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GIII reported Q1 EPS of $0.19, up 58.3% year over year, with net sales down 4.3% to $583.6 million.
Retail sales rose to $36 million with the gross margin up to 53.5% on merchandising gains and digital growth.
Wholesale sales dropped to $563 million as product mix offset strength in higher-margin owned brands.
G-III Apparel Group, Ltd. (GIII - Free Report) reported first-quarter fiscal 2026 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. The company’s net sales decreased and earnings increased year over year. GIII's wholesale segment experienced a decline in net sales and the metric for the retail segment saw a year-over-year increase.
The first-quarter results were driven by double-digit growth in key owned brands, which largely offset the planned exit of certain licensed businesses. These results reflect strong demand for the company’s brand portfolio and demonstrate effective execution. The company reaffirmed its net sales guidance for fiscal 2026 and is actively working to mitigate the impacts of tariffs.
G-III Apparel Group, LTD. Price, Consensus and EPS Surprise
Adjusted earnings per share (EPS) of 19 cents surpassed the Zacks Consensus Estimate of 12 cents. Also, the bottom line increased 58.3% from the year-earlier quarter’s adjusted EPS of 12 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net sales decreased 4.3% year over year to $583.6 million but beat the consensus estimate of $580 million.
Insight Into G-III Apparel's Margins & Expenses
Gross profit decreased 4.8% year over year to $246.5 million in the fiscal first quarter. We note that the gross margin declined 30 basis points (bps) year over year to 42.2%.
SG&A expenses declined 2.2% year over year to $231.5 million. The year-over-year decrease was primarily attributable to lower advertising expenses in the current quarter, as the prior year included elevated spending related to the relaunch of the Donna Karan brand and DKNY marketing campaigns. Moreover, advertising costs declined due to reduced net sales of licensed products in the current period. As a percentage of net sales, this metric increased 90 bps year over year to 39.7%.
Adjusted EBITDA declined 12.6% year over year to $19.5 million. We note that the adjusted EBITDA margin declined 40 bps year over year to 3.3% in the quarter under review.
GIII’s Segmental Results
The company's wholesale segment reported net sales of $563 million compared with $598 million in the previous-year period. The Zacks Consensus Estimate for the wholesale segment’s net sales was pegged at $567.9 million for the quarter under review. This segment's gross margin was 40.4%, down from 40.9% in the prior-year period. This 50-bps decline was primarily caused by an unfavorable product mix, partially offset by increased sales of the company’s higher-margin owned brands.
The retail segment recorded net sales of $36 million for the quarter, up from $31 million in the prior-year period. The Zacks Consensus Estimate for the retail segment’s net sales was pegged at $30.8 million for the quarter under review. This segment reported a gross margin of 53.5%, an improvement from 47% in the prior-year period. This significant increase was driven by the company’s merchandising and execution initiatives under its retail segment turnaround strategy, along with strong digital sales growth of Donna Karan products, which carry higher average unit retails.
G-III Apparel ended the fiscal first quarter with cash and cash equivalents of $257.8 million and total debt of $18.7 million. Total stockholders’ equity was $1.68 billion. Inventory declined 4.8% year over year to $456.5 million at the end of the quarter.
The company repurchased 807,437 shares for $19.7 million during the fiscal first quarter.
G-III Apparel’s FY26 Guidance
For fiscal 2026, net sales are expected to be $3.14 billion compared with $3.18 billion in fiscal 2025. The company anticipates lower sales in the first half of fiscal 2026 compared with the prior year, with growth expected to accelerate in the second half.
Net sales for the second quarter of fiscal 2026 are projected to be approximately $570 million, down from $644.8 million in the prior-year quarter. This decline is expected due to ongoing supply-chain challenges and timing shifts in certain programs into the second half of the year. Gross margins are expected to be consistent with the prior year's second-quarter gross margin of 42.8%.
Net income for the fiscal second quarter is projected to be between $1 million and $6 million, or earnings per share of 2 cents to 12 cents. This compares with net income of $24.2 million, or 53 cents per share, in the second quarter of fiscal 2025.
Shares of this Zacks Rank #3 (Hold) company have lost 13.2% in the past three months compared with the industry’s 8.9% decline.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. It 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 URBN’s fiscal 2025 earnings and sales implies growth of 21.2% and 8%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 29%.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales indicates growth of 10% and 2.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 57.2%.
Allbirds is a lifestyle brand that uses naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for BIRD’s current financial-year earnings implies growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.
