G-III Apparel Group, Ltd. reported a slight increase in adjusted earnings in the second quarter ended July 31, just ahead of guidance due to improved gross margins. Sales fell 10 percent and were below guidance, with the decline reflecting the loss of the Calvin Klein and Tommy Hilfiger licenses. Go-forward portfolio sales were up high-single digits.

The company maintained its sales outlook and slightly raised its adjusted EPS guidance for the year. Guidance for net income was raised due to tariff refunds.

Fiscal 2027 Q2 Summary
Net sales for the second quarter ended July 31, 2026 decreased 10 percent to $554.1 million compared to $613.3 million in the prior year’s quarter and guidance of $570.0 million.

Gross margin increased 440 basis points to 45.2 percent of net sales in Q2, compared to 40.8 percent in the second quarter of last year. This improvement is said to reflect price increases as well as the continued mix shift toward higher-margin owned brands.

Net income for the second quarter ended July 31, 2026 was $20.2 million, or 46 cents per diluted share, compared to $10.9 million, or 25 cents per diluted share, in the same period last year.

Non-GAAP Adjusted earnings per diluted share for the second quarter ended July 31, 2026 was 26 cents per diluted share, compared to 25 cents per diluted share, in the same period last year, and guidance in the range of 15 cents and 25 cents.

Morris Goldfarb, G-III’s chairman and chief executive officer, said, “Our second quarter results reflect strong execution across the organization, with earnings exceeding our guidance, driven by substantial gross margin expansion. Our go-forward portfolio grew at a high-single digit rate during the quarter, reinforcing our confidence in the power of our brands and business model.”

Balance Sheet Summary
Cash and cash equivalents were $529.2 million compared to $301.8 million last year.

Inventories decreased 13 percent to $555.0 million this year compared to $639.8 million last year.

Capital return to shareholders of $12.2 million consisting of $7.9 million of share repurchases and $4.3 million in dividend payments.

Outlook
The company updated its outlook for the fiscal year ending January 31, 2027 and provided its outlook for the third quarter ending October 31, 2026. The company’s updated guidance assumes that tariffs for the remainder of the year will approximate current rates.

The company’s outlook does not include any impact related to the Marc Jacobs acquisition, and it expects to provide more specific guidance when it reports third quarter earnings. The company believes the acquisition will be slightly dilutive in fiscal 2027. As previously disclosed, the transaction is expected to be dilutive during the first 12 months after closing, with accretion expected thereafter.

Goldfarb added, “Our strategic transformation has taken a meaningful step forward with the addition of Marc Jacobs. The acquisition significantly strengthens our portfolio and further enhances our position as a global fashion leader. I am extremely optimistic about the future of G-III and believe we have the brands, capabilities, and financial flexibility to capitalize on the opportunities ahead and create long-term value for our shareholders.”

Fiscal 2027

  • Net sales for fiscal 2027 are expected to be approximately $2.71 billion, which incorporates the loss of approximately $460 million of sales from Calvin Klein and Tommy Hilfiger products. This compares to net sales of $2.96 billion for fiscal 2026.
  • Net income is expected to be between $181.0 million and $185.0 million, or diluted earnings per share between $4.10 and $4.20. 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 $97.0 million and $101.0 million, or diluted earnings per share between $2.20 and $2.30. This compares to non-GAAP net income of $116.2 million, or diluted earnings per share of $2.61 for fiscal 2026.
  • Adjusted EBITDA is expected to be between $174.0 million and $178.0 million compared to adjusted EBITDA of $192.4 million in fiscal 2026.
  • Net interest income is expected to be approximately $8.0 million for GAAP purposes and $5.0 million for non-GAAP purposes.
  • Tax rates are estimated to be approximately 25.2 percent for GAAP purposes and 32.2 percent for non-GAAP purposes.

Previously, G-III expected sales of approximately $2.71 billion, net income between $3.85 and $3.95, adjusted EPS between $2.15 and $2.25, and adjusted EBITDA between $178.0 million and $182.0 million.

Third Quarter Fiscal 2027

  • Net sales for the third quarter of fiscal 2027 are expected to be approximately $870.0 million. This compares to net sales of $988.6 million in last year’s third quarter.
  • Net income for the third quarter of fiscal 2027 is expected to be between $59.0 million and $64.0 million, or diluted earnings per share between $1.35 and $1.45. This compares to GAAP net income of $80.6 million, or $1.84 per diluted share, and non-GAAP net income of $83.4 million, or $1.90 per diluted share in last year’s third quarter.

G-III owns 11 brands, including DKNY, Donna Karan, Karl Lagerfeld, and Vilebrequin, and licenses over 20 fashion and lifestyle labels, including Levi’s, Nautica, Champion, Halston, Converse, French Connection, BCBG, and major national sports leagues.

Image courtesy G-III Apparel Group, Ltd.