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G-III Apparel Group, Ltd. (GIII - Free Report) posted mixed second-quarter fiscal 2023 results, wherein the top line beat the Zacks Consensus Estimate, while the bottom line missed the same. Also, revenues grew year over year, while earnings dipped. Quarterly results were hurt by inflationary pressures and higher costs in areas like warehousing, transportation and raw materials.
Shares of this apparel and accessories designer have dipped 5.6% during the trading hours on Sept. 7. Over the past three months, the presently Zacks Rank #4 (Sell) player has decreased 23.4% compared with the industry’s 6.2% decline.
Nonetheless, management is focused on regulating the business and expanding its market share. G-III Apparel’s order book remains solid and it is well positioned for the fall season. GIII remains committed to driving its power brands across categories, including its focus on its own brands.
Management has been maximizing its omni-channel opportunities and leveraging data for a while. It has been working to boost demand on its own and drive retail partners' digital platforms as well as expand its pure play presence.
Q2 in Detail
G-III Apparel delivered adjusted earnings per share of 39 cents, lagging the Zacks Consensus Estimate of 47 cents. Also, the reported figure dipped 4.9% from the year-ago quarter’s reading.
Image Source: Zacks Investment Research
Net sales jumped 25% from the last fiscal year’s quarterly figure to $605.2 million and came above the Zacks Consensus Estimate of $591 million. The top-line outperformance can be attributed to a healthy sales performance at the Wholesale and Retail divisions.
Management concluded its earlier-announced acquisition of the remaining 81% of the Karl Lagerfeld brand, thus enhancing its global reach. GIII witnessed significant year-over-year sales increases across its power brands.
GIII’s new DKNY and Karl Lagerfeld websites have better technical operations to allow seamless navigation and provide immersive brand content. Karl Lagerfeld Europe has a robust digital business. Vilebrequin also had a solid fiscal second quarter.
Gross profit increased 18.7% year over year to $228.9 million. However, gross margin of 37.8% contracted 210 basis points (bps) from the prior-year period’s reading, mainly due to inflationary increases in costs and elevated freight expenses, somewhat offset by higher prices.
SG&A expenses grew 30.1% year over year to $191 million. G-III Apparel reported an operating income of $31.3 million, down 19.5% from the year-ago fiscal quarter’s number.
Segmental Performance
Net sales at the Wholesale segment were $588 million, up 26% from the year-earlier quarter’s figure. However, the segment’s gross margin declined nearly 210 bps from the year-ago quarter’s level to 36.2%.
Net sales at the Retail segment totaled $31 million, up 14% from the prior-year fiscal quarter’s level. However, the segment’s gross margin fell 30 bps from the year-earlier fiscal quarter’s tally to 51.6%.
Financial Details
G-III Apparel ended the fiscal second quarter with cash and cash equivalents of $151 million and a total debt of $575.8 million. Total stockholders’ equity was $1,584 million. Inventories increased significantly to $1,040.8 million at the end of the reported fiscal quarter from $499.3 million at the end of the year-ago fiscal quarter.
Management also repurchased roughly 800,000 shares for $17 million. GIII had cash and availability under the credit agreement of above $730 million at the end of the reported fiscal quarter.
Outlook
Management updated guidance for fiscal 2023, which takes into account the anticipated impact from the ongoing inflationary pressures on consumers and higher costs related to supply- chain conditions, including the timing of receipts of goods.
For fiscal 2023, management now projects net sales of $3.15 billion and a net income of $182-$187 million or $3.69-$3.79 per share. Adjusted net income is anticipated in the bracket of $177-$182 million or $3.60-$3.70 per share. Earlier, management forecast net sales of $3.24 billion and a net income of $205-$215 million or $4.23-$4.33 per share.
GIII recorded net sales of $2.77 billion and a net income of $200.6 million or $4.05 per share in the last fiscal year. GIII recorded an adjusted net income of $207.9 million or $4.20 per share in fiscal 2022.
