With sales slashed more than half in Q2, G-III plans to focus on casual products such as athleisure, jeans, a comfortable sportswear and coats.
In a Nutshell: G-III Apparel Group, in announced operating results for the second quarter ended July 31, said it expects net sales to decline 28 percent to 33 percent in the second half compared to the same period last year.
The company, which designs, sources and markets apparel and accessories under owned brands that include DKNY, Donna Karan, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc and Marc New York, said as the developments associated with the Covid-19 pandemic continue to be fluid and there is significant uncertainty related to its impact, it is not providing additional guidance.
Sales: Net sales for the second quarter ended July 31 declined 53.8 percent to $297.2 million from $643.9 million in the same period last year.
Earnings: The company, which also has fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess, Vince Camuto, Levi’s and Dockers brands, reported a net loss for the second quarter of $15 million, or 31 cents per per share compared to net income of $11.1 million, or 23 per diluted share, in the prior year’s comparable period.
Included in the net loss were net losses from the Wilsons Leather and G.H. Bass operations of $25.6 million compared to net losses of $6.3 million in the prior-year period. The results for the current period include the impact of the pandemic and the commencement of the liquidation of the Wilsons Leather and G.H. Bass stores.
CEO’s Take: Morris Goldfarb, chairman and CEO said: “The pandemic has had a major impact on the fashion industry and our second quarter results. Our customers now prefer casual, comfortable and functional attire. Through our broad range of brands and product categories, G-III is able to capitalize on these changing trends. We have reset our order book for the balance of the year and shifted our product assortment to athleisure, jeans, casual sportswear and coats.”
“We refinanced our balance sheet and extended the maturity of our revolving credit facility and term debt to 2025,” Goldfarb added. “In addition, the closure of Wilsons Leather and G.H. Bass stores, expected to be completed by the end of this fiscal year, will result in the elimination of significant operating losses. I am confident that as we navigate through the pandemic, our financial strength and dedicated management team will further advance our leadership position and set the stage for future market share gains.”