— Net Sales and Net Income Per Diluted Share
for the Second Quarter Exceed Expectations —
— Net Sales of $483.1 Million for the Second
Quarter vs. $297.2 Million Last Year —
— Net Income Per Diluted Share of $0.39 for
the Second Quarter vs. a Net Loss Per Share of ($0.31) Last Year
—
— Ends Second Quarter With Cash and Credit
Facility Availability of Approximately $900 Million —
— Increases Guidance for Fiscal Year 2022
—
G-III Apparel Group, Ltd. (NasdaqGS: GIII) today announced
operating results for the second quarter of fiscal 2022, ended July
31, 2021.
Morris Goldfarb, G-III’s Chairman and Chief Executive Officer,
said, “We delivered outstanding second quarter results that
exceeded our guidance for both the top and bottom lines. Throughout
the pandemic, we navigated through the challenges as our world
class teams have remained focused on delivering positive results.
We are encouraged by the strong consumer demand that we are seeing
for apparel and accessories. Although some uncertainties remain, we
feel good about our business, giving us the confidence to raise our
guidance.”
Mr. Goldfarb concluded, “The strength in our casual categories
continues. We are also pleased to see increased demand for broader
lifestyle categories, including dresses and career wear. G-III’s
diversified product categories ranging across our globally
recognized power brands, DKNY, Donna Karan, Calvin Klein, Tommy
Hilfiger and Karl Lagerfeld Paris, position us well to meet the
increasing demand for our products.”
Net sales for the second quarter ended July 31, 2021 increased
62.5% to $483.1 million from $297.2 million in the prior year’s
quarter. The Company reported net income for the second quarter of
$19.2 million, or $0.39 per diluted share, compared to a net loss
of $15.0 million, or $(0.31) per share, in the prior year’s
quarter.
The Company completed the restructuring of its retail operations
segment during fiscal 2021 and closed the Wilsons Leather and G.H.
Bass stores. Included in the Company’s results for the second
quarter of last year are net losses from the Wilsons Leather and
G.H. Bass store operations of $25.6 million, or $(0.53) per diluted
share. These results reflect direct store operations including
impairment charges, but do not include any allocated corporate
overhead charges, shared administrative expenses or shared
distribution expenses. These operating results for Wilsons Leather
and G.H. Bass are presented solely to provide the historical
operating results of the portion of the Company’s retail operations
segment that was closed and are not intended to be used to develop
expectations for future results of the Company or to indicate any
future level of profitability of the Company.
Outlook
The Company today raised its guidance for the fiscal year ending
January 31, 2022. As the developments associated with the COVID-19
pandemic continue to be fluid, the Company’s fiscal year 2022
guidance contemplates the expected impact from the current supply
chain conditions, including expected increased shipping costs and
delays in receipt of goods. However, the guidance does not
contemplate any reimposition of government-mandated store closures
or other governmental restrictions as a result of the COVID-19
pandemic which could have a material impact on our net sales,
results of operations and supply chain during fiscal 2022. The
Company’s fiscal 2022 results could differ materially from its
current outlook as a result of the occurrence of any of these or
other uncontemplated events.
For fiscal 2022, the Company expects net sales of approximately
$2.70 billion and net income between $155.0 million and $165.0
million, or between $3.10 and $3.20 per diluted share. The Company
previously forecasted net sales of approximately $2.57 billion and
net income between $125.0 million and $135.0 million, or between
$2.60 and $2.70 per diluted share. This compares to net sales of
$2.06 billion and net income of $23.5 million, or $0.48 per diluted
share, last year. Last fiscal year’s results included net sales of
$91.8 million and a net loss of $(1.14) per diluted share
associated with the Wilsons Leather and G.H. Bass store
operations.
