Shares of G-III Apparel Group jumped $3.03, or 15.2 percent, to $22.92 Tuesday after the outerwear and sportswear maker hiked its full-year guidance while reporting first-quarter earnings that beat estimates.

For the quarter ended April 30, sales climbed 15.6 percent to $529.0 million.

The net loss came to $10.4 million, or 21 cents per share, compared to net income of $2.8 million, or 6 cents, in the prior year’s comparable period. The latest quarter included $2.5 million, or 3 cents a share, in charges tied to professional fees, severance and one-time debt costs tied to its acquisition of Donna Karen International.

Excluding those charges, the net loss per share for the latest quarter would have been 18 cents compared to income of 6 cents in the prior year’s comparable period. Wall Street’s consensus estimate had been a loss of 37 cents a share.

The latest quarter also included $14.8 million and additional cash interest expense of $7.3 million related to the operation and ownership of DKI, equal to an aggregate of 29 cents per share. The acquisition of DKI was completed on December 1, 2016

Net sales of its wholesale operations segment increased 18.5 percent to $453 million. Wholesale sales increased primarily as a result of increases in its Tommy Hilfiger license products, driven by new denim sportswear, women’s performance wear and women’s suits product lines, as well as from the inclusion of net sales of approximately $40 million from its new DKNY and Donna Karan product lines.

On a conference call with analysts, Morris Goldfarb, G-III’s chairman and CEO, said the gains on the wholesale side were led by its DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld labels.

“Our department store business remains healthy,” said xx. “We are growing both organically and through acquisition.” Excluding the Donna, Calvin and DKNY acquisitions, sales in its wholesale business was up 8 percent and is expected to be up mid to high single-digits for the year. With Donna Karan and DKNY ramping up in the second half, the wholesale business is expected to generate net sales increases of approximately 18 percent for the full year.

Regarding categories in the quarter, the dress business “remains strong,” led by Calvin Klein and almost 50 percent growth by Hilfiger. Eliza J and Vince Camuto also continue to grow while Karl Lagerfeld dresses are “expanding rapidly.”

Calvin Klein continues to drive its women’s sportswear and performance business although Hilfiger sportswear and denim “are doing well for the spring season.”  Handbags, led by Calvin Klein, “remain a consistent performer.”

Within outerwear, the team sports business “also has an order book up versus last year led by NFL.” Through the team sports business, G-III has licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League, Hands High, Touch by Alyssa Milano and more than 100 U.S. colleges and universities. Other outerwear standouts in the quarter were Calvin Klein, Tommy Hilfiger and Levi’s.

Net sales of retail operations segment increased 4 percent to $99 million due to the inclusion of net sales of $15 million from its new Donna Karan stores offset decreases in at Wilsons and G.H. Bass. Same-store sales slumped 11.3 percent at Wilsons and 9.2 percent for G.H. Bass.

Gross margin improved to 38.2 percent from 36.2 percent in the prior year’s period. Gross margin in its wholesale operations segment was 34.2 percent compared to 32.5 percent in last year’s quarter, helped by its dress and sportswear categories and the Calvin Klein brand in particular. The gross margin percentage in its retail operations segment was 47.6 percent compared to 43.5 percent in the prior year, primarily due to its new DKNY retail store business.

Looking ahead, G-III raised its guidance for the full year to a range of $1.04 and $1.14 per share, up from 80 to 90 cents previously. On an adjusted basis, excluding transitional expenses and imputed interest expense, the company is forecasting non-GAAP net income between $1.20 and $1.30 per share. Revenues are now expected to come in at approximately $2.76 billion, up from $2.73 billion previously.

For the second quarter, sales are projected to be approximately $520 million with a net loss between $15 million and $20 million, or 30 to 40 cents a share. That compares to net sales of $442 million and a net loss of $1.3 million, or 3 cents, reported for the year-ago second quarter.

Photo courtesy G-III Apparel Group