G-III net sales soar 21.6% in Q2 FY18

08 Sep '17

3 min read

Courtesy: G-III Apparel

The net sales of G-III Apparel Group have climbed 21.6 per cent to $538.0 million in the second quarter of fiscal 2018. This increase includes approximately $45.0 million of net sales of its DKNY and Donna Karan products. The company reported a net loss of $8.6 million for the second quarter of 2018, compared to a net loss of $1.3 million, in the year ago period.

The company noted that the year-ago second quarter net loss did not include any results from the Donna Karan acquisition, but did include approximately $3.0 million, equal to $0.04 per share, net of taxes, of professional fees related to the acquisition.

"The brand portfolio we have created through acquisition and partnership is powerful. This great portfolio is enabling us to perform well despite significant headwinds in the marketplace. We are fortunate to have developed a diverse business, anchored by Calvin Klein and supported by other brands including Tommy Hilfiger and Karl Lagerfeld Paris. And now, Donna Karan and DKNY, both global power brands, will help us capture additional opportunities. We are positioned to provide exciting new assortments to a range of retailers and to demonstrate leadership in our industry at a critical time. We expect to generate growth in sales and achieve higher levels of profitability as we move forward," Morris Goldfarb, G-III chairman and chief executive officer, said.

For the third fiscal quarter ending October 31, 2017, it is expected that net sales will be around $1.03 billion and net income between $69 and $73 million, or between $1.36 and $1.46 per diluted share. This forecast compares to net sales of $883 million and net income of $70.6 million, or $1.50 per diluted share, reported for the third quarter of fiscal 2017. The third quarter forecast assumes Donna Karan related transitional expenses of approximately $6.0 million and non-cash imputed interest expense of $1.4 million.

The company is now forecasting revenues of approximately $2.80 billion and net income between $56 and $60 million or between $1.11 and $1.21 per diluted share. The company previously forecasted net sales of $2.76 billion and net income between $52 and $57 million, or between $1.04 and $1.14 per diluted share. The forecast includes Donna Karan-related transitional expenses of approximately $8 million and non-cash imputed interest expense of approximately $6 million.

"In our own retail operations, we expect to improve performance through store rationalisation, better merchandising and expense reductions. We believe we can mitigate the pressure on our retail results while reaping the benefits of an exciting new phase of wholesale growth as we look forward to a successful second half of the year. We anticipate achieving our operational and financial objectives and fulfilling our ongoing mission to offer brand and product solutions to an industry affected by disruption and change," Goldfarb concluded. (RR)

Fibre2Fashion News Desk – India

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