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G-III Reports 28% Growth in Q1 Sales

G-III Apparel Group turned to the black in the first quarter as sales jumped 28.3 percent to $519.9 million.

In a Nutshell: G-III Apparel Group Ltd., while announcing operating results for the first quarter, issued guidance for the fiscal year ending Jan. 31, 2022, forecasting net sales of approximately $2.57 billion compared to $2.06 billion in the year-earlier period. Last fiscal year’s net sales included $91.8 million from the now-closed Wilsons Leather and G.H. Bass stores.

Net income for 2022 for G-III, with a portfolio of more than 30 licensed and proprietary brands anchored by its five “power brands”–DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris–is expected to be between $125 million and $135 million, or $2.60 to $2.70 per diluted share. This compares to net income of $23.5 million, or 48 cents per diluted share, last year. The results last year included a net loss per diluted share of $1.14 associated with the Wilsons Leather and G.H. Bass store operations.

For the second quarter of the current fiscal year, G-III said it expects net sales of about $460 million, which compares to $297.2 million in the same period last year. Last year’s net sales for the second quarter included $19.7 million from the Wilsons Leather and G.H. Bass stores.

Net income for the second quarter of fiscal year 2022 is expected to be in the range of 3 cents to 13 cents per diluted share. This compares to a net loss of 31 cents per share in last year’s second quarter, which included a net loss per share of 53 cents associated with the Wilsons Leather and G.H. Bass store operations.

The company, which in addition to DKNY and Donna Karan, also owns the Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc and Marc New York brands, said as the developments associated with the COVID-19 pandemic continue to be fluid, its fiscal year 2022 guidance does not contemplate any reimposition of government-mandated store closures or other governmental restrictions that were previously imposed as a result of the COVID-19 pandemic, which could have a material impact on net sales, results of operations and supply chain during fiscal 2022.

For fiscal 2022, the company completed the restructuring of its retail operations segment and has closed the Wilsons Leather and G.H. Bass stores. Included in results for the first quarter of last year are net losses from the Wilsons Leather and G.H. Bass store operations of $15 million.

Sales: Net sales for the first quarter ended April 30 for G-III, which in addition to Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris, also has licensed brands for Kenneth Cole, Cole Haan, Guess, Vince Camuto, Levi’s, Dockers and four major professional sports leagues, rose 28.3 percent to $519.9 million from $405.1 million in the prior year’s quarter.

Earnings: G-III reported net income for the first quarter of $26.3 million, or 53 cents per diluted share, compared to a net loss of $39.3 million, or 82 cents per share, in the prior-year period. The operating profit in the quarter was $46.82 million compared to a net loss of $43.27 million in the same period a year earlier.

CEO’s Take: G-III chairman and CEO Morris Goldfarb said: “We were pleased with our strong out-performance in the first quarter of this fiscal year. With each passing week, sales for broader lifestyle apparel, such as sportswear, wear-to-work attire and dresses, are accelerating and our overall business in North America is getting stronger. We believe these trends provide a good indication for the remainder of the year and give us confidence that we and our industry are well on our way to recovery. We believe we are well positioned to capitalize on consumer demand as the year progresses and are optimistic about this fiscal year.”

“Reflecting upon the last year and the difficult challenges posed by the global pandemic, it is impressive to see how effectively we navigated through this period, demonstrating the power and diversification of G-III’s business to adapt and succeed in any environment,” Goldfarb added. “As the world reopens, we are in a strong financial position, which we believe will allow us to fund our growth domestically and internationally and enable us to take advantage of opportunities that arise.”

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