G-III Apparel Group, Ltd. raised its full-year guidance after reporting second-quarter sales and earnings topped expectations.
Morris Goldfarb, G-III’s chairman and chief executive officer, said, “We delivered outstanding second-quarter results that exceeded our guidance for both the top and bottom lines. Throughout the pandemic, we navigated through the challenges as our world-class teams have remained focused on delivering positive results. We are encouraged by the strong consumer demand that we are seeing for apparel and accessories. Although some uncertainties remain, we feel good about our business, giving us the confidence to raise our guidance.”
Goldfarb concluded, “The strength in our casual categories continues. We are also pleased to see increased demand for broader lifestyle categories, including dresses and career wear. G-III’s diversified product categories ranging across our globally recognized power brands, DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld Paris, position us well to meet the increasing demand for our products.”
Net sales for the second quarter ended July 31, 2021 increased 62.5 percent to $483.1 million from $297.2 million in the prior year’s quarter. The company reported net income for the second quarter of $19.2 million, or $0.39 per diluted share, compared to a net loss of $15.0 million, or $(0.31) per share, in the prior year’s quarter.
G-III Apparel had predicted earnings in the range of 3 cents to 13 cents a share on sales of $460 million.
The company completed the restructuring of its retail operations segment during fiscal 2021 and closed the Wilsons Leather and G.H. Bass stores. Included in the company’s results for the second quarter of last year are net losses from the Wilsons Leather and G.H. Bass store operations of $25.6 million, or $(0.53) per diluted share. These results reflect direct store operations including impairment charges, but do not include any allocated corporate overhead charges, shared administrative expenses or shared distribution expenses. These operating results for Wilsons Leather and G.H. Bass are presented solely to provide the historical operating results of the portion of the company’s retail operations segment that was closed and are not intended to be used to develop expectations for future results of the company or to indicate any future level of profitability of the company.
The company raised its guidance for the fiscal year ending January 31, 2022. As the developments associated with the pandemic continue to be fluid, the company’s fiscal year 2022 guidance contemplates the expected impact from the current supply chain conditions, including expected increased shipping costs and delays in receipt of goods. However, the guidance does not contemplate any reimposition of government-mandated store closures or other governmental restrictions as a result of the pandemic which could have a material impact on its net sales, results of operations and supply chain during fiscal 2022. The company’s fiscal 2022 results could differ materially from its current outlook as a result of the occurrence of any of these or other uncontemplated events.
For fiscal 2022, the company expects net sales of approximately $2.70 billion and net income between $155.0 million and $165.0 million, or between $3.10 and $3.20 per diluted share. The company previously forecasted net sales of approximately $2.57 billion and net income between $125.0 million and $135.0 million, or between $2.60 and $2.70 per diluted share. This compares to net sales of $2.06 billion and net income of $23.5 million, or $0.48 per diluted share, last year. Last fiscal year’s results included net sales of $91.8 million and a net loss of $(1.14) per diluted share associated with the Wilsons Leather and G.H. Bass store operations.
For the third quarter of the current 2022 fiscal year, G-III Apparel said it expects net sales of approximately $1.00 billion and net income between $80.0 million and $90.0 million or $1.65 and $1.75 per diluted share. This compares to net sales of $826.6 million and net income of $63.2 million or $1.29 per diluted share in last year’s third quarter. The results for last year’s third quarter included net sales of $38.2 million and a net loss per diluted share of $(0.25) associated with the Wilsons Leather and G.H. Bass store operations.
G-III’s owned brands include DKNY, Donna Karan, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, and Marc New York. G-III has fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi’s, and Dockers brands. Through its team sports business, G-III has licenses with all the major sports leagues and over 150 U.S. colleges and universities.
Photo courtesy G-III