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DKNY Owner Boosts Q4 Income

G-III’s net income for the fourth quarter more than tripled to $48.4 million, as net sales rose 42 percent to $748.2 billion.

In a Nutshell: G-III Apparel Group, with a portfolio of more than 30 licensed and proprietary labels anchored by five “global power brands”–DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris–issued guidance Thursday for the fiscal year ending Jan. 31, 2023, that “contemplates an expected impact from the current supply chain conditions, including increased shipping costs and delays in receipt of goods.”

For fiscal 2023, G-III expects net sales of approximately $3 billion and net income between $205 million and $215 million, or $4.20 to $4.30 per diluted share. This compares to net sales of $2.77 billion and net income of $200.6 million, or $4.05 per diluted share, in the 2022 fiscal year ended Jan. 31.

For the first quarter, G-III forecast net sales of about $600 million compared to $519.9 million in the prior-year period. Net income for the first quarter is expected to be in the range $25 million and $30 million, or 50 cents to 60 cents per diluted share. This compares to net income of $26.3 million or 53 cents per diluted share in last year’s first quarter.

G-III noted that it has no direct operations in Russia or Ukraine and exposure from sales to this area is expected to have an immaterial impact on the financial results of fiscal year 2023.

During the fiscal year, the company completed the restructuring of its retail operations segment and closed its Wilsons Leather and G.H. Bass stores.

Sales: Net sales for the fourth quarter ended Jan. 31 rose 42 percent to $748.2 billion from $526.2 million in the fourth quarter of the prior year.

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For the year, net sales increased 35 percent to $2.77 billion from $2.06 billion in the prior year.

Earnings: Net income for the quarter more than tripled to $48.4 million, or 98 cents per diluted share, compared to net income of $14.6 million, or 30 cents per diluted share, in the prior-year period. Included in the results were net losses from the Wilsons Leather and G.H. Bass store operations of $8.6 million, or 17 cents per diluted share.

For the year, G-III reported net income for the year of $200.6 million, or $4.05 per diluted share, compared to $23.5 million, or 48 cents per diluted share, in the prior year. Included in these results are net losses from the Wilsons Leather and G.H. Bass store operations of $55.7 million, or $1.14 per diluted share.

CEO’s Take: Morris Goldfarb, chairman and CEO, said: “Fiscal year 2022 was a testament to the power of G-III. We continued to build upon our strong foundation and delivered our highest annual net income per diluted share in our company’s history. We captured market share by anticipating demand and working with retail partners, despite the significant supply chain challenges. We are in a strong financial position affording us the flexibility to continue to invest in our future.”

“Looking ahead, we are optimistic about the momentum of our business and the many opportunities for growth, which gives us confidence in our outlook for the upcoming fiscal year 2023,” Goldfarb added. “Our ability to unlock the potential of our brands will continue to fuel our growth and further elevate our position as a leader in fashion.”