G-III Apparel Group, Ltd. Reports First Quarter Fiscal 2027 Results and Raises Earnings Guidance
Net Sales of$536 Million , Ahead of Guidance- Net Income Per Diluted Share of
$1.50 Compared to$0.17 Last Year - Non-GAAP Net Loss Per Share of (
$0.21 ), Ahead of Guidance - Raises GAAP and Non-GAAP Net Income Guidance for Fiscal 2027
- Marc Jacobs Transaction to Accelerate G-III’s Growth Transformation
Results of Operations
First Quarter Fiscal 2027
Net sales for the first quarter ended
Gross margin increased 2,270 basis points to 64.9%, compared to 42.2% in the first quarter of last year. This increase includes a
Net income for the first quarter ended
Non-GAAP net income (loss) per share for the first quarter ended
Balance Sheet as of First Quarter Fiscal 2027
Cash and cash equivalents were
Inventories decreased 8% to
Capital return to shareholders of
Outlook
The Company today increased its outlook for the fiscal year ending
The Company’s updated outlook assumes that tariffs for the remainder of the year will approximate those rates that existed under the IEEPA tariff regime. Additionally, the Company’s outlook does not include any impact related to its pending transaction to acquire Marc Jacobs.
Fiscal 2027
Net sales for fiscal 2027 are expected to be approximately
Net income is expected to be between
Non-GAAP net income is expected to be between
Adjusted EBITDA is expected to be between
Net interest income is expected to be approximately
Tax rate is estimated to be approximately 30.0% for GAAP purposes and 33.5% for non-GAAP purposes. The tax rate for non-GAAP purposes is higher than our previous estimate as a result of higher non-deductible expenses.
Second Quarter Fiscal 2027
Net sales for the second quarter of fiscal 2027 are expected to be approximately
Net income for the second quarter of fiscal 2027 is expected to be between
Non-GAAP net income for the second quarter of fiscal 2027 is expected to be between
Conference Call Information
The Company will host a conference call to discuss its first quarter results at
Non-GAAP Financial Measures
Reconciliations of GAAP gross profit to non-GAAP gross profit, GAAP net income to non-GAAP net income (loss), GAAP net income per diluted share to non-GAAP net income (loss) per diluted share and GAAP net income to adjusted EBITDA are presented in tables accompanying the financial statements included in this release and provide useful information to evaluate the Company’s operational performance. A description of the amounts excluded on a non-GAAP basis are provided in conjunction with these tables. Non-GAAP gross profit, non-GAAP net income (loss), non-GAAP net income (loss) per diluted share and adjusted EBITDA should be evaluated in light of the Company’s financial statements prepared in accordance with GAAP.
About
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 relating to completing the proposed acquisition of the Marc Jacobs brand in the anticipated time frame, or at all, risks relating to the ability to realize the anticipated benefits of the proposed acquisition, risks relating to the receipt of regulatory approvals without unexpected delays or conditions and possibility of regulatory action, risks relating to significant costs related to the proposed acquisition, the expected financial and operating performance and future opportunities following the consummation of the proposed acquisition, risks related to the reliance on licensed product, risks relating to G-III’s ability to increase revenues from sales of its other products, new acquired businesses or new license agreements as licenses for
| (Nasdaq: GIII) | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (In thousands, except per share amounts) | ||||||||
| Three Months Ended |
||||||||
| 2026 |
2025 |
|||||||
| (Unaudited) | ||||||||
| Net sales | $ | 535,962 | $ | 583,609 | ||||
| Cost of goods sold | 188,216 | 337,065 | ||||||
| Gross profit | 347,746 | 246,544 | ||||||
| Selling, general and administrative expenses | 255,323 | 231,495 | ||||||
| Depreciation and amortization | 7,188 | 6,573 | ||||||
