G-III Apparel Group Ltd. posted a narrower fiscal second-quarter loss as revenues surged and the stronger performance from its dress and sportswear business offset seasonal losses in its Wilsons retail outlet business.
The loss was smaller than G-III expected, as the company, which has cut costs and inventory, warned in June its loss would widen on seasonal weakness in its Wilsons retail outlet business. Wilsons' difficulties didn't hurt year-ago results to the same extent, since G-III owned the recently acquired unit for only three weeks atf that point.
The loss narrowed to $2.78 million, or 17 cents a share, for the period
ended July 31, from $3.85 million, or 23 cents a share, a year earlier.
G-III's June loss forecast was 28 cents to 32 cents a share. Revenue rose 20% to $135.9 million.
Gross margin rose to 30% from 25.5%.
Morris Goldfarb, Chairman and Chief Executive Officer, said, “We are pleased with the performance of our business during the quarter. We saw strong results from our dress and sportswear businesses. At the same time, we built our order book to expected levels and are positioned well for the upcoming fall season in outerwear, dresses, sportswear and suits.”
Goldfarb continued, “Our inventory is in good shape and we expect a good second half performance in our wholesale business. Our licensed business, our company-owned brands, and our private label programs are performing to expectations and we believe that our second half will once again demonstrate that we can produce good results even in a challenging environment. We also believe that we have made appropriate changes to the merchandise mix at our Wilsons outlet stores in order to increase our sales and productivity during the important holiday retail season. We believe Wilsons has an opportunity to see considerably improved performance compared to last year.”
Goldfarb concluded, “We have continued to make strides toward our long-term goal of building G-III into an all season diversified apparel company. Even while we have streamlined our infrastructure, we have at the same time continued to invest in our sportswear, dress and suit businesses to support the growth we are experiencing and believe will continue. We are pleased to remain in a position to drive excellent value to consumers across all tiers of distribution and to deliver value to our shareholders.”
For the full fiscal year ending January 31, 2010, the company expects net sales of approximately $770 million, net income in the range of $16.6 million to $18.4 million, and diluted net income per share between 95 cents and $1.05. The company is also forecasting EBITDA for the fiscal year ending January 31, 2010 to increase approximately 10% to 18% to a range of approximately $40.2 to $43.2 million.
G-III sells products under the Siena and Colebrook & Co. names, as
well as licensed brands such as Calvin Klein. Much of G-III's sales are
generated from licensed apparel it makes for professional football,
basketball, hockey and baseball teams, as well as for Jones New York,
Nine West, and Kenneth Cole.