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G-III Back in the Black in First Half, Raises Profit and Sales Outlook

Lifted by its “power brands,” G-III Apparel Group turned losses into gains in the second quarter and first half of this year.

In a Nutshell: G-III Apparel Group Ltd., with owned brands DKNY, Donna Karan, Vilebrequin, G. H. Bass, Andrew Marc, Marc New York, Eliza J and Jessica Howard, put up strong numbers in the second quarter and boosted its full-year outlook.

G-III, 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, increased its prior guidance for the full fiscal year ending Jan. 31 and said it now expects net sales of roughly $3.06 billion, and net income between $125 million and $130 million. This compares to previous forecasted net sales of $2.97 billion and net income between $112 million and $117 million. In fiscal 2018, G-III had net sales of $2.81 billion and net income of $62.1 million.

The company is projecting full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal 2019 between $250 million and $260 million compared to its previous forecast of adjusted EBITDA between $236 million and $246 million. In fiscal 2018, this company had adjusted EBITDA of $201.3 million in fiscal 2018.

Sales: G-III generated a 16.1% net sales increase for the three months ended July 31 to a second quarter record $624.7 million compared to $538 million in the year-ago period. This also includes sales from licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League and about 150 U.S. colleges and universities.

In the six months, the company reported net sales increased to $1.24 billion from $1.07 billion in the year-ago period.

Earnings: The company reported net income for the second quarter of $10.1 million compared to a net loss of $8.6 million in the prior-year period. For the six months, net income was $19.96 million compared to a loss of $18.96 million in the year-ago first half.

CEO’s Take: Morris Goldfarb, chairman and CEO, said, “We are pleased to report second quarter results that exceeded our expectations. Our out-performance was driven by excellent results across our wholesale businesses. We are successfully leveraging our five global power brands to deliver market relevant product that resonates with today’s consumers. We have a world class portfolio of owned and licensed brands that we believe position us for long-term growth in sales and earnings.”

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