Contemporary clothing brand Guess (NYSE:GES) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 5.5% year on year to $772.9 million. Its non-GAAP profit of $0.26 per share was 63.4% above analysts’ consensus estimates.
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Guess (GES) Q2 CY2025 Highlights:
- Revenue: $772.9 million vs analyst estimates of $765.1 million (5.5% year-on-year growth, 1% beat)
- Adjusted EPS: $0.26 vs analyst estimates of $0.16 (63.4% beat)
- Operating Margin: 2.3%, down from 6.5% in the same quarter last year
- Free Cash Flow Margin: 6.6%, up from 3.3% in the same quarter last year
- Market Capitalization: $877.5 million
Company Overview
Flexing the iconic upside-down triangle logo with a question mark, Guess (NYSE:GES) is a global fashion brand known for its trendy clothing, accessories, and denim wear.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Guess’s 7.9% annualized revenue growth over the last five years was sluggish. This was below our standard for the consumer discretionary sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Guess’s annualized revenue growth of 7.3% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 
This quarter, Guess reported year-on-year revenue growth of 5.5%, and its $772.9 million of revenue exceeded Wall Street’s estimates by 1%.
Looking ahead, sell-side analysts expect revenue to grow 5% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Guess’s operating margin has shrunk over the last 12 months and averaged 6% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.
In Q2, Guess generated an operating margin profit margin of 2.3%, down 4.2 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Guess’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.
In Q2, Guess reported adjusted EPS of $0.26, down from $0.42 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Guess’s full-year EPS of $1.64 to shrink by 11.8%.
Key Takeaways from Guess’s Q2 Results
It was good to see Guess beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $16.78 immediately after reporting.
Is Guess an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.