Management predicts an adjusted EBITDA between $318 million and $323 million, indicating a decline from an adjusted EBITDA of $350.2 million reported in fiscal 2022.
For the fiscal third quarter, GIII expects net sales of $1.07 billion, higher than $1.02 billion recorded in the same period last year. Net income for the fiscal third quarter is envisioned in the range $83-$88 million or $1.70-$1.80 per share. This indicates a decline from the net income of $106.7 million or $2.16 per share in the year-ago period.
Adjusted net income for the fiscal quarter is anticipated in the band of $87-$92 million or $1.80-$1.90 per share. In the year-earlier fiscal quarter, GIII delivered an adjusted net income of $107.9 million or $2.18 per share.
Eye These Solid Picks
Here we highlighted three better-ranked stocks, namely Designer Brands (DBI - Free Report) , Oxford Industries (OXM - Free Report) and lululemon athletica (LULU - Free Report) .
The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and EPS suggests growth of 6.9% and 23.5%, respectively, from the corresponding previous fiscal year’s reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.
Oxford Industries is a renowned apparel company and currently has a Zacks Rank #2 (Buy). OXM has a trailing four-quarter earnings surprise of 91.1%, on average.
The Zacks Consensus Estimate for Oxford Industries’ current financial-year revenues and EPS suggests growth of 15.3% and 25.7%, respectively, from the corresponding earlier fiscal year’s reported figures.
lululemon, the designer and distributor of athletic apparel and accessories, carries a Zacks Rank of 2. LULU has an expected EPS growth rate of 20% for three-five years.
The Zacks Consensus Estimate for lululemon’s current financial-year sales and EPS suggests growth of 26.6% and 25.9%, respectively, from the comparable preceding fiscal year’s reported numbers. LULU has a trailing four-quarter earnings surprise of 10.4%, on average.
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G-III Apparel's (GIII) Q2 Earnings Miss, Sales Increase Y/Y
G-III Apparel Group, Ltd. (GIII - Free Report) posted mixed second-quarter fiscal 2023 results, wherein the top line beat the Zacks Consensus Estimate, while the bottom line missed the same. Also, revenues grew year over year, while earnings dipped. Quarterly results were hurt by inflationary pressures and higher costs in areas like warehousing, transportation and raw materials.
Shares of this apparel and accessories designer have dipped 5.6% during the trading hours on Sept. 7. Over the past three months, the presently Zacks Rank #4 (Sell) player has decreased 23.4% compared with the industry’s 6.2% decline.
Nonetheless, management is focused on regulating the business and expanding its market share. G-III Apparel’s order book remains solid and it is well positioned for the fall season. GIII remains committed to driving its power brands across categories, including its focus on its own brands.
Management has been maximizing its omni-channel opportunities and leveraging data for a while. It has been working to boost demand on its own and drive retail partners' digital platforms as well as expand its pure play presence.
Q2 in Detail
G-III Apparel delivered adjusted earnings per share of 39 cents, lagging the Zacks Consensus Estimate of 47 cents. Also, the reported figure dipped 4.9% from the year-ago quarter’s reading.
Image Source: Zacks Investment Research
Net sales jumped 25% from the last fiscal year’s quarterly figure to $605.2 million and came above the Zacks Consensus Estimate of $591 million. The top-line outperformance can be attributed to a healthy sales performance at the Wholesale and Retail divisions.
Management concluded its earlier-announced acquisition of the remaining 81% of the Karl Lagerfeld brand, thus enhancing its global reach. GIII witnessed significant year-over-year sales increases across its power brands.
GIII’s new DKNY and Karl Lagerfeld websites have better technical operations to allow seamless navigation and provide immersive brand content. Karl Lagerfeld Europe has a robust digital business. Vilebrequin also had a solid fiscal second quarter.
