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G-III Raises Fiscal Year Sales and Income Guidance

G-III, with more than 30 licensed and proprietary brands, scored significant sales and income gains in the third quarter.

In a Nutshell: G-III Apparel Group Ltd., with a portfolio of anchored by five global power brands–DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris–on Wednesday raised its guidance for the fiscal year ending Jan. 31.

As the developments associated with the Covid-19 pandemic continue to be fluid, the company’s fiscal year 2022 guidance contemplates the expected impact from the current supply chain conditions, including expected increased shipping costs and delays in receipt of goods. However, the guidance does not contemplate any reimposition of government-mandated store closures or other governmental restrictions as a result of the pandemic and concerning new coronavirus variants such as omicron.

For fiscal 2022, G-III expects net sales, including for owned brands such as DKNY, Donna Karan, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York and Sonia Rykiel, of approximately $2.77 billion and net income between $180 million and $190 million, or between $3.65 and $3.75 per diluted share. The company previously forecast net sales of approximately $2.7 billion and net income between $155 million and $165 million, or between $3.10 and $3.20 per diluted share.

This compares to net sales of $2.06 billion and net income of $23.5 million, or 48 cents per diluted share, last year. Last fiscal year’s results included net sales of $91.8 million and a net loss of $1.14 per diluted share associated with the Wilsons Leather and G.H. Bass store operations.

Sales: Net sales, including for fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess, Vince Camuto, Levi’s and Dockers brands, for the third quarter ended Oct. 31 increased 22.8 percent to $1.02 billion from $826.6 million in the prior year’s quarter.

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Earnings: Net income for the third quarter rose 68.9 percent to $106.7 million, or $2.16 per diluted share, compared to $63.2 million, or $1.29 per diluted share, in the prior year’s quarter.

The company completed the restructuring of its retail operations segment during fiscal 2021 and closed its Wilsons Leather and G.H. Bass stores. Included in results for the third quarter of last year are net losses from the Wilsons Leather and G.H. Bass store operations of $12 million, or 25 cents per diluted share.

G-III’s still distributes directly to consumers through its DKNY, Karl Lagerfeld Paris and Vilebrequin stores and its digital channels for the DKNY, Donna Karan, Vilebrequin, Karl Lagerfeld Paris, Andrew Marc, Wilsons Leather and G.H. Bass brands.

CEO’s Take: Morris Goldfarb, G-III’s chairman and CEO, said: “The strong momentum in our business in the first half continues, as we delivered outstanding third quarter results with both top and bottom line exceeding our guidance. Given the strong demand we are seeing across our brands, we are well positioned for the holiday season. We are raising our full year guidance and expect to deliver our highest annual earnings in our company’s history.”