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GIII Stock Falls 11% After Q4 Earnings Miss Estimates & Sales Dip Y/Y
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Key Takeaways
GIII reported Q4 EPS of 30 cents and sales of $771.5M, both missing estimates.
GIII sales fell 8.1% as Calvin Klein and Tommy Hilfiger license exits hit revenues.
GIII halted Saks shipments before its bankruptcy, recording a $17.5M bad-debt charge.
G-III Apparel Group, Ltd. (GIII - Free Report) has reported drab fourth-quarter fiscal 2026 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Also, the company’s net sales and earnings decreased year over year. The quarterly performance reflected the impact of ongoing portfolio restructuring, external disruptions and the gradual transition away from certain legacy licensed businesses.
During the quarter, sales were pressured as the company continued exiting major licensed brands while shifting focus toward its owned brands such as DKNY, Donna Karan and Karl Lagerfeld. Although these owned brands showed solid consumer demand and strong full-price sell-through, the reduction in revenues from expiring licensing agreements weighed on overall results.
Additionally, results were affected after the company halted shipments to a major wholesale partner ahead of that retailer’s bankruptcy filing. This led to lost sales during the quarter and a related bad-debt expense, which further pressured earnings and contributed to the miss relative to expectations.
Management noted that despite the weaker headline numbers, the company is continuing to invest in brand building, digital capabilities and international expansion to support the long-term growth of its owned brands. However, the combination of earnings and revenue misses, along with the near-term disruption from the retail partner bankruptcy and ongoing business transition, weighed on investor sentiment. As a result, shares of G-III declined 11.4% in yesterday’s trading session.
G-III Apparel Group, LTD. Price, Consensus and EPS Surprise
Adjusted earnings per share (EPS) of 30 cents missed the Zacks Consensus Estimate of 57 cents. Also, the figure decreased 76.4% from the year-earlier quarter’s earnings of $1.27 per share.
Net sales decreased 8.1% year over year to $771.5 million and lagged the consensus estimate of $794 million. Relative to company guidance, sales results were negatively impacted by approximately $20 million due to the suspension of shipments to Saks in December ahead of its bankruptcy filing.
Net sales in the company’s wholesale segment were $737 million, which missed the Zacks Consensus Estimate of $747.1 million. This compares with the $799 million reported in the prior-year period, reflecting a 7.8% decrease. Growth in owned brands and the go-forward license portfolio was offset by lower sales from the Calvin Klein and Tommy Hilfiger licensed businesses.
Net sales in the company’s retail segment were $63 million in the fiscal fourth quarter, which met the consensus estimate and compared with $56 million in the prior-year quarter, representing a 12.5% increase. Strong double-digit comparable sales growth was achieved in Karl Lagerfeld Paris, DKNY and Donna Karan.
Insight Into G-III Apparel's Margins & Expenses
Gross profit decreased 13.9% year over year to $285.5 million in the fiscal fourth quarter. Gross margin was 37%, representing a 250-basis point year over year decline, primarily reflecting the negative impact of tariffs — the most significantly affected quarter of the year — partially offset by a favorable shift toward higher full-price sales. The wholesale segment’s gross margin was 34.8%, down 330 basis points year over year. The retail segment’s gross margin was 46.3% compared with 48.3% in the prior-year period, representing a 200-basis point decline.
Adjusted SG&A expenses totaled $260 million in the fiscal fourth quarter, reflecting a 6.6% increase. The quarter included a $17.5 million bad debt expense associated with the Saks bankruptcy, which resulted in SG&A expenses exceeding planned levels. As a percentage of net sales, this metric increased 470 bps year over year to 33.7%.
G-III Apparel ended the fiscal fourth quarter with cash and cash equivalents of $406.7 million and long-term debt of $11.7 million. Total stockholders’ equity was $1.76 billion. Inventory increased 3.8% year over year to $460 million at the end of the quarter.
Shareholders received $54 million in capital returns during fiscal 2026, including $49.8 million from share repurchases and $4.2 million distributed as dividends.
GIII’s Q1 Outlook
The company expects net sales of approximately $530 million for the first quarter of fiscal 2027, compared with $583.6 million in the first quarter of fiscal 2026, representing an expected 9.2% decline year over year.
The company anticipates a net loss between $13 million and $18 million, or 30 cents to 40 cents per share, in contrast to net income of $7.8 million, or 19 cents, in the first quarter of fiscal 2026.
Gross margin for the fiscal first quarter is expected to increase approximately 150 bps year over year. SG&A expenses are expected to be higher due to increased marketing spending associated with the timing of the company’s spring marketing initiatives. The company also expects the largest degree of SG&A expense deleverage in the fiscal first quarter, with improvement anticipated sequentially throughout the remainder of the year.
G-III Apparel’s FY27 Guidance
For fiscal 2027, the company expects net sales of approximately $2.71 billion, representing an 8% decline compared with fiscal 2026. The decrease primarily reflects approximately $470 million in lost sales from Calvin Klein and Tommy Hilfiger products, partially offset by expected high single-digit growth in the company’s go-forward portfolio.
