G-III Q2 net income rises despite sales decline

US fashion group G-III Apparel Group (G-III) has reported its financial results for the second quarter of fiscal year 2027 ended July 31, 2026 with net sales decrease of 10 percent to 554.1 million dollars.

Despite the decline in revenue, net income for the quarter reached 20.2 million dollars, or 0.46 dollars per diluted share, up from 10.9 million dollars, or 0.25 dollars per diluted share, in the same period last year. Non-GAAP net income was 0.26 dollars per diluted share, compared to 0.25 dollars in the second quarter of the previous fiscal year.

Gross margin expanded 440 basis points to 45.2 percent from 40.8 percent in the second quarter of last year. G-III attributed this gain to strategic price increases and a continued shift towards higher-margin owned brands.

Morris Goldfarb, chairman and chief executive officer at G-III, said: “Our second quarter results reflect strong execution across the organization, with earnings exceeding our guidance, driven by substantial gross margin expansion. Our go-forward portfolio grew at a high-single digit rate during the quarter, reinforcing our confidence in the power of our brands and business model.”

Portfolio expansion with Marc Jacobs acquisition

Goldfarb added: “Our strategic transformation has taken a meaningful step forward with the addition of Marc Jacobs. The acquisition significantly strengthens our portfolio and further enhances our position as a global fashion leader. I am extremely optimistic about the future of G-III and believe we have the brands, capabilities, and financial flexibility to capitalize on the opportunities ahead and create long-term value for our shareholders.”

During the quarter, G-III returned 12.2 million dollars to shareholders, comprising 7.9 million dollars in share repurchases and 4.3 million dollars in dividend payments.

Outlook for fiscal 2027 and third quarter For the full year fiscal, G-III projects net sales to reach approximately 2.71 billion dollars, down from 2.96 billion dollars in fiscal 2026, incorporating an estimated 460 million dollar loss from phased-out Calvin Klein and Tommy Hilfiger licenses.

Net income is forecasted between 181.0 million dollars and 185.0 million dollars, or 4.10 dollars to 4.20 dollars per diluted share, compared to 67.4 million dollars, or 1.51 dollars per diluted share, in fiscal 2026; non-GAAP net income is expected to range between 97.0 million dollars and 101.0 million dollars, or 2.20 dollars to 2.30 dollars per diluted share, down from 116.2 million dollars, or 2.61 dollars per diluted share and adjusted EBITDA is anticipated to be between 174.0 million dollars and 178.0 million dollars compared to 192.4 million dollars in fiscal 2026.

For the third quarter of fiscal 2027, net sales are expected to be approximately 870 million dollars compared to 988.6 million dollars in the prior year period. Net income is projected between 59.0 million dollars and 64.0 million dollars, or 1.35 dollars to 1.45 dollars per diluted share, compared to 80.6 million dollars, or 1.84 dollars per diluted share, in the third quarter of last year.