payment obligations when translated at the exchange rate as of a reporting period-end.
There has been no material impact to our existing operations as a result of the ongoing war in Ukraine, although we are limited in our ability to expand our business in Russia due to the U.S. ban on new investments in Russia described below under “―Impact of Sanctions and Trade Restrictions.” With respect to our supply and distribution channels, we have experienced increased costs and transit times associated with deliveries related to our Russia operations, due in part to new procedures and sanctions screening implemented in response to the war in Ukraine and the imposition of related sanctions.
There has been no material impact to our existing operations as a result of the ongoing war in Ukraine, although we are limited in our ability to expand our business in Russia due to the U.S. ban on new investments in Russia described below under “―Impact of Economic Sanctions and Trade Restrictions.” With respect to our supply and distribution channels, we have experienced increased costs and transit times associated with deliveries related to our Russia operations, due in part to new procedures and economic sanctions screening implemented in response to the war in Ukraine and the imposition of related economic sanctions.
If a store remodel results in a square footage change of more than 15%, or involves a relocation or a change in store concept, the store sales are removed from the retail comparable sales base until the store has been opened at its new size, in its new location or under its new concept for 13 full fiscal months.
If a store remodel results in a square footage change of more than 15% or involves a relocation or a change in store concept, the store sales are removed from the comparable store base until the store has been opened at its new size, in its new location or under its new concept for 13 full fiscal months.
We assessed the applicability of these sanctions and trade restrictions based on internal assessments of relevant regulations and concluded our existing operations in Russia and Belarus have not been materially affected by these sanctions and trade restrictions, although we are limited from further expansion of our business in Russia.
We assessed the applicability of these economic sanctions and trade restrictions based on internal assessments of relevant regulations and concluded our existing operations in Russia and Belarus have not been materially affected by these economic sanctions and trade restrictions, although we are limited from further expansion of our business in Russia.
Corresponding adjustments are expected to be made to the strike prices with respect to the convertible note hedges and the warrants entered into by the Company in connection with the offerings of the corresponding Notes, each of which will be decreased in accordance with the terms of the applicable convertible note hedge confirmations and warrant confirmations.
Corresponding adjustments are expected to be made to the strike prices with respect to the convertible note hedges and the warrants entered into by the Company in connection with the offerings of the 2028 Notes, each of which will be decreased in accordance with the terms of the applicable convertible note hedge confirmations and warrant confirmations.
Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the indenture governing the Notes.
Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the indenture governing the 2028 Notes.
We continue to optimize our brand architecture to be relevant with our three target consumer groups: Heritage, Millennials, and Generation Z. We have developed and launched one global line of product for all 25 categories we represent.
We continue to optimize our core brand architecture to be relevant with our three target consumer groups: Heritage, Millennials and Generation Z. We have developed and launched one global line of product for all 25 categories we represent.
Employee Stock Purchase Plan Our qualified employee stock purchase plan (“ESPP”) allows qualified employees (as defined) to participate in the purchase of designated shares of our common stock at a price equal to 85% of the lower of the closing price at the beginning or end of each quarterly stock purchase period.
Employee Stock Purchase Plan Our qualified employee stock purchase plan (“ESPP”) allows qualified employees (as defined in the ESPP) to participate in the purchase of designated shares of our common stock at a price equal to 85% of the lower of the closing price at the beginning or end of each quarterly stock purchase period.
The debt discount resulted from: (1) the modification accounting for a portion of the exchanged 2024 Notes in April 2023, and (2) recognized embedded derivative liability for the issuance of Additional 2028 Notes in January 2024.
The debt discount resulted from: (1) the modification accounting for a portion of the exchanged 2024 Notes in April 2023, and (2) recognized embedded derivative liability for the issuance of Additional 2028 Notes.
As a result of the Tax Reform, we had a substantial amount of previously taxed earnings that could be distributed to the U.S. without additional material U.S. taxation. We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings and regularly review our cash positions and determination of permanent reinvestment of foreign earnings.
As a result of the Tax Reform, we had a substantial amount of previously taxed earnings that could be distributed to the United States without additional material U.S. taxation. We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings and regularly review our cash positions and determination of permanent reinvestment of foreign earnings.
Alternatively, if the U.S. dollar weakens relative to the respective fiscal 2024 foreign exchange rates, our revenues and operating results, as well as our other cash balance sheet items, could be positively impacted by foreign currency fluctuations during fiscal 2025, particularly in these regions.
Alternatively, if the U.S. dollar weakens relative to the respective fiscal 2025 foreign exchange rates, our revenues and operating results, as well as our other cash balance sheet items, could be positively impacted by foreign currency fluctuations during fiscal 2026, particularly in these regions.
As a result, these contracts are accounted for as derivative assets, including the portion related to the reclassification of the pre-existing options purchased in April 2023, which had previously been recorded in paid-in capital in our consolidated balance sheet. We include derivative assets within other assets in our consolidated balance sheet.
As a result, these contracts are accounted for as derivative assets, including the portion related to the reclassification of the pre-existing options purchased in April 2023, which had previously been recorded in paid-in capital in our consolidated balance sheets. We include derivative assets within other assets in our consolidated balance sheets.
These costs are amortized to interest expense using the effective interest method over the term of the 2024 Notes. On January 30, 2022, we adopted the authoritative guidance which simplifies the accounting for convertible instruments and contracts in an entity’s own equity using the modified retrospective method.
These costs were amortized to interest expense using the effective interest method over the term of the 2024 Notes. On January 30, 2022, we adopted the authoritative guidance which simplifies the accounting for convertible instruments and contracts in an entity’s own equity using the modified retrospective method.
Our retail sales in Turkey, a relatively small market, had an outsized impact on our retail comparable sales (including e-commerce), contributing a minimal impact in U.S. dollars and a positive impact of 2% in constant currency, largely due to the current hyper-inflation environment in Turkey.
Our retail sales in Turkey, a relatively small market, had an outsized impact on our retail comparable sales (including e-commerce), contributing a positive impact of 1% in U.S. dollars and 2% in constant currency, largely due to the current hyper-inflation environment in Turkey.
During fiscal 2024, the average U.S. dollar rate was stronger against the Turkish lira, Canadian dollar, Russian rouble, Japanese yen, Korean won, and Chinese yuan and weaker against the euro, British pound, Polish zloty and Mexican peso, compared to the average rate in fiscal 2023.
During fiscal 2025, the average U.S. dollar rate was stronger against the euro, Canadian dollar, Chinese yuan, Japanese yen, Korean won, Mexican peso, Russian rouble and Turkish lira and weaker against the British pound and Polish zloty, compared to the average rate in fiscal 2024.
