Earnings (Loss) per Share

9 Months Ended

Oct. 30, 2021

Earnings (Loss) per ShareThe Company expects to settle the principal amount of its outstanding convertible senior notes in cash and any excess in shares. As a result, upon conversion of the convertible senior notes, only the amounts in excess of the principal amount are considered in diluted earnings per share under the treasury stock method, if applicable. See Note 10 for more information regarding the Company’s convertible senior notes.

In addition, the Company has granted certain nonvested stock units that are subject to certain performance-based or market-based vesting conditions as well as continued service requirements through the respective vesting periods. These nonvested stock units are included in the computation of diluted net earnings per common share attributable to common stockholders only to the extent that the underlying performance-based or market-based vesting conditions are satisfied as of the end of the reporting period, or would be considered satisfied if the end of the reporting period was the end of the related contingency period, and the results would be dilutive under the treasury stock method.

The computation of basic and diluted net earnings (loss) per common share attributable to common stockholders is (in thousands, except per share data):


	Three Months Ended				Nine Months Ended
	Oct 30, 2021		Oct 31, 2020		Oct 30, 2021		Oct 31, 2020
Net earnings (loss) attributable to Guess?, Inc.	$	29,880	$	26,376	$	102,948	$	(151,648)
Less net earnings attributable to nonvested restricted stockholders	336		340		1,116		93
Net earnings (loss) attributable to common stockholders	$	29,544	$	26,036	$	101,832	$	(151,741)

Weighted average common shares used in basic computations	64,373		62,789		64,248		64,561

Effect of dilutive securities: Stock options, convertible senior notes and restricted stock units1	1,479		790		1,645		—
Weighted average common shares used in diluted computations	65,852		63,579		65,893		64,561

Net earnings (loss) per common share attributable to common stockholders:
Basic	$	0.46	$	0.41	$	1.58	$	(2.35)
Diluted	$	0.45	$	0.41	$	1.55	$	(2.35)

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Notes:

1For the nine months ended October 31, 2020, there were 397,099 of potentially dilutive shares that were not included in the computation of diluted weighted average common shares and common equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss.

During the three months ended October 30, 2021 and October 31, 2020, equity awards granted for 1,341,973 and 3,610,026, respectively, of the Company’s common shares and for the nine months ended October 30, 2021 and October 31, 2020, equity awards granted for 475,584 and 3,792,552, respectively, of the Company’s common shares were outstanding but were excluded from the computation of diluted weighted average common shares and common equivalent shares outstanding because the assumed proceeds, as calculated under the treasury stock method, resulted in these awards being antidilutive. For the three and nine months ended October 30, 2021, there were 465,590 nonvested stock units which are subject to the achievement of market-based vesting conditions that were excluded from the computation of diluted weighted average common shares and common equivalent shares outstanding as the respective conditions were not achieved as of October 30, 2021. For the three and nine months ended October 31, 2020, the Company excluded 525,875 nonvested stock units which were subject to the achievement of performance-based vesting conditions from the computation of diluted weighted average common shares and common equivalent shares outstanding because these conditions were not achieved as of October 31, 2020.

The conversion spread on the Company’s convertible senior notes has a dilutive impact on diluted earnings per share when the average market price of the Company’s common stock for a given period exceeds the initial conversion price of $25.78 per share of common stock, subject to adjustment upon the occurrence of certain events.

Warrants to initially purchase 11.6 million shares of the Company’s common shares at an initial strike price of $46.88 per share were outstanding as of October 30, 2021 and October 31, 2020. These warrants were excluded from the computation of diluted earnings per share since the warrants’ adjusted strike price was greater than the average market price of the Company’s common stock during the three and nine months ended October 30, 2021 and October 31, 2020.