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G-III Apparel Issues Updates on Plans to Fight Coronavirus
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G-III Apparel Group, Ltd. (GIII - Free Report) has provided financial updates in the wake of uncertainty surrounding the coronavirus outbreak. In response to the pandemic, the company has decided to furlough majority of its associates and temporarily reduce annual salary to reinforce its financial position amid the tough times.
Management will lower its retail business employees by above 80% via furloughs and staff reductions effective Apr 6. However, the furloughed full-time associates will be entitled to the existing healthcare benefits. Speaking of the company’s wholesale unit, which needs a small workforce now, management decides to furlough around 60% associates effective Apr 6. All furloughed employees in the wholesale business will continue to get existing healthcare benefits.
Moreover, the company’s chief operating officer, chief financial officer and executive vice president, each agreed to a 40% cut in annual salary. Also, the company’s chairman and vice chairman chose not to receive salary effective Mar 30. Meanwhile, G-III Apparel has agreed to temporary cut the base annual salary of the other senior personnel by 10-40%, based on the salary levels, effective Mar 30.
At its last earnings call, management had informed that the company closed its retail stores and corporate offices, and has been working remotely. Further, it stated that it has been monitoring developments of the pandemic and its impact on sales, operations and supply chain. Consequently, G-III Apparel did not provide outlook for fiscal 2021. Furthermore, the company cited that it expects minimal delays in production and transit times, depending on the current updates on factory operations in China and other affected areas. Sales from the retail partners and its retail stores have faced the brunt.
A glimpse of this Zacks Rank #5 (Strong Sell) company’s price performance portrays that its shares have lost 77%, wider than the industry’s 40.3% decline in the past three months. The dismal stock run is also attributed to the company’s weak retail business that has been impacted by soft underlying brands and store closures. Unfortunately, the impacts of the global pandemic will further weaken the retail business and consequently weigh on the overall top and bottom lines.
COVID-19 has jeopardized the global economy, with the retail sector suffering a hard blow. Apart from closing down stores, several retailers are calling off their guidance as they are unable to ascertain the possible impact on their top and bottom lines. Naming a few, Abercrombie & Fitch (ANF - Free Report) and Nordstrom (JWN - Free Report) withdrew their initial outlook. Moreover, they are suspending shareholder-friendly moves and reinforcing financial flexibility. Incidentally, Macy's (M - Free Report) has suspended its second-quarter fiscal 2020 dividend and lowered capital expenditures for the current fiscal year. The company has also chosen to access the $1.5-billion available under its revolving credit facility.
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G-III Apparel Issues Updates on Plans to Fight Coronavirus
G-III Apparel Group, Ltd. (GIII - Free Report) has provided financial updates in the wake of uncertainty surrounding the coronavirus outbreak. In response to the pandemic, the company has decided to furlough majority of its associates and temporarily reduce annual salary to reinforce its financial position amid the tough times.
Management will lower its retail business employees by above 80% via furloughs and staff reductions effective Apr 6. However, the furloughed full-time associates will be entitled to the existing healthcare benefits. Speaking of the company’s wholesale unit, which needs a small workforce now, management decides to furlough around 60% associates effective Apr 6. All furloughed employees in the wholesale business will continue to get existing healthcare benefits.
Moreover, the company’s chief operating officer, chief financial officer and executive vice president, each agreed to a 40% cut in annual salary. Also, the company’s chairman and vice chairman chose not to receive salary effective Mar 30. Meanwhile, G-III Apparel has agreed to temporary cut the base annual salary of the other senior personnel by 10-40%, based on the salary levels, effective Mar 30.
At its last earnings call, management had informed that the company closed its retail stores and corporate offices, and has been working remotely. Further, it stated that it has been monitoring developments of the pandemic and its impact on sales, operations and supply chain. Consequently, G-III Apparel did not provide outlook for fiscal 2021. Furthermore, the company cited that it expects minimal delays in production and transit times, depending on the current updates on factory operations in China and other affected areas. Sales from the retail partners and its retail stores have faced the brunt.
A glimpse of this Zacks Rank #5 (Strong Sell) company’s price performance portrays that its shares have lost 77%, wider than the industry’s 40.3% decline in the past three months. The dismal stock run is also attributed to the company’s weak retail business that has been impacted by soft underlying brands and store closures. Unfortunately, the impacts of the global pandemic will further weaken the retail business and consequently weigh on the overall top and bottom lines.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wrapping Up
COVID-19 has jeopardized the global economy, with the retail sector suffering a hard blow. Apart from closing down stores, several retailers are calling off their guidance as they are unable to ascertain the possible impact on their top and bottom lines. Naming a few, Abercrombie & Fitch (ANF - Free Report) and Nordstrom (JWN - Free Report) withdrew their initial outlook. Moreover, they are suspending shareholder-friendly moves and reinforcing financial flexibility. Incidentally, Macy's (M - Free Report) has suspended its second-quarter fiscal 2020 dividend and lowered capital expenditures for the current fiscal year. The company has also chosen to access the $1.5-billion available under its revolving credit facility.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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