Management evaluates its estimates and judgments on an ongoing basis including those related to the allowances for doubtful accounts, sales return and markdown allowances, valuation of inventories, share-based compensation, income taxes, recoverability of deferred income taxes, unrecognized income tax benefits, the useful life of assets for depreciation and amortization, evaluation of asset impairment (including goodwill and long-lived assets, such as property and equipment and operating lease right-of-use (“ROU”) assets), pension obligations, workers’ compensation and medical self-insurance expense and accruals, litigation reserves, restructuring expense and accruals and convertible senior notes.
Management evaluates its estimates and judgments on an ongoing basis including those related to the allowances for doubtful accounts, sales return and markdown allowances, valuation of inventories, share-based compensation, income taxes, recoverability of deferred income taxes, unrecognized income tax benefits, the useful life of assets for depreciation and amortization, evaluation of asset impairment (including goodwill and long-lived assets, such as property and equipment and operating lease right-of-use (“ROU”) assets), pension obligations, workers’ compensation and medical self-insurance expense and accruals, derivative valuation, litigation reserves, restructuring expense and accruals, convertible senior notes and accounting for business combinations.
We continue to evaluate our compensation and benefit offerings to be competitive with the current market and evaluate strategies to be more effective and efficient at all levels within the organization, including how to best serve our customers. 42 Table of Contents Raw Materials.
We continue to evaluate our compensation and benefit offerings to be competitive with the current market and evaluate strategies to be more effective and efficient at all levels within the organization, including how to best serve our customers. 43 Table of Contents Raw Materials.
Convertible Senior Notes In April 2019, we issued $300 million principal amount of 2024 Notes in a private offering.
Convertible Senior Notes In April 2019, we issued $300 million principal amount of the 2024 Notes in a private offering.
At roughly prevailing exchange rates, we expect currencies to represent a headwind on revenues for fiscal 2025. We enter into derivative financial instruments to offset some but not all of the exchange risk on foreign currency transactions.
At roughly prevailing exchange rates, we expect currencies to represent a headwind on revenues for fiscal 2026. We enter into derivative financial instruments to offset some but not all of the exchange risk on foreign currency transactions.
If the U.S. dollar strengthens relative to the respective fiscal 2024 foreign exchange rates, foreign exchange could negatively impact our revenues and operating results, as well as our international cash and other balance sheet items during fiscal 2025, particularly in Europe (primarily the euro, British pound, Turkish lira and Russian rouble), Canada and Mexico.
If the U.S. dollar strengthens relative to the respective fiscal 2025 foreign exchange rates, foreign exchange could negatively impact our revenues and operating results, as well as our international cash and other balance sheet items during fiscal 2026, particularly in Europe (primarily with the euro, British pound, Turkish lira and Russian rouble), Canada and Mexico.
We base our allowances on analysis of the aging of accounts receivable at the date of the financial statements, assessments of historical and current collection trends, an evaluation of the impact of current economic conditions and whether we obtained credit insurance or other guarantees which are not considered freestanding against the related account receivable balances.
We base our allowances on analysis of the aging of accounts receivable at the date of the financial statements, assessments of historical and current collection trends, an evaluation of the impact of current economic conditions and whether we obtained credit insurance or 63 Table of Contents other guarantees which are not considered freestanding against the related account receivable balances.
The convertible note hedge transactions we entered into in connection with our issuance of the Notes is expected generally to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of the Notes that are converted, as the case may be.
The convertible note hedge transaction we entered into in connection with our issuance of the 2028 Notes is expected generally to reduce the potential dilution upon conversion of the 2028 Notes and/or offset any cash payments we are required to make in excess of the principal amount of the 2028 Notes that are converted, as the case may be.
As such, this amount reflects operating lease costs that are considered in the measurement of the related operating lease liabilities, which may include fixed payments related to rent, insurance, property taxes, sales promotion, 60 Table of Contents common area maintenance and certain utility charges, where applicable.
As such, this amount reflects operating lease costs that are considered in the measurement of the related operating lease liabilities, which may include fixed payments related to rent, insurance, property taxes, sales promotion, common area maintenance and certain utility charges, where applicable.
These critical assumptions are evaluated annually which enables expected future payments for benefits to be stated at present value on the measurement date. If actual results are not consistent with actuarial assumptions, the amounts recognized for the defined benefit plans could change significantly. Refer to “Part IV.
These critical assumptions are evaluated annually which enables expected future payments for benefits to be stated at present value on the measurement date. If actual results are not consistent with actuarial assumptions, the amounts recognized for the defined benefit plans could change significantly.
Net realizable value of aged inventory is estimated based on historical sales trends for each product line category, the impact of market trends, an evaluation of economic conditions, available liquidation channels and the value of 63 Table of Contents current orders relating to the future sales of this type of inventory.
Net realizable value of aged inventory is estimated based on historical sales trends for each product line category, the impact of market trends, an evaluation of economic conditions, available liquidation channels and the value of current orders relating to the future sales of this type of inventory.
Valuation of Goodwill, Intangible and Other Long-Lived Assets We assess the impairment of our long-lived assets (related primarily to goodwill, property and equipment and operating right-of-use assets), which requires us to make assumptions and judgments regarding the carrying value of these assets on an annual basis, or more frequently if events or changes in circumstances indicate that the assets might be impaired.
Valuation of Goodwill, Intangible and Other Long-Lived Assets We assess the impairment of our long-lived assets (related primarily to goodwill, property and equipment and operating lease ROU assets), which requires us to make assumptions and judgments regarding the carrying value of these assets on an annual basis, or more frequently if events or changes in circumstances indicate that the assets might be impaired.
Deferred income tax assets and liabilities are determined based on differences between financial reporting bases and income tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply 65 Table of Contents to taxable income in the periods in which the deferred income tax asset or liability is expected to be realized or settled.
Deferred income tax assets and liabilities are determined based on differences between financial reporting bases and income tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the periods in which the deferred income tax asset or liability is expected to be realized or settled.
The above table also excludes current liabilities (other than short-term borrowings) as these amounts will be paid within one year and certain long-term liabilities that do not require cash payments. Off-Balance Sheet Arrangements Other than certain obligations and commitments included in the table above, we did not have any material off-balance sheet arrangements as of February 3, 2024.
The above table also excludes current liabilities (other than short-term borrowings) as these amounts will be paid within one year and certain long-term liabilities that do not require cash payments. Off-Balance Sheet Arrangements Other than certain obligations and commitments included in the table above, we did not have any material off-balance sheet arrangements as of February 1, 2025.
We anticipate we will be able to satisfy our ongoing cash requirements for the foreseeable future, including at least the next 12 months, for working capital, capital expenditures, payments on our debt, including the 2024 Notes, finance leases and operating leases, as well as lease modification payments, the acquisition of rag & bone and any other potential acquisitions and investments, expected income tax payments, dividend payments to stockholders and share repurchases, if any, primarily with cash flow from operations and existing cash balances as supplemented by borrowings under our existing credit facilities and proceeds from our term loans and other indebtedness, as needed.