For the third quarter of the current 2022 fiscal year, we expect
net sales of approximately $1.00 billion and net income between
$80.0 million and $90.0 million or $1.65 and $1.75 per diluted
share. This compares to net sales of $826.6 million and net income
of $63.2 million or $1.29 per diluted share in last year’s third
quarter. The results for last year’s third quarter included net
sales of $38.2 million and a net loss per diluted share of $(0.25)
associated with the Wilsons Leather and G.H. Bass store
operations.
About G-III Apparel Group,
Ltd.
G-III designs, sources and markets apparel and accessories under
owned, licensed and private label brands. G-III’s substantial
portfolio of more than 30 licensed and proprietary brands is
anchored by five global power brands: DKNY, Donna Karan, Calvin
Klein, Tommy Hilfiger and Karl Lagerfeld Paris. G-III’s owned
brands include DKNY, Donna Karan, Vilebrequin, G.H. Bass, Eliza J,
Jessica Howard, Andrew Marc and Marc New York. G-III has fashion
licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld
Paris, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi's and
Dockers brands. Through its team sports business, G-III has
licenses with the National Football League, National Basketball
Association, Major League Baseball, National Hockey League and over
150 U.S. colleges and universities. G-III also distributes directly
to consumers through its DKNY, Karl Lagerfeld Paris and Vilebrequin
stores and its digital channels for the DKNY, Donna Karan,
Vilebrequin, Karl Lagerfeld Paris, Andrew Marc, Wilsons Leather and
G.H. Bass brands.
Statements concerning G-III's business outlook or future
economic performance, anticipated revenues, expenses or other
financial items; product introductions and plans and objectives
related thereto; and statements concerning assumptions made or
expectations as to any future events, conditions, performance or
other matters are "forward-looking statements" as that term is
defined under the Federal Securities laws. Forward-looking
statements are subject to risks, uncertainties and factors which
include, but are not limited to, risks related to the COVID-19
outbreak, reliance on licensed product, reliance on foreign
manufacturers, risks of doing business abroad, the current economic
and credit environment, risks related to our indebtedness, the
nature of the apparel industry, including changing customer demand
and tastes, customer concentration, seasonality, risks of operating
a retail business, risks related to G-III’s ability to reduce the
losses incurred in its retail operations, customer acceptance of
new products, the impact of competitive products and pricing,
dependence on existing management, possible disruption from
acquisitions, the impact on G-III’s business of the imposition of
tariffs by the United States government and business and general
economic conditions, as well as other risks detailed in G-III's
filings with the Securities and Exchange Commission. G-III assumes
no obligation to update the information in this release.
G-III APPAREL GROUP, LTD. AND
SUBSIDIARIES
(Nasdaq: GIII)
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share
amounts)
Three Months Ended July
31,
Six Months Ended July
31,
2021
2020
2021
2020
(Unaudited)
Net sales
$
483,081
$
297,212
$
1,002,991
$
702,343
Cost of goods sold
290,203
162,519
614,644
443,249
Gross profit
192,878
134,693
388,347
259,094
Selling, general and administrative
expenses
146,840
122,102
288,443
276,722
Depreciation and amortization
7,098
9,691
14,142
19,558
Asset impairments, net of gain on lease
modifications
—
14,302
—
17,489
Operating profit (loss)
38,940
(11,402
)
85,762
(54,675
)
Other income (loss)
1,975
1,943
3,795
(113
)
Interest and financing charges, net
(12,574
)
(9,177
)
(24,578
)
(19,556
)
Income (loss) before income taxes
28,341
(18,636
)
64,979
(74,344
)
Income tax expense (benefit)
9,235
(3,660
)
19,494
(20,073
)
Net income (loss)
19,106
(14,976
)
$
45,485
$
(54,271
)
Less: Loss attributable to noncontrolling
interests
(62
)
—
(4
)
—
Net income (loss) attributable to G-III
Apparel Group, Ltd.
