G-III Reports Strong Q2 Earnings

In What's New, Industry News by Accessories Staff

Andrew Marc, one of G-III's leading brands

Andrew Marc, one of G-III’s leading brands

New York–G-III Apparel Group reported today a 72% increase in second quarter net profit, reflecting strong double-digit sales growth aided by contribution from the acquired G.H. Bass business. The results topped analysts’ expectations.

For the quarter ended July 31, the maker of Andrew Marc, Marc New York, Jessica Howard brands reported net income of $6.24 million, or 29 cents a share, higher than $3.59 million, or 17 cents a share in the prior-year quarter.

On average, analysts expected the company to report earnings of 16 cents a share.

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The company’s earnings per share guidance have been impacted by its recent sale of 1.725 million shares in a public offering completed in June.

Sales, meanwhile, grew 39% to $424 million from $304.2 million last year, driven by a strong wholesale performance across several categories. Those sales beat analysts’ consensus estimate of $390.98 million.

“In spite of losses related to the transition and repositioning of our recently acquired GH Bass business, we were able to show higher overall profits due to strong shipments in our licensed and non-licensed businesses,” said G-III Chairman/CEO/President Morris Goldfarb.

He highlighted strong performances from a number of Calvin Klein divisions and several of its outerwear and dress businesses.

“We continue to be well positioned to take advantage of acquisition opportunities, deploy our strategic capital and drive enhanced returns for our shareholders,” Goldfarb added.

The sales growth was driven by a strong wholesale performance across several categories as well as $53.6 million of net sales contribution from the G.H. Bass business that was acquired in November 2013.

Operating profit for the quarter grew to $11.50 million from $7.13 million in the year-ago quarter, and gross profit totaled $148.06 million, up from $99.42 million in the prior-year quarter.

For the full fiscal year, G-III trimmed its earnings forecast to a range of $4.00 and $4.15 a share from the prior guidance range of $4.05 and $4.20 a share. However, the company also now projects net sales of about $2.11 billion, up from the previous guidance of about $2.06 billion.

Analysts forecast earnings of $4.11 a share on annual sales of $2.07 billion.


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