We anticipate we will be able to satisfy our ongoing cash requirements for the foreseeable future, including at least the next 12 months, for working capital, capital expenditures, payments on our debt, finance leases and operating leases, as well as lease modification payments, potential acquisitions and investments, expected income tax payments, dividend payments to stockholders and share repurchases, if any, primarily with cash flow from operations and existing cash balances as supplemented by borrowings under our existing credit facilities and proceeds from our term loans and other indebtedness, as needed.
The weighted average diluted shares outstanding used for adjusted diluted EPS also excludes the dilutive impact of the Notes under the if-converted method based on the bond hedge contracts in place. These non-GAAP measures are provided in addition to, and not as an alternative for, our reported GAAP results. These items affect the comparability of our reported results.
The weighted average diluted shares outstanding used for adjusted diluted EPS also excludes the dilutive impact of the Notes, based on the bond hedge contracts in place. These non-GAAP measures are provided in addition to, and not as an alternative for, our reported GAAP results. These items affect the comparability of our reported results.
We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings and regularly reviews our cash positions and determination of indefinite reinvestment of foreign earnings.
We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings and regularly review our cash positions and determination of indefinite reinvestment of foreign earnings.
Excluded from the above table of material cash requirements is the noncurrent liability for unrecognized tax benefits, including penalties and interest, of $63.4 million. This liability for unrecognized tax benefits has been excluded because we cannot make a reliable estimate of the period in which the liability will be settled, if ever.
Excluded from the above table of material cash requirements is the noncurrent liability for unrecognized tax benefits, including penalties and interest, of $40.3 million. This liability for unrecognized tax benefits has been excluded because we cannot make a reliable estimate of the period in which the liability will be settled, if ever.
Critical Accounting Policies and Estimates The Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the U.S., which require management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Critical Accounting Policies and Estimates The Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
We consider each individual regular retail location as an asset group for impairment testing, which is the lowest level at which individual cash flows can be identified. The asset group includes leasehold improvements, furniture, fixtures and equipment, computer hardware and software, operating lease right-of-use (“ROU”) assets including lease acquisition costs and certain long-term security deposits, and excludes operating lease liabilities.
We consider each individual regular retail location as an asset group for impairment testing, which is the lowest level at which individual cash flows can be identified. The asset group includes leasehold improvements, furniture, fixtures and equipment, computer hardware and software, operating lease ROU assets including lease acquisition costs and certain long-term security deposits, and excludes operating lease liabilities.
In accordance with the terms of the indentures governing the corresponding Notes, we are required to adjust the conversion rate and the conversion price of the 2024 Notes and the 2028 Notes for quarterly dividends exceeding $0.1125 per share and $0.225 per share, respectively.
In accordance with the terms of the indentures governing the 2028 Notes, we are required to adjust the conversion rate and the conversion price of the 2028 Notes for quarterly dividends exceeding $0.225 per share, respectively.
These measures include: (i) blocking sanctions prohibiting dealings with various Russian senior government officials, and companies in various sectors important to the Russian economy, including major Russian financial institutions; (ii) expanded sectoral sanctions related to designated Russian entities’ ability to raise capital; (iii) the disconnection of certain Russian and Belarusian banks from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) financial messaging network; (iv) a ban on new investment in Russia; (v) a ban on the provision of certain services in Russia in the areas of accounting, trust formation, management consulting , quantum computing, architecture, engineering and in relation to the maritime transport of Russian-origin crude oil and petroleum products; (vi) bans on the import into the United States of certain Russian origin products, including various energy products; (vii) bans on the conduct of business or investment activity in the Russian-controlled Crimea, Donetsk and Luhansk regions of Ukraine; and (viii) restrictions on the export of various products to Russia and Belarus, including certain dual-use industrial and commercial products, and luxury goods.
These measures may include: (i) blocking sanctions prohibiting dealings with various Russian senior government officials, and companies in various sectors important to the Russian economy, including major Russian financial institutions; (ii) expanded sectoral sanctions related to designated Russian entities’ ability to raise capital; (iii) the disconnection of certain Russian and Belarusian banks from the SWIFT financial messaging network; (iv) a ban on new investment in Russia; (v) a ban on the provision of certain services in Russia in the areas of accounting, trust formation, management consulting , quantum computing, architecture, engineering and in relation to the maritime transport of Russian-origin crude oil and petroleum products; (vi) bans on the import into the United States of certain Russian origin products, including various energy products; (vii) bans or certain other restrictions on the conduct of business or investment activity in the Russian-controlled Crimea, Donetsk, Kherson, Luhansk and Zaporizhzhia regions of Ukraine; and (viii) restrictions on the export of various products to Russia and Belarus, including certain dual-use industrial and commercial products, and luxury goods.
Generally, our working capital needs are highest during the late summer and fall as our inventories increase before the holiday selling period. In addition, in the U.S., we need liquidity for payment of dividends to our stockholders and to fund share repurchases, if any.
Generally, our working capital needs are highest during the late summer and fall as our inventories increase before the holiday selling period. In addition, in the United States, we need liquidity for payment of dividends to our stockholders and to fund share repurchases, if any.
Risk Factors” for a discussion of risk factors which could reasonably be likely to result in a decrease of internally generated funds available to finance capital expenditures and working capital requirements.
Risk Factors” in this Annual Report for a discussion of risk factors which could reasonably be likely to result in a decrease of internally generated funds available to finance capital expenditures and working capital requirements.
Income Taxes We adopted authoritative guidance which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken in an income tax return.
Income Taxes We account for uncertainty in income taxes in accordance with authoritative guidance, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken in an income tax return.
As of February 3, 2024, our total assets in Russia, all of which are held by Guess CIS, represented less than 2% of our total assets, consisting primarily of leasehold right of use assets, store inventory, furnishings and fixtures, and receivables. We only maintain inventory in Russia in an amount sufficient for operating our Russian retail stores.
As of February 1, 2025, our total assets in Russia, all of which are held by Guess CIS, represented slightly less than 2% of our total assets, consisting primarily of leasehold right of use assets, store inventory, furnishings and fixtures, and receivables. We only maintain inventory in Russia in an amount sufficient for operating our Russian retail stores.
At stock prices in excess of $44.15 for the 2024 Notes and $41.37 for the 2028 Notes, we would have an obligation to deliver additional shares in excess of the dilution protection provided by the bond hedges. Our discussion and analysis herein also includes certain constant currency financial information.
At stock prices in excess of $37.43 for the 2028 Notes, we would have an obligation to deliver additional shares in excess of the dilution protection provided by the bond hedges. Our discussion and analysis herein also includes certain constant currency financial information.
The incremental income tax cost to repatriate these earnings to the U.S. is immaterial. We intend to indefinitely reinvest the remaining earnings from our foreign subsidiaries for which a deferred income tax liability has not already been recorded.
