G-III Apparel Group, Ltd. has been busy cleaning up inventories and building a sportswear business to flatten out its sales cycles that have always depended upon outerwear sales.
G-III saw third quarter sales rise 22.6% to $125.5 million from $102.3 million in the year-ago period. Net income increased 34.1% to $11.4 million, or $1.50 per diluted share, for the quarter, compared to net income of $8.5 million, or $1.16 per diluted share, in the comparable period last year. Net sales are up 22.3% for the YTD period, while earnings have jumped 135%.
The company said the strongest contributors during the quarter were the classics and core sports businesses. Management indicated that the mass and mid-tier channels continue to be an “excellent source of growth” and they continue to see “good growth” in their NFL core sports business.
GIII said they have been successful expanding their Hardwood Classics and Cooperstown Collection businesses into the specialty retail channel and now sell this product to over 1,000 accounts.
Based on guidance provided by the company, the fourth quarter will become less important as top-line sales contributor this year since they have much less inventory to clean up. Inventory at the end of the third quarter was down 14.3% to $40.5 million. The action will also narrow the loss for the period.
Sales are expected to be approximately $32 million for Q4, netting a net loss in the $2.8 million to $3.2 million range. The company lost $4.5 million on sales of $47.6 million in the fourth quarter last year. For the fiscal year, G-III continues to forecast net sales of approximately $220 million and diluted net income per share between $1.10 and $1.15.
