New York—G-III Apparel Group reported today that it swung into a wider first quarter loss as its product costs and expenses rose.
For the quarter ended April 30, the maker of merchandise under licenses from Calvin Klein, Tommy Hilfiger, Vince Camuto, Nine West and others posted a net loss of $847,000, or 4 cents a share, compared with a loss of $520,000, or 3 cents a share, a year ago. Net sales rose 16.5% to $229.45 million.
The earnings results were in line with analysts’ average estimate for a loss of 4 cents a share, but G-III beat their estimate for $213.39 million.
Offsetting the company’s sales gains, however, were a 17% increase in its cost to make its products while selling and general expenses rose 15%. Interest expenses also rose.
To Layer on Additional Brands
“Our first quarter results met our expectations,” said Morris Goldfarb, chairman/ceo. “We anticipate improved profitability for the full year as we expect input costs will moderate compared to prior year levels. Early booking trends for fall are good and give us confidence in our outlook for the full year.”
Goldfarb reiterated that G-III’s sales would be helped by expansion within brands and into new categories, including handbags.
“We are building significant businesses in a number of important categories,” he said. We are creating several platforms that are expected to show operating margin improvements as we increase in sales volume. In addition, we plan to layer on additional brands to these platforms.”
Looking ahead, G-III forecast second quarter sales would be about $250 million with earnings between 4 to 8 cents a share. Analysts’ consensus expects earnings of 8 cents a share on sales of $249.58 million.
G-III Apparel reiterated its full fiscal year forecast for net sales of about $1.35 billion and net income in the range of $2.62 and $2.72 a share. Analysts expect the company to earn $2.70 a share on sales of $1.33 billion.
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