The incremental tax cost to repatriate these earnings to the United States is immaterial. We intend to indefinitely reinvest the remaining earnings from our foreign subsidiaries for which a deferred income tax liability has not already been recorded.
The incremental tax cost to repatriate these earnings to the U.S. is immaterial. We intend to indefinitely reinvest the remaining earnings from our foreign subsidiaries for which a deferred income tax liability has not already been recorded.
The incremental tax cost to repatriate these earnings to the United States is immaterial. We intend to indefinitely reinvest the remaining earnings from our foreign subsidiaries for which a deferred income tax liability has not already been recorded.
During the first quarter of fiscal 2024, in connection with the April 2023 exchange and subscription offering related to the 2024 Notes and the 2028 Notes, we repurchased approximately 2.2 million shares of our common stock for $42.8 million, including excise tax, through broker-assisted market transactions, pursuant to our existing share repurchase program.
During the first quarter of fiscal 2024, in connection with the April 2023 exchange and subscription offering related to the 2024 Notes and the Initial 2028 Notes, we repurchased approximately 2.2 million shares of our common stock for $42.8 million, including excise tax, through broker-assisted market transactions, pursuant to our 2021 Share Repurchase Program (as defined below).
Retail comparable sales (including e-commerce) decreased 5% in U.S. dollars and 6% in constant currency compared to the prior year. The inclusion of our e-commerce sales had a minimal impact on the retail comparable sales percentage in both U.S. dollars and constant currency.
Retail comparable sales (including e-commerce) decreased 12% in U.S. dollars and 11% in constant currency compared to the prior year. The inclusion of our e-commerce sales had a minimal impact on the retail comparable sales percentage in both U.S. dollars and constant currency.
Risk Factors— Our business may also be affected by existing or future sanctions and export controls targeting Russia and other responses to Russia's invasion of Ukraine for additional information. We are actively monitoring the situation in Ukraine.
Risk Factors— Our business may also be affected by existing or future economic sanctions and export controls targeting Russia and other responses to Russia's invasion of Ukraine” of this Annual Report for additional information. We are actively monitoring the situation in Ukraine.
Fiscal 2023 Compared to Fiscal 2022 The comparison of cash flows from operations for fiscal 2023 to fiscal 2022 has been omitted from this Form 10-K, but can be referenced in Part II, Item 7.
Fiscal 2024 Compared to Fiscal 2023 The comparison of cash flows from operations for fiscal 2024 to fiscal 2023 has been omitted from this Form 10-K, but can be referenced in “Part II., Item 7.
Fiscal 2023 Compared to Fiscal 2022 The comparison of results of operations for fiscal 2023 to fiscal 2022 has been omitted from this Form 10-K, but can be referenced in Part II, Item 7.
Fiscal 2024 Compared to Fiscal 2023 The comparison of results of operations for fiscal 2024 to fiscal 2023 has been omitted from this Form 10-K, but can be referenced in “Part II., Item 7.
Earnings from operations from our Licensing segment increased by $14 million for fiscal 2024, compared to fiscal 2023 . The increase was driven b y the favorable impact to earnings from higher revenues.
Earnings from operations from our Licensing segment increased by $10 million for fiscal 2025, compared to fiscal 2024 . The increase was driven b y the favorable impact to earnings from higher revenues.
In addition, pursuant to the terms of the 2028 Notes, if our stock trading price exceeds 130% of the conversion price of the 2028 Notes (approximately $24.45 per share as of February 3, 2024) for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, the last trading day of any calendar quarter, holders of the 2028 Notes would have the right to convert their convertible notes during the next calendar quarter.
In addition, pursuant to the terms of the 2028 Notes, if our stock trading price exceeds 130% of the conversion price of the 2028 Notes (approximately $22.12 per share as of February 1, 2025) for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, the last trading day of any calendar quarter, holders of the 2028 Notes would have the right to convert their convertible notes during the next calendar quarter.
As a result of changes in the value of the insurance policy investments, we recorded unrealized gains (losses) of $1.1 million, $(5.7) million and $0.6 million in other income (expense) during fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
As a result of changes in the value of the insurance policy investments, we recorded unrealized gains (losses) of $2.2 million, $1.1 million and $(5.7) million in other income (expense) during fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
In January 2024, we issued $64.8 million aggregate principal amount of Additional 2028 Notes and retired approximately $67.1 million aggregate principal of 2024 Notes in a private offering.
In January 2024, we issued $64.8 million aggregate principal amount of January Additional 2028 Notes and retired approximately $67.1 million aggregate principal of 2024 Notes in a private offering. In March 2024, we issued $12.1 million aggregate principal amount of March Additional 2028 Notes and retired approximately $14.6 million aggregate principal of 2024 Notes in a private offering.
We continue to assess all of our operations in Russia to ensure compliance with applicable sanctions, including most notably the U.S. ban on new investment in Russia. See Part I, Item 1A.
We continue to assess all of our operations in Russia to ensure compliance with applicable economic sanctions, including most notably the U.S. ban on new investment in Russia. See “Item 1A.
If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax. For example, as of February 3, 2024, we determined that approximately $228.5 million of such foreign earnings are no longer indefinitely reinvested.
If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax. For example, as of February 1, 2025, we determined that approximately $300.0 million of such foreign earnings are no longer indefinitely reinvested.
Products We derive our net revenue from the sale of GUESS?, G by GUESS (GbG), GUESS Kids and MARCIANO apparel and certain accessories and our licensees’ products through our worldwide network of directly-operated and licensed retail stores, wholesale customers and distributors, as well as our online sites. We also derive royalty revenue from worldwide licensing activities.
Products We derive our net revenue from the sale of GUESS?, G by GUESS (GbG), GUESS Kids, GUESS JEANS, MARCIANO and rag & bone apparel and certain accessories and our licensees’ products through our worldwide network of directly-operated and licensed retail stores, wholesale customers and distributors, as well as our online sites.
Quantitative and Qualitative Disclosures About Market Risk.” Inflation Impacts Our financial results have been and may continue to be impacted by inflationary pressures affecting our overall cost structure, including transportation, employee compensation, raw materials and other costs. We estimate certain of our costs are impacted by inflation and other factors as follows: Transportation.
Inflation Impacts Our financial results have been and may continue to be impacted by inflationary pressures affecting our overall cost structure, including transportation, employee compensation, raw materials and other costs. We estimate certain of our costs are impacted by inflation and other factors as follows: Transportation.
Overall this had a minimal favorable impact on the translation of our international revenues and an unfavorable impact on earnings from operations during fiscal 2024 compared to the prior year.
Overall, this had an unfavorable impact on the translation of our international revenues and earnings from operations during fiscal 2025 compared to the prior year.
Changes in the fair value of forward contracts designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) (“AOCL”) within stockholders’ equity and are 64 Table of Contents recognized in cost of product sales in the period which approximates the time the hedged merchandise inventory is sold.