Net income for fiscal 2027 is expected to be between $88 million and $92 million, with EPS of $2.00 to $2.10. This compares with net income of $67.4 million, or $1.51 per share, in fiscal 2026, representing an expected 30.6-36.5% increase in net income and a 32.5-39.1% rise in EPS year over year.
Adjusted net income is also expected to be between $88 million and $92 million, with adjusted EPS of $2.00 to $2.10. This compares with adjusted net income of $116.2 million, or $2.61 per share, in fiscal 2026. This implies an expected 20.8-24.3% decline in adjusted net income and a 19.5-23.4% decrease in adjusted EPS year over year.
Adjusted EBITDA is anticipated to be between $158 million and $162 million, compared with $192.4 million in fiscal 2026, representing an expected 15.6-17.7% decline.
GIII Stock Past Three-Month Performance
Image Source: Zacks Investment Research
The company expects up to 300 basis points of gross margin improvement for the full fiscal year, supported by tariff mitigation efforts as tariff impacts are lapped in the second half of the year. Margins are also expected to benefit from a higher mix of owned brands, as a significant portion of the PVH licenses roll off during the year. Sales declines are expected to be more pronounced in the first half of the year, with improvement in the second half as several new brand licenses begin to scale.
With respect to SG&A, the company expects expense deleverage for the full fiscal year as investments continue in people, technology and marketing, while revenues are impacted by the loss of Calvin Klein and Tommy Hilfiger sales. However, the company has identified cost-saving initiatives expected to generate approximately $25 million in run-rate savings by fiscal 2028.
For fiscal 2027, the company expects capital expenditures of approximately $40 million. The company’s guidance does not include any anticipated share repurchases. Despite lower expected earnings compared with fiscal 2026, the business is expected to remain strongly cash generative, with healthy free cash flow generation anticipated to further strengthen the company’s financial position.
Shares of this Zacks Rank #4 (Sell) company have lost 17.7% in the past three months compared with the industry’s 2.4% decline.
FIGS is a direct-to-consumer healthcare apparel and lifestyle brand, and it currently flaunts a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 187.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FIGS’s current financial-year sales indicates growth of 11.4% from the year-ago reported number.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It sports a Zacks Rank #1 at present.
The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 8.5% and 8.9%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.9%.
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Boot Barn’s current fiscal earnings and sales implies growth of 26% and 17.7%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 4.9%.
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GIII Stock Falls 11% After Q4 Earnings Miss Estimates & Sales Dip Y/Y
Key Takeaways
G-III Apparel Group, Ltd. (GIII - Free Report) has reported drab fourth-quarter fiscal 2026 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Also, the company’s net sales and earnings decreased year over year. The quarterly performance reflected the impact of ongoing portfolio restructuring, external disruptions and the gradual transition away from certain legacy licensed businesses.
During the quarter, sales were pressured as the company continued exiting major licensed brands while shifting focus toward its owned brands such as DKNY, Donna Karan and Karl Lagerfeld. Although these owned brands showed solid consumer demand and strong full-price sell-through, the reduction in revenues from expiring licensing agreements weighed on overall results.
Additionally, results were affected after the company halted shipments to a major wholesale partner ahead of that retailer’s bankruptcy filing. This led to lost sales during the quarter and a related bad-debt expense, which further pressured earnings and contributed to the miss relative to expectations.
Management noted that despite the weaker headline numbers, the company is continuing to invest in brand building, digital capabilities and international expansion to support the long-term growth of its owned brands. However, the combination of earnings and revenue misses, along with the near-term disruption from the retail partner bankruptcy and ongoing business transition, weighed on investor sentiment. As a result, shares of G-III declined 11.4% in yesterday’s trading session.
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 Q4 Results
Adjusted earnings per share (EPS) of 30 cents missed the Zacks Consensus Estimate of 57 cents. Also, the figure decreased 76.4% from the year-earlier quarter’s earnings of $1.27 per share.
Net sales decreased 8.1% year over year to $771.5 million and lagged the consensus estimate of $794 million. Relative to company guidance, sales results were negatively impacted by approximately $20 million due to the suspension of shipments to Saks in December ahead of its bankruptcy filing.
Net sales in the company’s wholesale segment were $737 million, which missed the Zacks Consensus Estimate of $747.1 million. This compares with the $799 million reported in the prior-year period, reflecting a 7.8% decrease. Growth in owned brands and the go-forward license portfolio was offset by lower sales from the Calvin Klein and Tommy Hilfiger licensed businesses.
Net sales in the company’s retail segment were $63 million in the fiscal fourth quarter, which met the consensus estimate and compared with $56 million in the prior-year quarter, representing a 12.5% increase. Strong double-digit comparable sales growth was achieved in Karl Lagerfeld Paris, DKNY and Donna Karan.
