G-III Apparel reported net sales spiked 32.6% to $170.7 million for the fourth quarter of fiscal 2008 from $128.7 million in the year-ago period. In a conference call with analysts, management credited the companys new retail segment along with significant strength in the department store sector with the boost in revenues.
Fourth quarter and yearly performance was said to be negatively impacted by impairment charges for goodwill in the non-licensed segment and one of the companys trademarks. Including the impairment charges, the net loss for the fourth quarter ended January 31 was $32.1 million, or $1.93 per diluted share, versus a net income of $1.1 million, or 6 cents per diluted share, in the year ago period.
Gross margins were up 120 basis points to 24.5% of sales in the fourth quarter, compared to 23.3% of sales in the year-ago period. GIII attributed the gain to higher gross margins generated in the retail segment.
Management said the company was making concerted efforts to improve its sports licensing business, which suffered from a tough retail fiscal 2008 retail environment. Representatives said they were “working hard” to obtain additional licenses from existing league relationships and from new franchises.
Regarding outlook, management forecasted sales of approximately $105 million for the first quarter from $75 million in last years first quarter, a projected 29% improvement. The company also expects an approximate net loss of between $8 million and $8.8 million, or between 48 cents and 52 cents per diluted share, compared to a net loss of $6.9 million, or 42 cents per diluted share, in the prior years