Changes in the fair value of the U.S. dollar forward contracts for anticipated U.S. dollar merchandise purchases designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) (“AOCL”) within stockholders’ equity and are recognized in cost of product sales in the period which approximates the time the hedged merchandise inventory is sold.
The projected benefit obligation was $37.7 million and $42.4 million as of February 3, 2024 and January 28, 2023, respectively, and was included in accrued expenses and other long-term liabilities in our consolidated balance sheets depending on the expected timing of payments. SERP benefit payments of $2.1 million and $1.7 million were made during fiscal 2024 and fiscal 2023, respectively.
The projected benefit obligation was $33.8 million and $37.7 million as of February 1, 2025 and February 3, 2024, respectively, and was included in accrued expenses and other long-term liabilities in our consolidated balance sheets depending on the expected timing of payments. SERP benefit payments of $1.9 million and $2.1 million were made during fiscal 2025 and fiscal 2024, respectively.
To ensure expenses are separated appropriately, we track activities at each distribution center location and record the costs associated with our shipments of goods either as cost of sales or as selling, general and administrative expenses, accordingly. SG&A Rate. Our SG&A rate increased 1.2% for fiscal 2024, compared to fiscal 2023.
To ensure expenses are separated appropriately, we track activities at each distribution center location and record the costs associated with our shipments of goods either as cost of sales or as SG&A expenses, accordingly. SG&A Rate. Our SG&A rate increased 3.5% for fiscal 2025, compared to fiscal 2024.
As of February 3, 2024, approximately 51% of our total net trade receivables and 63% of our European net trade receivables were subject to credit insurance coverage, certain bank guarantees or letters of credit for collection purposes. Our credit insurance coverage contains certain terms and conditions specifying deductibles and annual claim limits.
As of February 1, 2025, approximately 50% of our total net trade receivables and 62% of our European net trade receivables were subject to credit insurance coverage, certain bank guarantees or letters of credit for collection purposes. Our credit insurance coverage contains certain terms and conditions specifying deductibles and annual claim limits.
We have identified our European wholesale and European retail components of our Europe segment, our Americas Retail segment and our Americas Wholesale segment as reporting units for goodwill impairment testing. For long-lived assets (other than goodwill), the majority relate to our retail operations which consist primarily of regular retail and flagship locations.
We have established four reporting units for goodwill impairment testing, which include Europe Wholesale, Europe Retail (both components within the Europe segment), the Americas Retail segment and the Americas Wholesale segment. For long-lived assets (other than goodwill), the majority relate to our retail operations which consist primarily of regular retail and flagship locations.
Impact of Sanctions and Trade Restrictions Our Russian operations are subject to various sanctions and export control measures targeting Russia, Belarus, and the Russian-controlled regions of Ukraine (Crimea, Donetsk, and Luhansk).
Impact of Economic Sanctions and Trade Restrictions Our Russian operations are subject to various economic sanctions and export controls targeting Russia, Belarus, and the Russian-controlled regions of Ukraine (Crimea, Donetsk, Kherson, Luhansk and Zaporizhzhia).
References to financial results excluding the impact of these items are non-GAAP measures and are addressed below under “Non-GAAP Measures.” Highlights of our performance for fiscal 2024 compared to the prior year are presented below, followed by a more comprehensive discussion under “Results of Operations”: (References to constant currency results are non-GAAP measures and are addressed under “Non-GAAP Measures.”) Operations • Total net revenue increased 3.3% to $2.78 billion for fiscal 2024, compared to $2.69 billion in the prior year.
References to financial results excluding the impact of these items are non-GAAP measures and are addressed below under “—Non-GAAP Measures.” 47 Table of Contents Highlights of our performance for fiscal 2025 compared to the prior year are presented below, followed by a more comprehensive discussion under “Results of Operations” (references to constant currency results are non-GAAP measures and are addressed under “—Non-GAAP Measures.”): Operations • Total net revenue increased 7.9% to $3.0 billion for fiscal 2025, compared to $2.8 billion in the prior year.
If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax. As of February 3, 2024, we determined approximately $228.5 million of such foreign earnings are no longer indefinitely reinvested.
If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax.
On December 20, 2022, we entered into an amendment of our senior secured asset-based revolving credit facility, which increased borrowing capacity from $120 million to $150 million and extended the maturity date of the credit facility to December 20, 2027. As of February 3, 2024, we had approximately $110.5 million of borrowing capacity on this facility.
As of February 1, 2025, we had approximately $222.7 million of remaining borrowing capacity on this facility. In December 2022, we entered into an amendment of our senior secured asset-based revolving credit facility, which increased borrowing capacity from $120 million to $150 million and extended the maturity date of the credit facility to December 20, 2027.
We have flagship locations which are used as a regional marketing tool to build brand awareness and promote our current product. Provided the flagship locations continue to meet appropriate criteria, impairment for these locations is tested at a reporting unit level similar to goodwill since they do not have separately identifiable cash flows.
We have flagship locations which are used as a regional marketing tool to build brand awareness and promote our current product. Provided the flagship locations continue to meet appropriate criteria, impairment for these locations is tested by evaluating cash flows at a reporting unit level.
As of February 3, 2024, none of the conditions allowing holders of the 2028 Notes to convert had been met.
As of February 1, 2025, none of the conditions allowing holders of the 2028 Notes to convert had been met.
Our operations in Russia, Belarus and Ukraine represented less than 4% of our total revenue for fiscal 2024 and slightly more than 3% for fiscal 2023, with our operations in Russia comprising over 90% of this total revenue.
Our operations in Russia, Belarus and Ukraine represented less than 4% of our total revenue for both fiscal 2025 and fiscal 2024, with our operations in Russia comprising over 90% of this total revenue.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K for fiscal 2023, filed with the SEC on March 24, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K for fiscal 2024, filed with the SEC on April 1, 2024.
The cash surrender values of the insurance policies were $63.4 million and $64.4 million as of February 3, 2024 and January 28, 2023, respectively, and were included in other assets in our consolidated balance sheets.
The cash surrender values of the insurance policies were $63.8 million and $63.4 million as of February 1, 2025 and February 3, 2024, respectively, and were included in other assets in our consolidated balance sheets.
SG&A expenses increased 6.8% to $954.1 million for fiscal 2024, compared to $893.3 million in the prior year. • During fiscal 2024, we recognized asset impairment charges of $6.9 million, compared to $9.5 million in the prior year. • During fiscal 2024, we recognized net gains on lease modifications of $1.7 million, compared to $2.3 million in the prior year. • Oper ating margin increased 30 basis points to 9.5% for fiscal 2024, compared to 9.2% in the prior year.