Insight Into G-III Apparel's Margins & Expenses
Gross profit decreased 13.9% year over year to $285.5 million in the fiscal fourth quarter. Gross margin was 37%, representing a 250-basis point year over year decline, primarily reflecting the negative impact of tariffs — the most significantly affected quarter of the year — partially offset by a favorable shift toward higher full-price sales. The wholesale segment’s gross margin was 34.8%, down 330 basis points year over year. The retail segment’s gross margin was 46.3% compared with 48.3% in the prior-year period, representing a 200-basis point decline.
Adjusted SG&A expenses totaled $260 million in the fiscal fourth quarter, reflecting a 6.6% increase. The quarter included a $17.5 million bad debt expense associated with the Saks bankruptcy, which resulted in SG&A expenses exceeding planned levels. As a percentage of net sales, this metric increased 470 bps year over year to 33.7%.
GIII’s Financial Snapshot: Cash, Debt & Equity Overview
G-III Apparel ended the fiscal fourth quarter with cash and cash equivalents of $406.7 million and long-term debt of $11.7 million. Total stockholders’ equity was $1.76 billion. Inventory increased 3.8% year over year to $460 million at the end of the quarter.
Shareholders received $54 million in capital returns during fiscal 2026, including $49.8 million from share repurchases and $4.2 million distributed as dividends.
GIII’s Q1 Outlook
The company expects net sales of approximately $530 million for the first quarter of fiscal 2027, compared with $583.6 million in the first quarter of fiscal 2026, representing an expected 9.2% decline year over year.
The company anticipates a net loss between $13 million and $18 million, or 30 cents to 40 cents per share, in contrast to net income of $7.8 million, or 19 cents, in the first quarter of fiscal 2026.
Gross margin for the fiscal first quarter is expected to increase approximately 150 bps year over year. SG&A expenses are expected to be higher due to increased marketing spending associated with the timing of the company’s spring marketing initiatives. The company also expects the largest degree of SG&A expense deleverage in the fiscal first quarter, with improvement anticipated sequentially throughout the remainder of the year.
G-III Apparel’s FY27 Guidance
For fiscal 2027, the company expects net sales of approximately $2.71 billion, representing an 8% decline compared with fiscal 2026. The decrease primarily reflects approximately $470 million in lost sales from Calvin Klein and Tommy Hilfiger products, partially offset by expected high single-digit growth in the company’s go-forward portfolio.
Net income for fiscal 2027 is expected to be between $88 million and $92 million, with EPS of $2.00 to $2.10. This compares with net income of $67.4 million, or $1.51 per share, in fiscal 2026, representing an expected 30.6-36.5% increase in net income and a 32.5-39.1% rise in EPS year over year.
Adjusted net income is also expected to be between $88 million and $92 million, with adjusted EPS of $2.00 to $2.10. This compares with adjusted net income of $116.2 million, or $2.61 per share, in fiscal 2026. This implies an expected 20.8-24.3% decline in adjusted net income and a 19.5-23.4% decrease in adjusted EPS year over year.
Adjusted EBITDA is anticipated to be between $158 million and $162 million, compared with $192.4 million in fiscal 2026, representing an expected 15.6-17.7% decline.
GIII Stock Past Three-Month Performance
Image Source: Zacks Investment Research
The company expects up to 300 basis points of gross margin improvement for the full fiscal year, supported by tariff mitigation efforts as tariff impacts are lapped in the second half of the year. Margins are also expected to benefit from a higher mix of owned brands, as a significant portion of the PVH licenses roll off during the year. Sales declines are expected to be more pronounced in the first half of the year, with improvement in the second half as several new brand licenses begin to scale.
With respect to SG&A, the company expects expense deleverage for the full fiscal year as investments continue in people, technology and marketing, while revenues are impacted by the loss of Calvin Klein and Tommy Hilfiger sales. However, the company has identified cost-saving initiatives expected to generate approximately $25 million in run-rate savings by fiscal 2028.
For fiscal 2027, the company expects capital expenditures of approximately $40 million. The company’s guidance does not include any anticipated share repurchases. Despite lower expected earnings compared with fiscal 2026, the business is expected to remain strongly cash generative, with healthy free cash flow generation anticipated to further strengthen the company’s financial position.
Shares of this Zacks Rank #4 (Sell) company have lost 17.7% in the past three months compared with the industry’s 2.4% decline.
Key Picks
Some better-ranked stocks are FIGS Inc. (FIGS - Free Report) , Deckers Outdoor Corporation (DECK - Free Report) and Boot Barn Holdings, Inc. (BOOT - Free Report) .
FIGS is a direct-to-consumer healthcare apparel and lifestyle brand, and it currently flaunts a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 187.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FIGS’s current financial-year sales indicates growth of 11.4% from the year-ago reported number.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It sports a Zacks Rank #1 at present.
The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 8.5% and 8.9%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.9%.
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Boot Barn’s current fiscal earnings and sales implies growth of 26% and 17.7%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 4.9%.