Guess? Inc. (GES)
Interest coverage
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 110,540 | 245,433 | 257,304 | 254,925 | 199,302 |
| Interest expense | US$ in thousands | 30,067 | 21,816 | 21,816 | 13,190 | 13,190 |
| Interest coverage | 3.68 | 11.25 | 11.79 | 19.33 | 15.11 |
January 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $110,540K ÷ $30,067K
= 3.68
The interest coverage ratio of Guess? Inc. provides insights into the company's ability to meet its interest obligations with its earnings. Based on the data provided, there has been a fluctuation in the interest coverage ratio over the past few years.
As of January 28, 2023, the interest coverage ratio was 15.11, indicating that Guess? Inc. generated earnings 15.11 times more than its interest expenses, suggesting a strong ability to meet its interest payments.
By January 31, 2024, the interest coverage ratio had decreased to 11.79, pointing towards a slight reduction in the company's ability to cover its interest obligations comfortably.
This trend continued as of January 31, 2025, where the interest coverage ratio dropped significantly to 1.68. This sharp decline may raise concerns about Guess? Inc.'s ability to service its debt obligations with its current earnings.
Overall, the trend in Guess? Inc.'s interest coverage ratio indicates a gradual decline in its ability to cover interest expenses over the years, which may warrant further investigation into the company's financial position and debt management strategies.