SG&A expenses increased 18.9% to $1.1 billion for fiscal 2025, compared to $954 million in the prior year. • We recognized asset impairment charges of $7 million for each of fiscal 2025 and fiscal 2024. • During fiscal 2025, we recognized net gains on lease modifications of $1 million, compared to $2 million in the prior year. • Oper ating margin decreased 370 basis points to 5.8% for fiscal 2025, compared to 9.5% in the prior year.
The business segment operating results exclude corporate overhead costs, which consist of shared costs of the organization, asset impairment charges, net gains (losses) on lease modifications, restructuring charges and certain non-recurring credits (charges), if any.
The Licensing segment includes the worldwide licensing operations. The business segment operating results exclude corporate overhead costs, which consist of shared costs of the organization, asset impairment charges, net gains (losses) on lease modifications, separation charges, transaction costs, restructuring charges, gain on sale of assets and certain non-recurring credits (charges), if any.
This does not include variable lease costs that are excluded from the measurement of the operating lease liabilities, such as those charges that are based on a percentage of annual sales volume or estimates. In fiscal 2024, these variable charges totaled $105.8 million. Refer to “Part IV.
This does not include variable lease costs that are excluded from the measurement of the operating lease liabilities, such as those charges that are based on a percentage of annual sales volume or estimates. In fiscal 2025, these variable charges totaled $109.3 million.
Retail comparable sales (including e-commerce) decreased 2% in U.S. dollars and increased 1% in constant currency compared to the prior year. The inclusion of our e-commerce sales positively impacted the retail comparable sales percentage by 2% in both U.S. dollars and constant currency.
Retail comparable sales (including e-commerce) increased 3% in U.S. dollars and 6% in constant currency compared to the prior year. The inclusion of our e-commerce sales positively impacted the retail comparable sales percentage by 1% in U.S. dollars and a minimal amount in constant currency.
Currency translation fluctuations relating to our foreign operations unfavorably impacted SG&A expenses by $8 million. Asset Impairment Charges. During fiscal 2024, we recognized $6.4 million in impairment of property and equipment related to certain retail locations resulting from under-performance and expected store closures.
Currency translation fluctuations relating to our foreign operations favorably impacted SG&A expenses by $16 million. Asset Impairment Charges. During each of fiscal 2025 and fiscal 2024, we recognized $7 million of asset impairment charges related primarily to impairment of property and equipment related to certain retail locations resulting from under-performance and expected store closures.
In connection with the transactions in January 2024, we determined that the conversion feature embedded in the Additional 2028 Notes failed to satisfy the requirements for the derivative scope exception for contracts indexed in our own stock. As a result, the conversion feature embedded in the Additional 2028 Notes required bifurcation and is accounted for as an embedded derivative.
In connection with the transactions in January 2024 and March 2024, we determined that the conversion feature embedded in the Additional 2028 Notes failed to satisfy the requirements for the derivative scope exception for contracts indexed in our own stock.
See “―Liquidity and Capital Resources―Material Cash Requirements” for further information. Retail Comparable Sales We report National Retail Federation calendar retail comparable sales on a quarterly basis for our retail businesses which include the combined results from our brick-and-mortar retail stores and our e-commerce sites. We also separately report the impact of e-commerce sales on our retail comparable sales metric.
Retail Comparable Sales We report National Retail Federation calendar retail comparable sales on a quarterly basis for our retail businesses which include the combined results from our brick-and-mortar retail stores and our e-commerce sites. We also separately report the impact of e-commerce sales on our retail comparable sales metric.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Swap Agreement Sensitivity Analysis As of February 3, 2024, we had indebtedness related to term loans of $12.1 million, finance lease obligations of $15.4 million and the Mortgage Debt of $16.4 million. The term loans provide for annual interest rates ranging between 1.5% to 6.7%.
Biggest changeInterest Rate Sensitivity Analysis As of February 1, 2025, we had indebtedness related to term loans of $2.5 million and finance lease obligations of $9.8 million. The term loans provide for annual interest rates ranging between 1.5% to 5.5%. The finance lease obligations are based on fixed interest rates derived from the respective agreements.
In connection with the 2028 Notes, we also purchased convertible note hedge which did not qualify for the derivative scope exception for equity-linked instruments. These derivatives are not designated as hedging instruments for accounting purposes. Changes in fair value of these derivatives are reported in net earnings (loss) as part of other income (expense).
In connection with the 2028 Notes, we also purchased convertible note hedges which did not qualify for the derivative scope exception for equity-linked instruments. These derivatives are not designated as hedging instruments for accounting purposes. Changes in fair value of these derivatives are reported in net earnings (loss) as part of other income (expense).
Changes in fair value of foreign exchange currency contracts not designated as hedging instruments are reported in net earnings (loss) as part of other income (expense). For fiscal 2024, we recorded a net gain of $2.3 million for our euro dollar foreign currency contracts not designated as hedges, which was included in other income (expense).
Changes in fair value of foreign exchange currency contracts not designated as hedging instruments are reported in net earnings (loss) as part of other income (expense). For fiscal 2025, we recorded a net gain of $4.3 million for our euro dollar foreign currency contracts not designated as hedges, which was included in other income (expense).
Conversely, if the U.S. dollar uniformly strengthened by 10% against all of the U.S. dollar denominated foreign exchange derivatives, the fair value of these instruments would have increased by $14.2 million.
Conversely, if the U.S. dollar uniformly strengthened by 10% against all of the U.S. dollar-denominated foreign exchange derivatives, the fair value of these instruments would have increased by $23.3 million.
Foreign Exchange Currency Contracts Designated as Cash Flow Hedges During fiscal 2024, we purchased U.S. dollar forward contracts in Europe totaling $119.0 million that were designated as cash flow hedges.
Foreign Exchange Currency Contracts Designated as Cash Flow Hedges During fiscal 2025, we purchased U.S. dollar forward contracts in Europe totaling $320.0 million that were designated as cash flow hedges.
As of February 3, 2024 and January 28, 2023, the carrying value of all financial instruments was not materially different from fair value, as the interest rates on our debt approximated rates currently available to us.
As of February 1, 2025 and February 3, 2024, the carrying value of all financial instruments was not materially different from fair value, as the interest rates on our debt approximated rates currently available to us.
Contract Sensitivity Analysis As of February 3, 2024, a sensitivity analysis of changes in foreign currencies when measured against the U.S. dollar indicates that, if the U.S. dollar had uniformly weakened by 10% against all of the U.S. dollar denominated foreign exchange derivatives totaling $156.0 million, the fair value of the instruments would have decreased by $17.3 million.
Contract Sensitivity Analysis As of February 1, 2025, a sensitivity analysis of changes in foreign currencies when measured against the U.S. dollar indicates that, if the U.S. dollar had uniformly weakened by 10% against all of the U.S. dollar- denominated foreign exchange derivatives totaling $256.0 million, the fair value of the instruments would have decreased by $28.4 million.
As of February 3, 2024, we had forward contracts outstanding for our European operations of $104.0 million to hedge forecasted merchandise purchases, which are expected to mature over the next 11 months. Our derivative financial instruments are recorded in our consolidated balance sheet at fair value based on quoted market rates.