| Operating profit | 85,235 | 8,476 | ||||||
| Other income (loss) | (802 | ) | 3,462 | |||||
| Interest and financing charges, net | 1,174 | (461 | ) | |||||
| Income before income taxes | 85,607 | 11,477 | ||||||
| Income tax expense | 19,073 | 3,718 | ||||||
| Net income | $ | 66,534 | $ | 7,759 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 1.58 | $ | 0.18 | ||||
| Diluted | $ | 1.50 | $ | 0.17 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 42,189 | 43,748 | ||||||
| Diluted | 44,394 | 45,385 | ||||||
| Selected Balance Sheet Data (in thousands): | As of |
|||||
| 2026 | 2025 | |||||
| (Unaudited) | ||||||
| Cash and cash equivalents | $ | 394,220 | $ | 257,785 | ||
| Working capital | 990,542 | 817,509 | ||||
| Inventories | 417,856 | 456,482 | ||||
| Total assets | 2,584,985 | 2,415,873 | ||||
| Total debt | 15,407 | 18,742 | ||||
| Operating lease liabilities | 278,158 | 269,922 | ||||
| Total stockholders' equity | 1,824,125 | 1,684,094 | ||||
| RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT | |||||||
| Three Months Ended |
|||||||
| 2026 |
2025 | ||||||
| (In thousands, unaudited) | |||||||
| GAAP gross profit | $ | 347,746 | $ | 246,544 | |||
| Excluded from non-GAAP: | |||||||
| IEEPA tariff refund receivable | (102,681 | ) | — | ||||
| Non-GAAP gross profit, as defined | $ | 245,065 | $ | 246,544 | |||
| Three Months Ended |
||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| GAAP gross profit percentage | 64.9 | % | 42.2 | % | ||||
| Excluded from non-GAAP: | ||||||||
| IEEPA tariff refund receivable | (19.2 | ) | — | |||||
| Non-GAAP gross profit percentage, as defined | 45.7 | % | 42.2 | % | ||||
Non-GAAP gross profit and gross profit percentage are “non-GAAP financial measures” that exclude in fiscal 2027, the benefit recognized in connection with the expected recovery of previously incurred tariffs imposed under the IEEPA on inventory sold in the prior year included in cost of goods sold. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses these non-GAAP financial measures to assess our performance on a comparative basis and believes that they are also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
| RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (LOSS) | ||||||||
| (In thousands) | ||||||||
| Three Months Ended | ||||||||
| (Unaudited) | ||||||||
| GAAP net income | $ | 66,534 | $ | 7,759 | ||||
| Excluded from non-GAAP: | ||||||||
| IEEPA tariff refund receivable | (102,681 | ) | — | |||||
| Expenses related to Marc Jacobs acquisition | 3,400 | — | ||||||
| One-time warehouse related severance expenses | — | 978 | ||||||
| Income tax impact of non-GAAP adjustments | 24,007 | (316 | ) | |||||
| Non-GAAP net income (loss), as defined | $ | (8,740 | ) | $ | 8,421 | |||
Non-GAAP net income (loss) is a “non-GAAP financial measure” that excludes (i) in fiscal 2027, the benefit recognized in connection with the expected recovery of previously incurred tariffs imposed under the IEEPA on inventory sold in the prior year included in cost of goods sold, (ii) in fiscal 2027, expenses related to the Marc Jacobs transaction primarily related to professional fees and (iii) in fiscal 2026, one-time severance expenses related to a closed warehouse. For fiscal 2027, the income tax impact of non-GAAP adjustments is calculated using the applicable statutory tax rate for the respective period. For fiscal 2026, the income tax impact of non-GAAP adjustments is calculated using the effective tax rate for the period. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses these non-GAAP financial measures to assess our performance on a comparative basis and believes that they are also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
| RECONCILIATION OF GAAP NET INCOME PER SHARE TO NON-GAAP NET INCOME (LOSS) PER SHARE | ||||||||
| Three Months Ended | ||||||||
| (Unaudited) | ||||||||
| GAAP diluted net income per common share | $ | 1.50 | $ | 0.17 | ||||
| Adjustment from GAAP diluted shares to Non-GAAP diluted shares (1) | 0.08 | — | ||||||
| Excluded from non-GAAP: | ||||||||
