G-III Back in Black for Q4

by MR Magazine Staff Mar 22, 2007

NEW YORK – G-III Apparel Group reversed a year-ago loss to finish the year with profits that were nearly double those of 2005.

In the three months ended Jan. 3, the outerwear and sportswear marketer registered net income of $518,000, or $0.03 a diluted share, a penny above the consensus estimate of analysts. This compared to a net loss of $2.8 million, or $0.23, in the final quarter of the prior year.

Net sales leaped 43% to $98.8 million from $69.1 million a year ago. Gross margin ramped up to 26% of sales from 23.2% in the year-ago period.

The profitable finish put net income for the year at $13.2 million, or $0.94 a diluted share, 86% above the $7.1 million, or $0.58, registered during fiscal 2005. Sales for the year were up 31.7% to $427 million from $324.1 million.

“Fiscal 2007 was the strongest year in our history,” said Morris Goldfarb, chairman and chief executive officer. “We grew our revenues, increased our profitability, expanded our business into new categories and added new talent to our management team. We are well positioned to continue this success as we look to the years ahead.”

The company acquired Marvin Richards and certain assets of Winlit in mid-2005, so the just concluded 12-month period is the first in which these operations are consolidated for the entire year.

The company recently received $30 million, on a net basis, in connection with a secondary public offering.

“We intend to proceed purposefully and thoughtfully to further diversify our business into an all-season, all-category apparel company capable of serving every tier of distribution,” Goldfarb concluded.

The company forecast a net loss of $7.7 million to $8.4 million, or $0.51 to $0.56 a diluted share, on sales of $28 million for its first quarter. Last year, it incurred a net loss of $8.9 million, or $0.72, on sales of $14.4 million. The company noted that it historically has lost money during the first quarter.

G-III designs, manufactures and markets men’s, women’s and children’s sportswear and outerwear under a wide array of licenses, private retail label and licensed brands spanning numerous designers, brands and sports properties.