Saying Tariff Costs are Under Control, G-III Revises Forecast Upward (AF)
G-III posted solid gains in the third quarter and said it’s been able to mitigate some of the impact of tariffs on Chinese imports, so far.
In a Nutshell: G-III Apparel Group Ltd., with owned brands that include DKNY, Donna Karan, Vilebrequin, G. H. Bass, Eliza J, Jessica Howard, Andrew Marc and Marc New York, issued revised upward guidance for the fiscal year ending Jan. 31.
The company said its forecast incorporates the expected impact of the additional tariffs implemented effective Sept. 1. G-III noted that it has worked with its Chinese suppliers to limit some of the impact of the tariffs.
For fiscal 2020, the company is now forecasting net sales of approximately $3.20 billion and net income between $147 million and $152 million, or between $3.01 and $3.11 per diluted share. This compares to net sales of $3.08 billion and net income of $138.1 million, or $2.75 per diluted share for fiscal 2019.
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, is now projecting full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal 2020 between $283 million and $288 million compared to adjusted EBITDA of $269.4 million in fiscal 2019.
Sales: Net sales for the third quarter ended Oct. 31 increased 5.2 percent to $1.13 billion from $1.07 billion in the same period last year. Net sales for the wholesale segment rose 6.2 percent in the period to $1.07 billion.
Earnings: Net income for the quarter rose 1.49 percent to $95.4 million from $94 million in the prior-year period. The company’s operating profit grew 2 percent to $142. 86 million.
CEO’s Take: Morris Goldfarb, chairman and CEO, said: “We are pleased to report third-quarter results that exceeded our bottom-line expectations. We maintained good momentum in our wholesale business, in spite of the challenging retail and macro environment. Our merchants did a good job managing product costs, as we benefitted from accelerated inventory receipts and support from our Chinese vendor base to mitigate some of the impact of the tariffs that were imposed.”
Goldfarb added, “We remain focused on continuing to grow our business in multiple categories and elevating our position as a supplier of choice for our retail partners. We remain confident in our future growth expectations, powered by the strength of our global power brands DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld.”