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G-III Apparel Q1 Earnings Beat Estimates, Retail Sales Rise Y/Y
Key Takeaways
G-III Apparel Group, Ltd. (GIII - Free Report) reported first-quarter fiscal 2026 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. The company’s net sales decreased and earnings increased year over year. GIII's wholesale segment experienced a decline in net sales and the metric for the retail segment saw a year-over-year increase.
The first-quarter results were driven by double-digit growth in key owned brands, which largely offset the planned exit of certain licensed businesses. These results reflect strong demand for the company’s brand portfolio and demonstrate effective execution. The company reaffirmed its net sales guidance for fiscal 2026 and is actively working to mitigate the impacts of tariffs.
G-III Apparel Group, LTD. Price, Consensus and EPS Surprise
G-III Apparel Group, LTD. price-consensus-eps-surprise-chart | G-III Apparel Group, LTD. Quote
More on GIII's Q1 Results
Adjusted earnings per share (EPS) of 19 cents surpassed the Zacks Consensus Estimate of 12 cents. Also, the bottom line increased 58.3% from the year-earlier quarter’s adjusted EPS of 12 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net sales decreased 4.3% year over year to $583.6 million but beat the consensus estimate of $580 million.
Insight Into G-III Apparel's Margins & Expenses
Gross profit decreased 4.8% year over year to $246.5 million in the fiscal first quarter. We note that the gross margin declined 30 basis points (bps) year over year to 42.2%.
SG&A expenses declined 2.2% year over year to $231.5 million. The year-over-year decrease was primarily attributable to lower advertising expenses in the current quarter, as the prior year included elevated spending related to the relaunch of the Donna Karan brand and DKNY marketing campaigns. Moreover, advertising costs declined due to reduced net sales of licensed products in the current period. As a percentage of net sales, this metric increased 90 bps year over year to 39.7%.
Adjusted EBITDA declined 12.6% year over year to $19.5 million. We note that the adjusted EBITDA margin declined 40 bps year over year to 3.3% in the quarter under review.
GIII’s Segmental Results
The company's wholesale segment reported net sales of $563 million compared with $598 million in the previous-year period. The Zacks Consensus Estimate for the wholesale segment’s net sales was pegged at $567.9 million for the quarter under review. This segment's gross margin was 40.4%, down from 40.9% in the prior-year period. This 50-bps decline was primarily caused by an unfavorable product mix, partially offset by increased sales of the company’s higher-margin owned brands.
The retail segment recorded net sales of $36 million for the quarter, up from $31 million in the prior-year period. The Zacks Consensus Estimate for the retail segment’s net sales was pegged at $30.8 million for the quarter under review. This segment reported a gross margin of 53.5%, an improvement from 47% in the prior-year period. This significant increase was driven by the company’s merchandising and execution initiatives under its retail segment turnaround strategy, along with strong digital sales growth of Donna Karan products, which carry higher average unit retails.
GIII Stock's Past 3-Month Performance
Image Source: Zacks Investment Research
GIII’s Financial Snapshot: Cash, Debt & Equity Overview
G-III Apparel ended the fiscal first quarter with cash and cash equivalents of $257.8 million and total debt of $18.7 million. Total stockholders’ equity was $1.68 billion. Inventory declined 4.8% year over year to $456.5 million at the end of the quarter.
The company repurchased 807,437 shares for $19.7 million during the fiscal first quarter.
G-III Apparel’s FY26 Guidance
For fiscal 2026, net sales are expected to be $3.14 billion compared with $3.18 billion in fiscal 2025. The company anticipates lower sales in the first half of fiscal 2026 compared with the prior year, with growth expected to accelerate in the second half.
Net sales for the second quarter of fiscal 2026 are projected to be approximately $570 million, down from $644.8 million in the prior-year quarter. This decline is expected due to ongoing supply-chain challenges and timing shifts in certain programs into the second half of the year. Gross margins are expected to be consistent with the prior year's second-quarter gross margin of 42.8%.
Net income for the fiscal second quarter is projected to be between $1 million and $6 million, or earnings per share of 2 cents to 12 cents. This compares with net income of $24.2 million, or 53 cents per share, in the second quarter of fiscal 2025.
Shares of this Zacks Rank #3 (Hold) company have lost 13.2% in the past three months compared with the industry’s 8.9% decline.
Key Picks
Some better-ranked stocks are Urban Outfitters Inc. (URBN - Free Report) , Canada Goose (GOOS - Free Report) and Allbirds Inc. (BIRD - Free Report) .
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. It 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 URBN’s fiscal 2025 earnings and sales implies growth of 21.2% and 8%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 29%.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales indicates growth of 10% and 2.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 57.2%.
Allbirds is a lifestyle brand that uses naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for BIRD’s current financial-year earnings implies growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.