G-III SEES NET SALES DECLINE IN SECOND QUARTER
G-III Apparel Group, Ltd, which recently purchased Donna Karan International, has announced operating results for the second quarter of fiscal 2017 that ended July 31, 2016. Net sales decreased 7 percent to $442.3 million from $473.9 million in the year-ago period. There was also a net loss for the second quarter of $1.3 million, or 3 cents per share.
“We sustained momentum in our wholesale businesses with consistent well designed high quality product that our customers responded to,” said Morris Goldfarb, the company’s CEO and president. “We believe our wholesale outerwear opportunity is intact for the full year despite a reduction by retailers in early season orders as they shifted their focus toward a greater degree of in season replenishment and reorder business. We believe that the risk of continued softness in the retail outlet environment has somewhat abated as we have now liquidated inventory from last year’s holiday season and are currently adding some great new fall products to our store inventory. Lastly, we believe forecasted cool weather trends should be in our favor this fall and holiday season compared to last year and should provide the impetus for improved sales for Wilsons and Bass in the second half.”
The company also updated its Fiscal 2016 guidance is now forecasting net sales of approximately $2.48 billion and net income between $102 million and $106 million, or a range between $2.16 and $2.26 per diluted share, compared to its previous guidance of net sales of approximately $2.56 billion and net income between $120 million and $125 million, or a range between $2.55 and $2.65 per diluted share. In addiotn, for its third fiscal quarter ending October 31, 2016, the company is forecasting net sales of approximately $940 million compared to $910 million in the comparable quarter last year. The company is also forecasting net income for the third fiscal quarter between $70 million and $76 million, or between $1.50 and $1.60 per diluted share, compared to net income of $87.2 million, or $1.87 per diluted share, in last year’s third quarter.
“We expect to generate stronger operating margins in the back half of the year as we begin to realize improved sales and gross margins in both our retail outlet and wholesale businesses, as well as better leverage on expenses in our wholesale outerwear and newly launched and expanded Tommy Hilfiger and Karl Lagerfeld lines,” said Goldfarb. “The fundamentals of our wholesale apparel and accessories business remain excellent. This is significant as it aligns with the substantial growth opportunities we have with Calvin Klein, Tommy Hilfiger and Karl Lagerfeld. It is also consistent with our planned strategy for the acquisition of Donna Karan which will be to develop and build categories of Donna Karan women’s apparel and accessories throughout the world. We believe that this set of opportunities supports an eventual doubling of our annual revenues to roughly $5 billion in five years.”
G-III currently owns such brands as Vilebrequin, Andrew Marc, and, G.H. Bass; operates fashion licenses under such brands as Calvin Klein, Tommy Hilfiger, Karl Lagerfeld, Kenneth Cole, Cole Haan, Levi’s and Dockers; and operates retail stores under the Wilsons Leather, Bass, G.H. Bass & Co., Vilebrequin and Calvin Klein Performance names.