As of February 1, 2025, we had forward contracts outstanding for our European operations of $182.0 million to hedge forecasted merchandise purchases, which are expected to mature over the next 14 months. Our derivative financial instruments are recorded in our consolidated balance sheets at fair value based on quoted market rates.
As of February 3, 2024, AOCL related to foreign exchange currency contracts included a net unrealized loss of approximately $1.2 million, net of tax, of which $1.3 million will be recognized in cost of product sales over 68 Table of Contents the following 12 months, at the then current values on a pre-tax basis, which can be different than the current year-end values.
As of February 1, 2025, AOCL related to foreign exchange currency contracts included a net unrealized gain of approximately $7.3 million, net of tax, of which $4.6 million will be recognized in cost of product sales over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current year-end values.
Interest Rate Swap Agreement Designated as Cash Flow Hedge During fiscal 2017, we entered into an interest rate swap agreement with a notional amount of $21.5 million, designated as a cash flow hedge, to hedge the variability of cash flows in interest payments associated with our floating-rate debt.
Interest Rate Swap Agreement Designated as Cash Flow Hedge During fiscal 2017, we entered into an interest rate swap agreement with a notional amount of $21.5 million, designated as a cash flow hedge, to hedge the variability of cash flows in interest payments associated with the floating-rate real estate secured loan (the “Mortgage Debt”).
If the credit spread increased from 4.3% to 5.3%, keeping all other inputs constant, the fair value of the embedded derivative would increase from $16.4 million to $17.0 million and the fair value of the convertible note hedge would increase from $85.9 million to $89.3 million.
If the credit spread increased from 3.2% to 4.2%, keeping all other inputs constant, the fair value of the embedded derivative would increase from $2.5 million to $2.6 million and the fair value of the convertible note hedge would increase from $11.3 million to $11.9 million.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk. Exchange Rate Risk More than two-thirds of product sales and licensing revenue recorded for fiscal 2024 were denominated in currencies other than the U.S. dollar. Our primary exchange rate risk relates to operations in Europe, Canada, South Korea, China, Hong Kong, and Mexico.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk. Exchange Rate Risk Approximately three-quarters of product sales and licensing revenue recorded for fiscal 2025 were denominated in currencies other than the U.S. dollar. Our primary exchange rate risk relates to operations in Europe, Canada, South Korea, China, Hong Kong and Mexico. Changes in currencies affect our earnings in various ways.
Derivatives Designated as Hedging Instruments The following summarizes net after-tax activity related to our foreign exchange currency contracts and interest rate swap agreement designated as cash flow hedges recorded in AOCL (in thousands): Year Ended Feb 3, 2024 Jan 28, 2023 Beginning balance gain (loss) $ (1,584) $ 7,280 Net gains from changes in cash flow hedges 5,451 47 Net (gains) reclassified to earnings (4,411) (8,911) Ending balance loss $ (544) $ (1,584)
Derivatives Designated as Hedging Instruments The following summarizes net after-tax activity related to our foreign exchange currency contracts and interest rate swap agreement designated as cash flow hedges recorded in AOCL (in thousands): Year Ended Feb 1, 2025 Feb 3, 2024 Beginning balance loss $ (544) $ (1,584) Net gain from changes in cash flow hedges 6,853 5,451 Net (gain) loss reclassified to earnings 991 (4,411) Ending balance gain (loss) $ 7,300 $ (544) 71 Table of Contents
If the credit spread decreased from 4.3% to 3.3%, the fair value of the embedded derivative would decrease from $16.4 million to $15.7 million and the fair value of the convertible note hedge would decrease from $85.9 million to $82.3 million. Interest Rate Risk We are exposed to interest rate risk on our floating-rate debt.
If the credit spread decreased from 3.2% to 2.2%, the fair value of the embedded derivative would decrease from $2.5 million to $2.3 million and the fair value of the convertible note hedge would decrease from $11.3 million to $10.7 million. Interest Rate Risk We are exposed to interest rate risk on our floating-rate debt.
As of February 3, 2024, we had euro foreign exchange currency contracts to purchase $52.0 million expected to mature over the next 2 months. As of February 3, 2024, the net unrealized loss of these open forward contracts recorded in our consolidated balance sheet was approximately $0.3 million.
As of February 1, 2025, we had euro foreign exchange currency contracts to purchase $74.0 million expected to mature over the next 15 months. As of February 1, 2025, the net unrealized gain of these open forward contracts recorded in our consolidated balance sheets was approximately $3.0 million.
As of February 3, 2024, the net unrealized gain of the remaining open forward contracts recorded in our consolidated balance sheet was approximately $0.8 million. At January 28, 2023, we had forward contracts outstanding for our European operations of $253.0 million that were designated as cash flow hedges.
As of February 1, 2025, the net unrealized gain of the remaining open forward contracts recorded in our consolidated balance sheets was approximately $7.5 million. At February 3, 2024, we had forward contracts outstanding for our European operations of $104.0 million that were designated as cash flow hedges.
At January 28, 2023, we had euro foreign exchange currency contracts to purchase $83.5 million. At January 28, 2023, the net unrealized loss of these open forward contracts recorded in our consolidated balance sheet was approximately $2.6 million. We have recognized equity-linked derivatives including the embedded derivative associated with the Additional 2028 Notes.
At February 3, 2024, we had euro foreign exchange currency contracts to purchase $52.0 million. At February 3, 2024, the net unrealized loss of these open forward contracts recorded in our consolidated balance sheets was approximately $0.3 million. We have recognized equity-linked derivatives including the embedded derivative associated with the Additional 2028 Notes.
Risk Factors.” Various transactions that occur primarily in Europe, Canada, South Korea, China, Hong Kong and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies.
For further discussion on currency-related risk, please refer to “Part I., Item 1A. Risk Factors”. Various transactions that occur primarily in Europe, Canada, South Korea, China, Hong Kong and Mexico are denominated in U.S. dollars, British pounds and Russian roubles and thus are exposed to earnings risk as a result of exchange rate fluctuations when converted to their functional currencies.
If the expected volatility were decreased to 20%, the fair value of the embedded derivative would decrease from $16.4 million to $11.7 million and the fair value of the convertible note hedge would decrease from $85.9 million to $61.4 million.
If the expected volatility were decreased to 20%, the fair value of the embedded derivative would decrease from $2.5 million to $0.5 million and the fair value of the convertible note hedge would decrease from $11.3 million to $2.4 million.
As of February 3, 2024, if the expected volatility were increased to 40%, keeping all other inputs constant, the fair value of the embedded derivative would increase from $16.4 million to $20.9 million and the fair value of the convertible note hedge would increase from $85.9 million to $109.5 million.
