G-III Apparel’s Q3 Sales Climb 23 Percent

G-III Apparel Group, Ltd. lifted its guidance for the year after reporting earnings rose 68.8 percent in the third quarter ended October 31 on a 22.8 percent sales gain.

Morris Goldfarb, G-III’s Chairman and CEO, said, “The strong momentum in our business in the first half continues, as we delivered outstanding third-quarter results with both top and bottom line exceeding our guidance. Given the strong demand, we are seeing across our brands, we are well-positioned for the holiday season. We are raising our full-year guidance and expect to deliver our highest annual earnings in our company’s history.”

Goldfarb concluded, “Our world-class team continues to maintain tremendous flexibility and is delivering the right product at the right time across our diversified distribution channels. We believe we will enter the new fiscal year in our strongest financial position ever, affording us the flexibility to further expand our global reach and increase shareholder value.”

Net sales for the third quarter ended October 31, 2021 increased 22.8 percent to $1.02 billion from $826.6 million in the prior year’s quarter. The company reported net income for the third quarter of $106.7 million, or $2.16 per diluted share, compared to $63.2 million, or $1.29 per diluted share, in the prior year’s quarter.

The company completed the restructuring of its retail operations segment during fiscal 2021 and closed its Wilsons Leather and G.H. Bass stores. Included in the company’s results for the third quarter of last year are net losses from the Wilsons Leather and G.H. Bass store operations of $12.0 million, or $(0.25) 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.

Outlook
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. The reimposition of store closures or other restrictions 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 $2.77 billion and net income between $180.0 million and $190.0 million, or between $3.65 and $3.75 per diluted share. The company previously forecasted 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. 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.

G-III designs sources and markets apparel and accessories under more than 30 licensed and proprietary brands anchored by five global brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld Paris. G-III’s owned brands include DKNY, Donna Karan, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, and Sonia Rykiel. 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 the NFL, NBA, MLB, NHL, and over 150 U.S. colleges and universities.