G-III Apparel Group, Ltd. posted a loss in the first quarter ended April as sales declined 8 percent due to the termination of its Calvin Klein and Tommy Hilfiger wholesale licenses. However, results exceeded plan, and G-III raised its earnings guidance for the year.

G-III’s owned brands include Andrew Marc, DKNY, Vilebrequin, Sonia Rykiel, G.H. Bass, Wilsons Leather, Eliza and Jessica Howard, while its licensed properties include Converse, Nautica, Champion, Levi’s, Dockers, Starter, Cole Hahn, and BCBG. The company’s G-III Sports division manufactures licensed sports apparel and lifestyle fashion.

Morris Goldfarb, G-III’s chairman and chief executive officer, said, “I am very pleased with our first quarter results, which demonstrate the G-III team’s ability to execute in a dynamic environment. The quarter was better than expected, with both our net sales and earnings coming in ahead of guidance. Our go-forward portfolio saw continued momentum and healthy full-price selling, which contributed to meaningful gross margin expansion versus the prior year. Based on our strong first quarter results, we are raising our earnings guidance for fiscal 2027.”

Goldfarb continued, “Our recently announced acquisition of the iconic Marc Jacobs brand in partnership with WHP Global marks an exciting new chapter for G-III and will significantly accelerate our transformation into a brand-led global powerhouse. Marc Jacobs is one of the most influential brands in fashion, and we see a tremendous opportunity to build on its strong foundation and drive long-term growth across categories, channels, and geographies. With an increasingly powerful portfolio of owned and licensed brands, disciplined execution, and a talented global team, we believe G-III is exceptionally well-positioned to drive sustainable long-term growth and significant shareholder value.”

Results of Operations | First Quarter Fiscal 2027

  • Net sales for the first quarter ended April 30, 2026, decreased 8 percent to $536.0 million compared to $583.6 million in the prior year’s quarter. G-III’s guidance had called for sales of approximately $530 million.
  • Gross margin increased 2,270 basis points to 64.9 percent, compared to 42.2 percent in the first quarter of last year. This increase includes a $102.7 million pre-tax benefit related to the expected recovery of previously incurred tariffs, imposed under the International Emergency Economic Powers Act (“IEEPA”) on inventory sold in the prior year. Excluding this benefit, adjusted gross margin increased 350 basis points to 45.7 percent from 42.2 percent.
  • Net income for the first quarter ended April 30, 2026, was $66.5 million, or $1.50 per diluted share, compared to $7.8 million, or 17 cents per diluted share, in the same period last year. The current period’s results include a $77.9 million net-of-tax benefit recognized in connection with the expected recovery of previously incurred tariffs under the IEEPA, equivalent to $1.75 per share.
  • Non-GAAP net income (loss) per share for the first quarter ended April 30, 2026, was 21 cents per share, compared to 19 cents per diluted share in the same period last year. G-III has forecast a loss of 40 cents to 30 cents per share.

 Balance Sheet as of First Quarter Fiscal 2027

  • Cash and cash equivalents were $394.2 million compared to $257.8 million last year.
  • Inventories decreased 8 percent to $417.9 million this year compared to $456.5 million last year.
  • Capital return to shareholders of $4.2 million in dividend payments.

Outlook
The company increased its fiscal year outlook ending January 31, 2027, and provided its outlook for the second quarter ending July 31, 2026, if tariffs for the remainder of the year will approximate those rates that existed under the IEEPA tariff regime. Additionally, the company’s outlook does not include any impact related to its pending transaction to acquire Marc Jacobs.

 Fiscal 2027

  • G-III continues to expect sales of approximately $2.71 billion, which incorporates a loss of approximately $470 million in sales from Calvin Klein and Tommy Hilfiger products. This compares to net sales of $2.96 billion for fiscal 2026.
  • Net income is now expected to be between $171.0 million and $175.0 million, or diluted earnings per share between $3.85 and $3.95, up from previous guidance expected in the range of $88.0 million and $92.0 million, or between $2.00 and $2.10 a share.  This compares to net income of $67.4 million, or $1.51 per diluted share, for fiscal 2026.
  • Non-GAAP net income is expected to be between $95.0 million and $99.0 million, or diluted earnings per share between $2.15 and $2.25, up from previous guidance between $88.0 million and $92.0 million, or between $2.00 and $2.10 a share. This compares with non-GAAP net income of $116.2 million, or $2.61 per share, for fiscal 2026.
  • Adjusted EBITDA is expected to be between $178.0 million and $182.0 million, up from previous guidance between $158.0 million and $162.0 million and compared to adjusted EBITDA of $192.4 million in fiscal 2026.
  • Net interest income is expected to be approximately $2.0 million.
  • The tax rate is estimated at approximately 30.0 percent for GAAP purposes and 33.5 percent for non-GAAP purposes. The non-GAAP tax rate is higher than our previous estimate due to higher non-deductible expenses.

 Second Quarter Fiscal 2027

  • Net sales for the second quarter of fiscal 2027 are expected to be approximately $570.0 million. This compares to net sales of $613.3 million in last year’s second quarter.
  • Net income for the second quarter of fiscal 2027 is expected to be between $7.0 million and $11.0 million, or diluted earnings per share between $0.15 and $0.25. This compares to net income of $10.9 million, or $0.25 per diluted share, in last year’s second quarter.
  • Non-GAAP net income for the second quarter of fiscal 2027 is expected to be between $7.0 million and $11.0 million, or diluted earnings per share between $0.15 and $0.25. This compares to non-GAAP net income of $11.2 million, or $0.25 per diluted share, in last year’s second quarter.

 Image courtesy G-III Apparel/Converse