| IEEPA tariff refund receivable | (2.43 | ) | — | |||||
| Expenses related to Marc Jacobs acquisition | 0.08 | — | ||||||
| One-time warehouse related severance expenses | — | 0.03 | ||||||
| Income tax impact of non-GAAP adjustments | 0.56 | (0.01 | ) | |||||
| Non-GAAP diluted net income (loss) per common share, as defined | $ | (0.21 | ) | $ | 0.19 | |||
| Non-GAAP diluted shares (1) | 42,189 | 45,385 | ||||||
| (1) | Represents adjustment for shares used to calculate diluted earnings per share. Due to our recording GAAP net income for the first quarter of fiscal 2027, GAAP diluted net income per share includes the impact of potential dilutive common shares. When applying non-GAAP exclusions, results move from a net income position to a net loss wherein net loss per share excludes the impact of potential dilutive common shares. |
Non-GAAP diluted net income (loss) per common share is a “non-GAAP financial measure” that excludes (i) in fiscal 2027, the benefit recognized in connection with the expected recovery of previously incurred tariffs imposed under the IEEPA on inventory sold in the prior year included in cost of goods sold, (ii) in fiscal 2027, expenses related to the Marc Jacobs transaction primarily related to professional fees and (iii) in fiscal 2026, one-time severance expenses related to a closed warehouse. For fiscal 2027, the income tax impact of non-GAAP adjustments is calculated using the applicable statutory tax rate for the respective period. For fiscal 2026, the income tax impact of non-GAAP adjustments is calculated using the effective tax rate for the period. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses these non-GAAP financial measures to assess our performance on a comparative basis and believes that they are also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
| RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | ||||||||||||||
| (In thousands) | ||||||||||||||
| Forecasted Twelve | Actual Twelve | |||||||||||||
| Three Months Ended | Months Ending | Months Ended | ||||||||||||
| (Unaudited) | ||||||||||||||
| Net income | $ | 66,534 | $ | 7,759 | $ | 171,000 - 175,000 | $ | 67,353 | ||||||
| IEEPA tariff refund receivable | (102,681 | ) | — | (102,681 | ) | — | ||||||||
| Expenses related to Marc Jacobs acquisition | 3,400 | — | 3,400 | — | ||||||||||
| Asset impairments | — | — | — | 48,565 | ||||||||||
| Strategic opportunity related professional fees | — | — | — | 2,282 | ||||||||||
| One-time warehouse related severance expenses | — | 978 | — | 1,327 | ||||||||||
| Depreciation and amortization | 7,188 | 6,573 | 36,500 | 29,016 | ||||||||||
| Interest and financing charges, net | (1,174 | ) | 461 | (2,000 | ) | 508 | ||||||||
| Income tax expense | 19,073 | 3,718 | 71,781 | 43,316 | ||||||||||
| Adjusted EBITDA, as defined | $ | (7,660 | ) | $ | 19,489 | $ | 178,000 - 182,000 | $ | 192,367 | |||||
Adjusted EBITDA is a “non-GAAP financial measure” which represents earnings before depreciation and amortization, interest and financing charges, net and income tax expense and excludes (i) in fiscal 2027, the benefit recognized in connection with the expected recovery of previously incurred tariffs imposed under the IEEPA on inventory sold in the prior year included in cost of goods sold, (ii) in fiscal 2027, expenses related to the Marc Jacobs transaction primarily related to professional fees, (iii) in fiscal 2026, asset impairments, (iv) in fiscal 2026, professional fees related to a potential strategic opportunity that did not come to fruition and (v) in fiscal 2026, one-time severance expenses related to a closed warehouse. Adjusted EBITDA is being presented as a supplemental disclosure because management believes that it is a common measure of operating performance in the apparel industry. Adjusted EBITDA should not be construed as an alternative to net income, as an indicator of the Company’s operating performance, or as an alternative to cash flows from operating activities as a measure of the Company’s liquidity, as determined in accordance with GAAP.
