G-III Apparel Group, Ltd. withdrew its earnings guidance due to “uncertainty around tariffs and related macroeconomic conditions” while also reporting earnings and sales exceeded targets due to double-digit growth at DKNY, Karl Lagerfeld and Donna Karan.

G-III also owns Vilebrequin and makes product under licenses including Calvin Klein, Tommy Hilfiger, Nautica, Halston, Converse and BCBG. The G-III Sports division offers sports fan apparel under league licenses under brands such as Starter, DKNY Sport, G-III for Her, Margaritaville, MSX By Michael Strahan, Tommy Hilfiger, and Tommy Jeans.

Morris Goldfarb, G-III’s chairman and chief executive officer, said, “G-III delivered solid first quarter results, marked by earnings that exceeded the high end of guidance. Our performance was fueled by double-digit growth of our key owned brands, DKNY, Karl Lagerfeld and Donna Karan, which largely offset the exit of the Calvin Klein jeans and sportswear businesses. These results underscore the strong demand and desirability of our brand portfolio and are a testament to our team’s outstanding execution.”

Goldfarb concluded, “We are reaffirming our net sales guidance for fiscal 2026 and working diligently to mitigate the impact of tariffs. Our experienced management team has a proven track record of successfully navigating periods of uncertainty, and we view the ongoing disruptions as an opportunity to strengthen our competitive position and capture incremental market share. As we advance our strategic priorities, we have never been more confident in the global resonance of our brands and the significant growth potential ahead to drive long-term profitability and shareholder value.”

Results of Operations

First Quarter Fiscal 2026

  • Net sales for the first quarter ended April 30, 2025 decreased 4 percent to $583.6 million compared to $609.7 million in the prior year’s quarter. Sales topped guidance that called for sales of approximately $580.0 million.
  • Net income for the first quarter ended April 30, 2025 was $7.8 million, or 17 cents per diluted share, compared to $5.8 million, or 12 cents per diluted share, in the prior year’s quarter.
  • Non-GAAP net income per diluted share was 19 cents for the first quarter ended April 30, 2025 compared to $0.12 in the same period last year. Earnings topped guidance calling ffor earnings in the range of 5 cents to 15 cents.
  • Non-GAAP net income per diluted share in the first quarter of fiscal 2026 excludes $1.0 million in one-time severance expenses related to a closed warehouse. There were no non-GAAP adjustments during the first quarter of fiscal 2025. The effect of this exclusion was equal to $0.02 per diluted share in the first quarter of this year.

Balance Sheet as of First Quarter Fiscal 2026

  • Inventories decreased 5 percent to $456.5 million this year compared to $479.7 million last year.
  • Total debt decreased 96 percent to $18.7 million this year compared to $426.4 million last year. In August 2024, we voluntarily redeemed the entire $400.0 million principal amount of our senior secured notes (the “Notes”) at a redemption price equal to 100 percent of the principal amount of the Notes plus accrued and unpaid interest. The payment was made with cash on hand and borrowings from the revolving credit facility.

Capital Allocation

  • Share repurchases of 807,437 for $19.7 million were made in the first quarter ended April 30, 2025.

Outlook

The company has reaffirmed its net sales outlook for fiscal 2026. Due to uncertainty around tariffs and related macroeconomic conditions, the company has withdrawn its net income, non-GAAP net income and adjusted EBITDA guidance for fiscal 2026 issued on March 13, 2025. Based on the tariff rates in place on June 5, 2025, the company anticipates the unmitigated cost of tariffs on goods imported into the United States will result in additional expense of approximately $135.0 million, which is expected to primarily be weighted to the second half of the year. The company is diligently working to offset these costs through (i) diversifying our sourcing mix and vendor discounts, (ii) selective price increases and (iii) other cost saving initiatives.

Fiscal 2026

Net sales are still expected to be approximately $3.14 billion. This compares to net sales of $3.18 billion for fiscal 2025. As previously planned, the company continues to expect sales in the first half of fiscal 2026 to be lower as compared to the previous year, with acceleration expected in the second half of fiscal 2026.

Second Quarter Fiscal 2026

Net sales for the second quarter of fiscal 2026 are expected to be approximately $570.0 million. Net sales are expected to be negatively impacted by supply chain challenges and timing shifts in certain programs into the second half of this year. This compares to net sales of $644.8 million in last year’s second quarter. Gross margins are expected to be comparable to the prior year’s second quarter.

Net income for the second quarter of fiscal 2026 is expected to be between $1.0 million and $6.0 million, or diluted earnings per share between $0.02 and $0.12. This compares to net income of $24.2 million, or $0.53 per diluted share, in last year’s second quarter.