NEW YORK -- G-III Apparel Group Ltd. sank into the red in the third quarter ended Oct. 31 as warm weather conditions hampered sales of outerwear.
The leather and fabric outerwear firm lost $452,000 in the third quarter against a profit of $3.1 million, or 47 cents a share, a year ago.
"This past fall season has been one of the most difficult outerwear apparel selling seasons in recent memory," said Morris Goldfarb, president and chief executive officer.
G-III noted that the unusually warm fall weather hurt outerwear sales at retail as well as depressing orders. As a result of higher-than-expected inventory levels, the company established an after-tax inventory reserve for markdowns of $3.2 million, or 47 cents a share.
"As a result of these trends, which we believe will continue to impact our performance through the fourth quarter, we felt it prudent to significantly increase our markdown reserve," he said.
Sales in the quarter slid 8.6 percent to $73.6 million from $80.6 million, reflecting a change in the way the company recognizes certain sales. G-III now recognizes commission income on certain types of sales where customers provide letters of credit directly to overseas manufacturers. Excluding the changes, sales would have been $84.9 million in the latest quarter.
In the nine months ended Oct. 31, G-III lost $2.7 million against earnings of $1.7 million, or 26 cents, in the year-ago period.
Sales fell 12.6 percent to $141.9 million from $162.4 million. Excluding changes in recording sales, sales would have been $163.6 million in the latest nine months.
G-III Apparel Group manufactures and distributes leather and non-leather outerwear. The company makes coats, jackets, pants skirts and other sportswear under its G-III, JL Colebrook, Siena and Siena Studio as well as under private labels.
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