| RECONCILIATION OF FORECASTED AND ACTUAL GAAP NET INCOME TO FORECASTED AND ACTUAL NON-GAAP NET INCOME |
|||||||||||||||
| (In thousands) | |||||||||||||||
| Forecasted Three | Actual Three | Forecasted Twelve | Actual Twelve | ||||||||||||
| Months Ending | Months Ended | Months Ending | Months Ended | ||||||||||||
| (Unaudited) | |||||||||||||||
| Net income | $ | 7,000 - 11,000 | $ | 10,939 | $ | 171,000 - 175,000 | $ | 67,353 | |||||||
| Excluded from non-GAAP: | |||||||||||||||
| IEEPA tariff refund receivable | — | — | (102,681 | ) | — | ||||||||||
| Expenses related to Marc Jacobs acquisition | — | — | 3,400 | — | |||||||||||
| Asset impairments | — | — | — | 48,565 | |||||||||||
| Strategic opportunity related professional fees | — | — | — | 2,282 | |||||||||||
| One-time warehouse related severance expenses | — | 349 | — | 1,327 | |||||||||||
| Income tax impact of non-GAAP adjustments | — | (108 | ) | 23,281 | (3,301 | ) | |||||||||
| Non-GAAP net income, as defined | $ | 7,000 - 11,000 | $ | 11,180 | $ | 95,000 - 99,000 | $ | 116,226 | |||||||
Non-GAAP net income is a “non-GAAP financial measure” that excludes (i) in fiscal 2027, the benefit recognized in connection with the expected recovery of previously incurred tariffs imposed under the IEEPA on inventory sold in the prior year included in cost of goods sold, (ii) in fiscal 2027, expenses related to the Marc Jacobs transaction primarily related to professional fees, (iii) in fiscal 2026, asset impairments, (iv) in fiscal 2026, professional fees related to a potential strategic opportunity that did not come to fruition and (v) in fiscal 2026, one-time severance expenses related to a closed warehouse. The income tax impact of non-GAAP adjustments is calculated using the applicable statutory tax rate for the respective period. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses these non-GAAP financial measures to assess our performance on a comparative basis and believes that they are also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
| RECONCILIATION OF FORECASTED AND ACTUAL GAAP DILUTED NET INCOME PER SHARE TO FORECASTED AND ACTUAL NON-GAAP DILUTED NET INCOME PER SHARE | ||||||||||||||
| Forecasted Three | Actual Three | Forecasted Twelve | Actual Twelve | |||||||||||
| Months Ending | Months Ended | Months Ending | Months Ended | |||||||||||
| (Unaudited) | ||||||||||||||
| GAAP diluted net income per common share | $ | 0.15 - 0.25 | $ | 0.25 | $ | 3.85 - 3.95 | $ | 1.51 | ||||||
| Excluded from non-GAAP: | ||||||||||||||
| IEEPA tariff refund receivable | — | — | (2.32 | ) | — | |||||||||
| Expenses related to Marc Jacobs acquisition | — | — | 0.08 | — | ||||||||||
| Asset impairments | — | — | — | 1.09 | ||||||||||
| Strategic opportunity related professional fees | — | — | — | 0.05 | ||||||||||
| One-time warehouse related severance expenses | — | — | — | 0.03 | ||||||||||
| Income tax impact of non-GAAP adjustments | — | — | 0.54 | (0.07 | ) | |||||||||
| Non-GAAP diluted net income per common share, as defined | $ | 0.15 - 0.25 | $ | 0.25 | $ | 2.15 - 2.25 | $ | 2.61 | ||||||
Non-GAAP diluted net income per common share is a “non-GAAP financial measure” that excludes (i) in fiscal 2027, the benefit recognized in connection with the expected recovery of previously incurred tariffs imposed under the IEEPA on inventory sold in the prior year included in cost of goods sold, (ii) in fiscal 2027, expenses related to the Marc Jacobs transaction primarily related to professional fees, (iii) in fiscal 2026, asset impairments, (iv) in fiscal 2026, professional fees related to a potential strategic opportunity that did not come to fruition and (v) in fiscal 2026, one-time severance expenses related to a closed warehouse. The income tax impact of non-GAAP adjustments is calculated using the applicable statutory tax rate for the respective period. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses these non-GAAP financial measures to assess our performance on a comparative basis and believes that they are also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Investor Relations Contact:
SVP of Investor Relations and Treasurer
IR@g-iii.com
Source: G-III Apparel Group, LTD.