Gross profit increased 18.7% year over year to $228.9 million. However, gross margin of 37.8% contracted 210 basis points (bps) from the prior-year period’s reading, mainly due to inflationary increases in costs and elevated freight expenses, somewhat offset by higher prices.
SG&A expenses grew 30.1% year over year to $191 million. G-III Apparel reported an operating income of $31.3 million, down 19.5% from the year-ago fiscal quarter’s number.
Segmental Performance
Net sales at the Wholesale segment were $588 million, up 26% from the year-earlier quarter’s figure. However, the segment’s gross margin declined nearly 210 bps from the year-ago quarter’s level to 36.2%.
Net sales at the Retail segment totaled $31 million, up 14% from the prior-year fiscal quarter’s level. However, the segment’s gross margin fell 30 bps from the year-earlier fiscal quarter’s tally to 51.6%.
Financial Details
G-III Apparel ended the fiscal second quarter with cash and cash equivalents of $151 million and a total debt of $575.8 million. Total stockholders’ equity was $1,584 million. Inventories increased significantly to $1,040.8 million at the end of the reported fiscal quarter from $499.3 million at the end of the year-ago fiscal quarter.
Management also repurchased roughly 800,000 shares for $17 million. GIII had cash and availability under the credit agreement of above $730 million at the end of the reported fiscal quarter.
Outlook
Management updated guidance for fiscal 2023, which takes into account the anticipated impact from the ongoing inflationary pressures on consumers and higher costs related to supply- chain conditions, including the timing of receipts of goods.
For fiscal 2023, management now projects net sales of $3.15 billion and a net income of $182-$187 million or $3.69-$3.79 per share. Adjusted net income is anticipated in the bracket of $177-$182 million or $3.60-$3.70 per share. Earlier, management forecast net sales of $3.24 billion and a net income of $205-$215 million or $4.23-$4.33 per share.
GIII recorded net sales of $2.77 billion and a net income of $200.6 million or $4.05 per share in the last fiscal year. GIII recorded an adjusted net income of $207.9 million or $4.20 per share in fiscal 2022.
Management predicts an adjusted EBITDA between $318 million and $323 million, indicating a decline from an adjusted EBITDA of $350.2 million reported in fiscal 2022.
For the fiscal third quarter, GIII expects net sales of $1.07 billion, higher than $1.02 billion recorded in the same period last year. Net income for the fiscal third quarter is envisioned in the range $83-$88 million or $1.70-$1.80 per share. This indicates a decline from the net income of $106.7 million or $2.16 per share in the year-ago period.
Adjusted net income for the fiscal quarter is anticipated in the band of $87-$92 million or $1.80-$1.90 per share. In the year-earlier fiscal quarter, GIII delivered an adjusted net income of $107.9 million or $2.18 per share.
Eye These Solid Picks
Here we highlighted three better-ranked stocks, namely Designer Brands (DBI - Free Report) , Oxford Industries (OXM - Free Report) and lululemon athletica (LULU - Free Report) .
Designer Brands designs, manufactures, and retails footwear and accessories. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and EPS suggests growth of 6.9% and 23.5%, respectively, from the corresponding previous fiscal year’s reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.
Oxford Industries is a renowned apparel company and currently has a Zacks Rank #2 (Buy). OXM has a trailing four-quarter earnings surprise of 91.1%, on average.
The Zacks Consensus Estimate for Oxford Industries’ current financial-year revenues and EPS suggests growth of 15.3% and 25.7%, respectively, from the corresponding earlier fiscal year’s reported figures.
lululemon, the designer and distributor of athletic apparel and accessories, carries a Zacks Rank of 2. LULU has an expected EPS growth rate of 20% for three-five years.
The Zacks Consensus Estimate for lululemon’s current financial-year sales and EPS suggests growth of 26.6% and 25.9%, respectively, from the comparable preceding fiscal year’s reported numbers. LULU has a trailing four-quarter earnings surprise of 10.4%, on average.