G-III Apparel Group, Ltd. said net sales for the three months ended Oct. 31, 2008 increased by 29.6% to $351.6 million from $271.2 million in the same quarter of last year. Net income for the three months was $28.8 million, or $1.68 per diluted share, compared to $23.8 million, or $1.41 per diluted share, in the prior years period.
For the nine months ended Oct. 31, 2008, net sales increased by 38.5% to $540.5 million from $390.2 million in the same period last year. Net income for the nine months ended Oct. 31, 2008 was $18.1 million, or $1.07 per diluted share, compared to $16.4 million, or $0.99 per diluted share, in the same period last year.
“Our third quarter results represent a solid performance given the conditions in the market,” said Morris Goldfarb, chairman and CEO. “Calvin Klein, which is our largest and fastest growing business, continues to exceed plan and is particularly well suited to address the current market environment with a strong fashion identity and an excellent price-value proposition for consumers. We are excited about the initial reception to our new Calvin Klein sportswear line which will start to ship this spring season.”
Mr. Goldfarb continued, “Retailers have been slower to reorder and we expect to see a higher level of promotional activity in the fourth quarter, particularly in the luxury tier. Additionally, traffic and comparable store sales results are lower than we had planned in our recently acquired Wilsons outlet business. Accordingly, we are revising our full years guidance down. We believe our strategy of diversifying our product offerings, broadening our distribution channels and offering a wide variety of brands to consumers will help us weather the difficult retail and consumer environment we are currently facing.”
“G-III is a proactive and forward-thinking organization with a great deal of talent that has demonstrated the ability to succeed even in difficult markets. The kind of market we are in can prompt significant changes in the competitive landscape. We believe that G-III will ultimately benefit from these changes, including the ongoing consolidation of retailers, competitors and suppliers, in the form of increased market share and a wide availability of business opportunities,” Mr. Goldfarb concluded.
Outlook
For the full fiscal year ending Jan. 31, 2009, the company revised its guidance and now expects net sales of approximately $715 million, compared to its prior guidance of net sales of $730 million, net income in the range of $16.3 million to $18.1 million, compared to its prior guidance of net income in the range of $23.5 million to $24.4 million, and diluted net income per share between $0.95 and $1.05, compared to its prior guidance of diluted net income per share between $1.35 to $1.40.
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES (NASDAQGSM:GIII) CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
10/31/08 | 10/31/07 | 10/31/08 | 10/31/07 | |||||||||
| Net sales | $ | 351,599 | $ | 271,195 | $ | 540,458 | $ | 390,192 | ||||
| Cost of sales | 239,080 | 190,932 | 381,520 | 280,660 | ||||||||
| Gross profit | 112,519 | 80,263 | 158,938 | 109,532 | ||||||||
Selling general and administrative expenses | 58,937 | 36,470 | 118,625 | 75,019 | ||||||||
| Depreciation and amortization | 1,900 | 1,294 | 5,255 | 4,135 | ||||||||
| Operating profit | 51,682 | 42,499 | 35,058 | 30,378 | ||||||||
| Interest and financing charges, net | 2,496 | 1,892 | 4,161 | 2,304 | ||||||||
| Income before income taxes | 49,186 | 40,607 | 30,897 | 28,074 | ||||||||
| Income tax expense | 20,350 | 16,852 | 12,801 | 11,651 | ||||||||
| Net income | $ | 28,836 | $ | 23,755 | $ | 18,096 | $ | 16,423 | ||||
| Basic net income per common share | $ | 1.74 | $ | 1.45 | $ | 1.10 | $ | 1.03 | ||||
| Diluted net income per common share | $ | 1.68 | $ | 1.41 | $ | 1.07 | $ | 0.99 | ||||
