Q1 Loss Reduced at G-III
NEW YORK – G-III Apparel Group trimmed its first quarter loss, the company said late Wednesday, as it continued to evolve into a company less dependent on outerwear for sales and profits.
In the three months ended April 30, the New York-based firm registered a loss of $6.4 million, or $0.42 a diluted share, down from a loss of $8.9 million, or $0.72, in the prior-year period.
Helped by recent acquisitions, net sales ballooned to $35.1 million from $14.4 million in the 2006 quarter.
Morris Goldfarb, chairman and chief executive officer, said, “We are pleased with the results in the first quarter, which start to show the influence of our strategy to build our non-outerwear business. Our sportswear and women’s suit and dress categories each contributed to the overall improvement in financial performance. With the recently announced asset acquisition of the Jessica Howard, Eliza J. and Industrial Cotton business, we believe that we have accelerated our growth opportunities in the dress and junior sportswear areas.”
Those assets were acquired last month.
Goldfarb said that bookings are strong for fall and holiday, still the critical periods for sales and profits at G-III, but noted that one exception is “a decline in our outerwear private label programs which is primarily attributable to one customer.”
Although not stated, that customer is generally believed to be Wilsons The Leather Experts, a major account of G-III which has stated that it is reducing its investment in private label programs.
The CEO said that the firm’s Calvin Klein businesses are expected to jump more than 50% for the year. “In addition, we are seeing a good reaction to the vast majority of programs in the mid-tier and better channels and distribution and believe that we are posed to complete another strong year,” Goldfarb concluded.
For the fiscal year ending next 31 January, G-III expects earnings of $0.90 to $0.95 per diluted share, including a loss of $0.05 to $0.10 from its recent acquisitions, on sales of about $500 million.
For the second quarter, the company expects a loss of $0.19 to $0.24 on sales of about $75 million, versus sales of $69.1 million in last year’s quarter. The company said the slower sales growth reflects the decline in private label sales and retailers pushing back outerwear delivery dates to help them “better coincide with consumer demand.”
In addition to Calvin Klein, G-III’s brand portfolio includes Sean John, Kenneth Cole, Cole Haan, Guess and numerous sports leagues and franchises.
