G-III Apparel Group, Ltd. reported that net sales in its second quarter increased by 21.7 percent to $230 million from $189 million in the year-ago period. The company reported net income for the second quarter of $1.6 million, or 8 cents per diluted share, compared to net income of $3.0 million, or 15 cents, in the prior year's comparable period.
Morris Goldfarb, G-III's chairman and chief executive officer, said, “We had a strong second quarter from a revenue perspective, but some softness in the market prompted us to provide higher levels of support and discounts to our customers. While this affected our gross margin in the quarter, we have done a good job of stimulating demand and keeping inventories current for us and our retail partners.”
Goldfarb concluded, “We are shipping on a solid pace as we enter our key selling season. We believe that we are positioned properly for a strong second half. Our designs are trend-right across our suite of brands and product categories for fall and holiday and we have a compelling price and value relationship to show consumers. We continue to have a wide range of growth opportunities by brand, by category and by channel. We believe that we can continue to build our business both organically and through strategic acquisitions.”
Outlook
The company today revised its prior guidance for the full fiscal year ending January 31, 2012. The company is now forecasting net sales of approximately $1.25 billion and net income between $62.5 million and $64.5 million, or a range of $3.05 and $3.15 per diluted share compared to its previous guidance of net sales of approximately $1.2 billion and net income between $64.5 million and $66.5 million, or a range of $3.15 and $3.25 per diluted share. The company is now projecting EBITDA for fiscal 2012 to increase approximately 12 percent to 15 percent to between $115 million and $118 million compared to its previous guidance of between approximately $117 million and $121 million. EBITDA should be evaluated in light of the company's financial results prepared in accordance with US GAAP. A reconciliation of EBITDA to net income in accordance with US GAAP is included in a table accompanying the condensed financial statements in this release.
For its third fiscal quarter ending October 31, 2011, the company is forecasting net sales of approximately $500 million compared to $450 million in the comparable quarter last year. The company is also forecasting net income for the third fiscal quarter between $46.2 million and $47.8 million, or between $2.25 and $2.35 per diluted share, compared to net income of $42.7 million, or $2.16 per diluted share in last year's third quarter.
