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G-III Profits Top Estimates Despite Decline – WWD

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G-III Apparel Group’s first-quarter profits slipped from a strong showing last year, but still beat expectations and were strong enough to prompt the Donna Karan and Karl Lagerfeld parent to boost its outlook for the year.

G-III’s first-quarter net income for the quarter fell to $3.2 million from $30.6 million a year earlier, but came in much better than the $5 million to $10 million in losses the company projected in March. 

Adjusted earnings per share tallied 13 cents when Wall Street analysts had a 10 cent loss penciled in, according to FactSet. 

 Sales for the quarter ended April 30 fell 11.9 percent to $606.6 million from $688.8 million, coming in well ahead of the $558 million analysts projected. 

G-III set its sights for the full year on profits of $132 million to $137 million instead of the $125 million to $130 million projected in March. The revenue outlook, however, slipped to $3.29 billion from $3.23 billion. 

The company continued to drum up new business, inking a 25-year master license agreement with Xcel Brands to produce men’s and women’s products under the Halston brand. That — along with its planned expansion of Donna Karan and a previously announced licensing deal with Nautica — will help fill the void left by Tommy Hilfger and Calvin Klein as PVH Corp. gradually takes back control over those licenses. 

Morris Goldfarb, chairman and chief executive officer, said, “We made progress rightsizing our inventory position, which sequentially decreased by $80 million, while our gross margins were significantly better than last year’s first quarter.” 

The CEO added: “G-III continues to deliver positive results and we are off to a good start to the new fiscal year. Looking ahead, we are optimistic about our business and, as a result, are raising our guidance. We remain focused on driving our key strategic priorities and continuing to develop new growth opportunities.”

G-III has also been building the Karl Lagerfeld brand, which it bought full control of last year. 

All things Karl got an extra boost this spring as the Metropolitan Museum of Art’s Costume Institute celebrated its spring exhibition “Karl Lagerfeld: A Line of Beauty.”

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