G-III Apparel Group, Ltd. net sales increased by 39% to $189.0 million for the second quarter ended July 31, compared $135.9 million in the year-ago quarter. The stronger than expected results were attributed primarily to increased wholesale sales of women’s dresses, sportswear and suits, as well as from higher sales by the company’s Wilsons retail outlet store business.
Net income for the second quarter of fiscal 2011 improved to $3.0 million, or 15 cents per diluted share, compared to a net loss of $2.8 million, or 17 cents per share, in the year-ago quarter. This shift to profitability was driven by the increase in sales and improved margins in the company’s wholesale and retail businesses.
Morris Goldfarb, G-III’s chairman and CEO, said, “The impact of our increasing diversification, both by product categories and brand, was demonstrable in the second quarter. We now have built a dress and sportswear business that is shipping twelve months a year. We are looking ahead to a strong second half of the year as a result of the combination of our dress and sportswear business with our fall and winter outerwear business.”
“Our Wilsons business is on track to show much improved results for this year coming off an improved first half of the year,” Goldfar continued. “We believe that Wilsons is well positioned for a strong second half of the year. We also are quite excited about our Calvin Klein handbags and luggage launch, which we will begin shipping next year and will also further diversify our business.”
Mr. Goldfarb concluded, “We have strong momentum going into the second half of the year with a solid order book and a well balanced diversified business model which we believe will result in continued growth in sales and profits.”
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES | ||||||||||||||||
| (NASDAQGSM:GIII) | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND | ||||||||||||||||
| SELECTED BALANCE SHEET DATA | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net sales | $ | 188,960 | $ | 135,926 | $ | 343,237 | $ | 243,489 | ||||||||
| Cost of sales | 128,206 | 95,111 | 233,447 | 171,459 | ||||||||||||
| Gross profit | 60,754 | 40,815 | 109,790 | 72,030 | ||||||||||||
| Selling, general and administrative expenses | 53,844 | 43,195 | 103,525 | 84,078 | ||||||||||||
Depreciation and amortization | 1,277 | 1,384 | 2,557 | 2,788 | ||||||||||||
| Operating income/(loss) | 5,633 | (3,764 | ) | 3,708 | (14,836 | ) | ||||||||||
| Interest and financing charges, net | 634 | 1,022 | 996 | 1,707 | ||||||||||||
Income/(loss) before taxes | 4,999 | (4,786 | ) | 2,712 | (16,543 | ) | ||||||||||
| Income tax expense/(benefit) | 2,000 | (2,010 | ) | 1,085 | (6,948 | ) | ||||||||||
| Net income/(loss) | $ | 2,999 | $ | (2,776 | ) | $ | 1,627 | $ | (9,595 | ) | ||||||
| Net income/(loss) per common share: | ||||||||||||||||
| Basic | $ | 0.16 | $ | (0.17 | ) | $ | 0.09 | $ | (0.57 | ) | ||||||
| Diluted | $ | 0.15 | $ | (0.17 | ) | $ | 0.08 | $ | (0.57 | ) | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 19,126 | 16,726 | 19,016 | 16,711 | ||||||||||||
| Diluted | 19,652 | 16,726 | 19,540 | 16,711 | ||||||||||||