$
19,168
$
(14,976
)
45,489
(54,271
)
Net income (loss) attributable to G-III
Apparel Group, Ltd. per common share:
Basic
$
0.40
$
(0.31
)
$
0.94
$
(1.13
)
Diluted
$
0.39
$
(0.31
)
$
0.92
$
(1.13
)
Weighted average shares outstanding:
Basic
48,476
48,214
48,427
48,121
Diluted
49,523
48,214
49,502
48,121
Selected Balance Sheet Data (in
thousands):
At July 31,
2021
2020
(Unaudited)
Cash and cash equivalents
$
509,988
$
252,798
Working capital
976,289
701,305
Inventories
499,337
574,767
Total assets
2,553,586
2,269,814
Long-term debt
517,641
408,720
Operating lease liabilities
190,238
231,983
Total stockholders' equity
1,380,612
1,237,749
SELECT STATEMENT OF OPERATIONS
DATA OF WILSONS LEATHER AND G.H. BASS STORES
(In thousands, except per share
amounts)
Three Months Ended
Fiscal Year Ended
April 30,
July 31,
October 31,
January 31,
January 31,
2020
2020
2020
2021
2021
(Unaudited)
Net sales
$
19,293
$
19,667
$
38,175
$
14,713
$
91,848
Operating loss
(21,237
)
(35,128
)
(17,408
)
(10,881
)
(84,654
)
Operating loss before income taxes
(21,237
)
(35,128
)
(17,408
)
(10,881
)
(84,654
)
Operating loss, net of taxes
$
(14,980
)
$
(25,643
)
$
(12,005
)
$
(8,615
)
$
(55,739
)
Operating loss per common share:
Basic
$
(0.31
)
$
(0.53
)
$
(0.25
)
$
(0.18
)
$
(1.16
)
Diluted
$
(0.31
)
$
(0.53
)
$
(0.25
)
$
(0.17
)
$
(1.14
)
Three Months Ended
Fiscal Year Ended
April 30,
July 31,
October 31,
January 31,
January 31,
2019
2019
2019
2020
2020
(Unaudited)
Net sales
$
52,589
$
53,596
$
59,848
$
85,478
$
251,511
Operating loss
(10,264
)
(8,585
)
(5,588
)
(17,459
)
(41,896
)
Operating loss before income taxes
(10,264
)
(8,585
)
(5,588
)
(17,459
)
(41,896
)
Operating loss, net of taxes
$
(5,458
)
$
(6,267
)
$
(4,068
)
$
(15,903
)
$
(31,696
)
Operating loss per common share:
Basic
$
(0.11
)
$
(0.13
)
$
(0.09
)
$
(0.33
)
$
(0.66
)
Diluted
$
(0.11
)
$
(0.13
)
$
(0.08
)
$
(0.33
)
$
(0.65
)
The tables above reflect the four wall operations of Wilsons
Leather and G.H. Bass stores, which are included in the
consolidated operating results of the Company. As part of our
retail restructuring, we closed these stores. The results for this
portion of our retail operations segment include impairment
charges, but do not include any allocated corporate overhead
charges, shared administrative expenses or shared distribution
center expenses. Corporate overhead charges, shared administrative
expenses and shared distribution center expenses have been excluded
as these expenses will continue to be incurred by the Company
notwithstanding the restructuring of its retail operations segment.
The Company continues to evaluate to what extent these expenses
might be able to be reduced now that the restructuring has been
completed. No interest expense has been allocated in calculating
these operating results. The tax rates used assume the same overall
effective rate that is reflected in the Company’s consolidated
financial statements for fiscal 2021 and fiscal 2020. The tables
above also reflect the results of operations of the Company’s four
Calvin Klein Performance stores that were closed as part of the
retail restructuring. The operating results of the four Calvin
Klein Performance stores are also included in the consolidated
operating results of the Company.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210902005116/en/
G-III Apparel Group, Ltd.
Company Contact: Priya Trivedi SVP of Investor
Relations and Treasurer (646) 473-5228
Investor Relations Contact: Tom Filandro ICR, Inc. (646) 277-1235
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