Guess? Inc. recently released its 10-K report, providing an in-depth look at its operations and financial performance. The company, founded in 1981 and headquartered in Los Angeles, California, designs, markets, distributes, and licenses lifestyle collections of apparel and accessories for men, women, and children under various brand names such as GUESS, GUESS?, GUESS U.S.A., and GUESS Jeans. Guess? operates through five segments: Americas Retail, Americas Wholesale, Europe, Asia, and Licensing, selling its products through direct-to-consumer, wholesale, and licensing distribution channels, as well as through its retail websites.
In the 10-K report, Guess? Inc. highlights various risk factors that could impact its financial performance. One significant risk factor outlined in the report is foreign exchange currency exposure. The company faces exposure to earnings risk due to exchange rate fluctuations in transactions denominated in currencies such as U.S. dollars, British pounds, Russian roubles, and Swiss francs. Guess? Inc. uses derivative financial instruments, such as U.S. dollar forward contracts in Europe, to mitigate some of the exchange rate risk. The report also provides a sensitivity analysis of changes in foreign currencies against the U.S. dollar, indicating potential impacts on the fair value of the company's foreign exchange derivatives.
Another risk factor highlighted in the report is interest rate risk. Guess? Inc. is exposed to interest rate fluctuations on its floating-rate debt. The company may enter into interest rate swap agreements to convert its floating-rate debt to a fixed-rate basis, aiming to reduce the variability of cash flows in interest payments associated with its debt. The 10-K report also includes a sensitivity analysis of changes in interest rates and their potential impact on the company's results of operations.
Additionally, the report addresses the effectiveness of Guess? Inc.'s disclosure controls and procedures, as well as the assessment of the company's internal control over financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting and excluded the recently acquired business of rag & bone from its assessment for the year ended February 1, 2025, in accordance with SEC guidance.
Guess? Inc.'s 10-K report provides a comprehensive overview of the company's operations, risk factors, and financial performance, offering valuable insights for investors and stakeholders. The market has reacted to these announcements by moving the company's shares 0.5% to a price of $9.94. Check out the company's full 10-K submission here.