As of February 1, 2025, if the expected volatility were increased to 40%, keeping all other inputs constant, the fair value of the embedded derivative would increase from $2.5 million to $5.6 million and the fair value of the convertible note hedge would increase from $11.3 million to $25.7 million.
At January 28, 2023, the net unrealized loss of these open forward contracts recorded in our consolidated balance sheet was approximately $11.9 million. Derivative Instruments Not Designated as Hedging Instruments We also have foreign exchange currency contracts that are not designated as hedging instruments for accounting purposes.
At February 3, 2024, the net unrealized gain of these open forward contracts recorded in our consolidated balance sheets was approximately $0.8 million. 69 Table of Contents Derivative Instruments Not Designated as Hedging Instruments We also have foreign exchange currency contracts that are not designated as hedging instruments for accounting purposes.
The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments 69 Table of Contents associated with our floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows.
The principal objective of these contracts is to eliminate or reduce the variability of the cash flows in interest payments associated with our floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. We have elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts.
Effective May 1, 2023, the Company amended its existing interest rate swap agreement from LIBOR to SOFR, resulting in a swap fixed rate of approximately 3.14%. This amended interest rate swap agreement matures in January 2026 and converts the nature of the Mortgage Debt from SOFR floating-rate debt to fixed-rate debt.
On May 1, 2023, we amended our existing interest rate swap agreement from LIBOR to the Secured Overnight Financing Rate (“SOFR”), resulting in a swap fixed rate of approximately 3.14%. This amended interest rate swap agreement converted the nature of the Mortgage Debt from SOFR floating-rate debt to fixed-rate debt.
We have entered into interest rate swap agreements for certain of these agreements to effectively convert our floating-rate debt to a fixed-rate basis.
From time to time, we may enter into interest rate swap agreements to effectively convert our floating-rate debt to a fixed-rate basis.
As of February 3, 2024, the net unrealized gain of the interest rate swap recorded in our consolidated balance sheet was approximately $0.8 million. At January 28, 2023, the net unrealized gain of the interest rate swap recorded in our consolidated balance sheet was approximately $1.0 million.
As of February 1, 2025, there was no related net unrealized loss or gain, net of tax, in AOCL associated with the interest rate swap agreement. At February 3, 2024, the net unrealized gain of the interest rate swap recorded in our consolidated balance sheets was approximately $0.6 million.
In January 2024, we issued $64.8 million aggregate principal amount of Additional 2028 Notes and retired approximately $67.1 million aggregate principal of 2024 Notes in a private offering, leaving approximately $48.1 million aggregate principal amount of 2024 Notes outstanding at February 3, 2024. Refer to “Part IV.
In April 2023, we issued $275 million aggregate principal amount of Initial 2028 Notes and retired approximately $184.9 million aggregate principal of 2024 Notes in a private offering. In January 2024, we issued $64.8 million aggregate principal amount of Additional 2028 Notes and retired approximately $67.1 million of 70 Table of Contents 2024 Notes in a private offering.
Financial Statements – Note 23 Subsequent Events” in this Form 10-K for disclosures about our Notes and related transactions. The fair value of the Notes and the equtiy-linked derivatives associated with the 2028 Notes are subject to interest rate risk, market risk and other factors due to the conversion feature of the Notes.
The fair value of the Notes and the equity-linked derivatives associated with the 2028 Notes are subject to interest rate risk, market risk and other factors due to the conversion feature of the Notes.
A 100 basis point increase in interest rates would not have a significant effect on interest expense for fiscal 2024. 70 Table of Contents The fair values of our debt instruments are based on the amount of future cash flows associated with each instrument discounted using our incremental borrowing rate.
The fair values of our debt instruments are based on the amount of future cash flows associated with each instrument discounted using our incremental borrowing rate.
This interest rate swap agreement matures in January 2026 and converts the nature of our real estate secured term loan from LIBOR floating-rate debt to fixed-rate debt, resulting in a swap fixed rate of approximately 3.06%.
This interest rate swap agreement converted the nature of the Mortgage Debt from the London Interbank Offered Rate (“LIBOR”) floating-rate debt to fixed-rate debt, resulting in a swap fixed rate of approximately 3.06%.
Removed
Changes in currencies affect our earnings in various ways. For further discussion on currency-related risk, please refer to our risk factors under “Part I, Item 1A.
Added
In March 2024, we issued $12.1 million principal amount of March Additional 2028 Notes in exchange for $14.6 million of 2024 Notes in a private offering. Immediately following the closing of the March 2024 transaction, $33.5 million in aggregate principal amount of the 2024 Notes remained outstanding, which were settled upon maturity in April 2024.
Removed
We have elected to apply the hedge accounting rules in accordance with authoritative guidance for certain of these contracts. In April 2023, we issued $275 million aggregate principal amount of Initial 2028 Notes and retired approximately $184.9 million aggregate principal of 2024 Notes in a private offering.
Added
In connection with the sale of our U.S. distribution center and payment of the $16.3 million remaining balance of the Mortgage Debt in fiscal 2025, we settled our interest rate swap agreement, recognizing a gain of $0.8 million.
Removed
The fair value of the interest rate swap agreement is based upon inputs corroborated by observable market data.
Added
As of February 1, 2025, we also had borrowings under our credit facility arrangements of $170.3 million which are based on variable rates of interest. Accordingly, changes in interest rates would impact our results of operations in future periods. A 100-basis point increase in interest rates would not have had a significant effect on interest expense for fiscal 2025.
Removed
Changes in the fair value of the interest rate swap agreement, designated as a cash flow hedge to hedge the variability of cash flows in interest payments associated with our floating-rate real estate secured loan (the “Mortgage Debt”), are recorded as a component of AOCL within stockholders’ equity and are amortized to interest expense over the term of the related debt.
Removed
As of February 3, 2024, AOCL related to the interest rate swap agreement included a net unrealized gain of approximately $0.6 million, net of tax, which will be recognized in interest expense over the following 12 months, at the then current values on a pre-tax basis, which can be different than the current year-end values.
Removed
The finance lease obligations are based on fixed interest rates derived from the respective agreements. Prior to May 1, 2023, the interest rate on the Mortgage Debt was a variable rate based on LIBOR. In May 2023, the Company amended the terms of the Mortgage Debt for the interest rate to be based on SOFR, effective May 1, 2023.
Removed
The Company also amended its existing interest rate swap agreement, resulting in a swap fixed rate of approximately 3.14% that matures in January 2026 (prior to this amendment, the agreement resulted in a swap fixed rate of approximately 3.06%).
Removed
The interest rate swap agreement is designated as a cash flow hedge and converts the nature of our real estate secured term loan from SOFR floating-rate debt to fixed-rate debt. As of February 3, 2024, we also had borrowings under our credit facility arrangements of $21.7 million which are based on variable rates of interest.
Removed
Accordingly, changes in interest rates would impact our results of operations in future periods.

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