G-III Apparel Group Ltd. posted better-than-expected earnings on Wednesday, beating Wall Street estimates, as strong growth in its wholesale business helped boost second-quarter sales.
The New York-based company, which makes licensed apparel for brands such as Calvin Klein and Kenneth Cole, reported a profit for the quarter ended July 31 of $12.5 million, or $0.27 per diluted share, up from $6.2 million in the year-ago period.
Net sales rose 12 percent to a record $474 million from $424 million in Q2 2014, which Morris Goldfarb, G-III’s chairman, CEO and president, said came from “excellent wholesale performance in a number of important categories and a 24 percent improvement in comparable store sales at G.H. Bass & Co.”
The company has seen its results boosted in recent quarters by its November 2013 acquisition of Bass and Goldfarb revealed the brand’s income more than doubled in the second quarter.
On the wholesale side, G-III’s department store business continued to be its strongest channel—bookings for the quarter climbed 22 percent—with Calvin Klein leading the charge, particularly in the dresses category. Goldfarb noted, “We ended the first half of the year with clean inventory and we’re looking good for the fall.”
Eliza J, an owned brand, was described as the No. 1 selling dress brand at Nordstrom, while Vince Camuto licensed dresses logged strong sales gains. Goldfarb mentioned that these businesses are growing at a better than 50 percent annual rate.
Meanwhile, Ivanka Trump, for which G-III holds the license for sportswear, dresses, suits and suit separates (among others) in the U.S., Canada and Mexico, is expected to nearly double its income this year. “We continue to think this, at a minimum, is going to be a $100 million brand for us,” Goldfarb said.
And G-III has great expectations for the Karl Lagerfeld line. The company inked a joint venture with the designer’s parent company in June, receiving a five-year license for women’s clothing and handbags and men’s outerwear, and Goldfarb put the opportunity at “well in excess of half a billion dollars.”
For the fiscal year ending Jan. 31, G-III forecasts revenue of roughly $2.4 billion and earnings of $2.78 to $2.88 per diluted share, compared to previous guidance of per-share earnings between $2.66 and $2.76.
Goldfarb concluded, “We are excited to move into the fall and holiday seasons with a strong order book, good sell-through and improved profitability. We believe that our combination of market leading brands, great product and world class execution provide an ongoing opportunity to enhance our leadership position and drive superior value to our shareholders, customers and partners.”