Guess?, Inc. Board Authorizes New $200 Million Share Repurchase Program

Rhea-AI Summary

Guess?, Inc. (GES) announces a new $200 million share repurchase program, including a $10.3 million repurchase through a convertible bond exchange. CEO Carlos Alberini emphasizes the company's commitment to enhancing shareholder returns and confidence in its business.

Insights

Financial Analyst

The announcement by Guess?, Inc. of a new $200 million share repurchase program represents a significant capital allocation decision that can have multiple effects on the company's financial health and stock performance. Share repurchases are often perceived positively in the market as they can indicate management's belief in the company's undervaluation or a commitment to increasing shareholder value. By reducing the number of shares outstanding, earnings per share (EPS) may increase, potentially boosting the stock price.

However, the decision to repurchase shares should be weighed against other potential uses of capital, such as investment in growth opportunities or debt reduction. In this case, Guess? has also recently announced a special dividend, suggesting a strategy focused on direct shareholder returns. Investors should monitor the company's financials to ensure that these buybacks do not come at the expense of long-term growth or financial stability, particularly in the context of the company's cash flow generation and debt levels.

Market Research Analyst

The retail industry is highly competitive and subject to consumer demand fluctuations. Guess?'s share repurchase program could signal to the market that the company is confident in its competitive positioning and financial outlook. By repurchasing shares, Guess? may be aiming to convey a message of strength and stability to its investors and competitors.

From a market sentiment perspective, such buyback programs can often lead to a positive short-term reaction as they can be interpreted as a sign of self-assurance from the company's management. However, the long-term impact will largely depend on the execution of the company's overall growth strategy and its ability to adapt to market trends, such as e-commerce expansion and changes in consumer behavior.

Corporate Governance Advisor

Share repurchase programs must be scrutinized in the context of corporate governance. The board's decision to allocate a substantial amount of capital to buy back shares raises questions about the broader strategic implications for the company's governance. It is essential that such decisions are aligned with the long-term interests of all shareholders and not just short-term stock price appreciation.

Investors should consider the transparency and rationale provided by the board for this program, especially in relation to the company's growth initiatives and capital structure. The balance between rewarding shareholders and reinvesting in the business is a delicate one and the board's actions should ideally reflect a strategy that supports sustainable growth while also delivering shareholder value.

LOS ANGELES--(BUSINESS WIRE)-- Guess?, Inc. (NYSE: GES) (the “Company”) today announced that its Board of Directors has authorized a new share repurchase program of up to $200 million of the Company’s common stock. Guess? also separately announced today that, as part of this new program and through a convertible bond exchange transaction, it has agreed to repurchase 326,429 shares of the Company’s common stock for $10.3 million.

Carlos Alberini, Chief Executive Officer, commented, “Returning capital directly to our shareholders is a high priority for our Board. This $200 million share repurchase authorization and the more than $10 million repurchase we have announced today reflects our confidence in the business and follows our recently announced special dividend of $2.25 per share which will be paid in early May. We remain committed to enhancing shareholder returns and have a strong capital structure, solid cash flow generation, a powerful and diversified business model and a unique platform to support our Company’s growth initiatives.”

Share repurchases under the authorization 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.

About Guess?, Inc.

Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, eyewear, footwear and other related consumer products. Guess? products are distributed through branded Guess? stores as well as better department and specialty stores around the world. As of February 3, 2024, the Company directly operated 1,002 retail stores in Europe, the Americas and Asia. The Company’s partners operated 551 additional retail stores worldwide. As of February 3, 2024, the Company and its partners and distributors operated in approximately 100 countries worldwide.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240331968740/en/

Guess?, Inc.

Fabrice Benarouche

Senior Vice President of Finance and Investor Relations and

Chief Accounting Officer

(213) 765-5578

Source: Guess?, Inc.

FAQ

What is the ticker symbol of Guess?, Inc.?

The ticker symbol of Guess?, Inc. is GES.

How much is the new share repurchase program authorized for?

The new share repurchase program is authorized for up to $200 million.

Who is the Chief Executive Officer of Guess?, Inc.?

The Chief Executive Officer of Guess?, Inc. is Carlos Alberini.

What is the amount of shares repurchased for $10.3 million through the convertible bond exchange?

Guess?, Inc. repurchased 326,429 shares of common stock for $10.3 million.

When will the special dividend of $2.25 per share be paid?

The special dividend of $2.25 per share will be paid in early May.

How can share repurchases be made under the authorization?

Share repurchases under the authorization may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means.

Is there a minimum or maximum number of shares to be repurchased under the program?

There is no minimum or maximum number of shares to be repurchased under the program.

Can the share repurchase program be discontinued at any time?

Yes, the share repurchase program may be discontinued at any time, without prior notice.