G-III Apparel Group, Ltd. reported net sales of $18.7 million for the three-month period ended April 30, 2003 compared to net sales of $12.7 million in the year-ago quarter. The company posted a net loss of $2.6 million, or $0.38 per share, for Q1 compared to a net loss of $4.2 million, or $0.62 per share, during the comparable period last year.
Morris Goldfarb, G-III’s Chief Executive Officer, said, “We are pleased that we have begun the new fiscal year at a strong pace for what is traditionally our weakest quarter of the year. Our sports apparel business continues to expand both in product depth and management expertise. We have added quality personnel in design, sourcing, sales and customer service to support its continued growing retail distribution.”
The Company noted that the growth in revenue and improvement in gross profit percentage were primarily the result of increased shipments of sports apparel, the absence of losses incurred in last year’s quarter relating to the Indonesian facility that was closed by the Company in the fourth quarter of fiscal 2003 and a reduction in clearance activity compared to the prior year’s quarter. Additionally, due to the closing of the Company’s manufacturing facility in Indonesia and related transition to additional third-party manufacturing, the Company benefited from a reduced need for raw material and work in process inventories, resulting in a decrease in overall inventories to $31.2 million as of April 30, 2003 from $40.5 million as of April 30, 2002. The Company expects that results of operations for the balance of the fiscal year will be favorably impacted by the elimination of the losses associated with operating the Indonesian facility.
Mr. Goldfarb continued, “We are excited about the year ahead. While it remains somewhat early to forecast our earnings for the full fiscal year, we anticipate a good fall season. G-III is becoming a stronger, more flexible company. We believe we have an excellent opportunity to take our business to higher levels of profitability and we look forward to capitalizing on the opportunities ahead of us.”
For the second quarter ending July 31, 2003, the Company is forecasting net sales of approximately $44.0 million and diluted earnings per share between $0.10 and $0.12. In last year’s second quarter, net sales were $40.0 million and diluted earnings per share were $0.08.
(in thousands, except share and per share amounts)
(Unaudited)
First Quarter Ended
April 30,
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(Unaudited)
2003 2002
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Net sales $ 18,712 $ 12,691
Cost of sales 14,358 11,788
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Gross profit 4,354 903
Selling, general and administrative expenses 8,759 7,514
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Operating loss (4,405) (6,611)
Interest and financing charges, net 48 125
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Loss before income taxes (4,453) (6,736)
Income tax benefit (1,826) (2,567)
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Net loss $ (2,627)$ (4,169)
