G-III Swings into Q1 Profit on Strong Sales, Better Margins

Calvin KleinNew York—Shares of G-III Apparel, producer of licensed apparel and accessories for brands such as Calvin Klein, Tommy Hilfiger and Guess?, surged up about 18% in trading today after the company reported Monday afternoon that it swung into a first quarter profit.

For the quarter ended April 30, the apparel and accessories supplier posted a profit of $1.1 million, or 5 cents a share, compared to a loss of $847,000, or 4 cents a share, a year ago.

Net revenue jumped 19% to $272.6 million ahead of the company’s own April forecast for $270 million in sales. Gross margin rose to 33.9% from 29.9% a year ago.

“Our increase in first quarter revenue was driven by a variety of businesses and by the inclusion of sales from Vilebrequin which was acquired in August 2012,” said Morris Goldfarb, chairman/ceo.“We saw a strong performance across a broad range of categories, particularly with respect to a number of our Calvin Klein products, and from our growing retail operations which produced double-digit comparable store sales increases in the quarter.”

The strong first quarter results lead the company to raise its current and full year earnings forecasts.

For the current quarter, G-III forecast per share earnings of 6 cents to 10 cents on revenue of $287 million. Analysts’ average estimate expects 13 cents on sales of $283 million.

For its fiscal year, G-III raised forecast to $3.20 and $3.30 a share in earnings on sales of $1.57 billion. That’s up fro its previous estimate for a profit of $3.10 to $3.20 a share on sales of $1.55 billion.

Added Goldfarb: “As the year progresses, we expect to continue to increase penetration with respect to several of our important categories, including women’s sportswear, dresses, suits and handbags.”

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com