G-III Apparel Group Ltd. delivered mixed results in its first-quarter earnings announcement as it beat earnings forecast, missed on revenues and guided below consensus for the second quarter.
Net income for the quarter fell to $2.8 million, or 6 cents a diluted share, down from $6.8 million, or 15 cents, a year ago. The FactSet estimate was only for 2 cents per share in the quarter. That earnings beat helped pushed the stock up by over 2 percent to $40.16 in early trading.
Sales for the three months ending April 30 increased 6 percent to a record $457.4 million from $433.0 million a year earlier.
“Fiscal 2017 got off to a strong start in our wholesale business, particularly with respect to our Calvin Klein products and our dress businesses including Eliza J and the newly launched Tommy Hilfiger dress line,” said chief executive officer Morris Goldfarb. “Although our own retail businesses did not perform to plan, we expect many of the measures we are taking to improve top- and bottom-line performance for these businesses in the second half of the year.”
Gross profit for the first quarter was $165,669, which was 36.2 percent of net sales. This was better than last year’s gross profit for the first quarter of $154,427, or 35.6 percent of net sales. The increase came from Calvin Klein-licensed products and primarily from women’s dresses and sportswear.
Goldfarb said on the earnings conference call that Karl Lagerfeld sportswear for spring performed well and that customers responded very well to products with pretty, feminine details. He said they would expand G-III’s presence in Karl Lagerfeld handbags and footwear. The suit separate product will begin shipping in August.
G-III’s guidance for the second quarter is for net sales of $485 million, which is higher than last year’s $473 million, but lower than the Capital IQ estimate of $509 million. Earnings per share for the second quarter are expected to be in the range of 15 cents to 19 cents, while the estimate was for 20 cents.
G-III reaffirmed guidance for the fiscal year 2017 with earnings per between $2.55 and $2.65 versus the Capital IQ estimate of $2.58. Revenues are projected to be about $2.56 billion, in line with the estimate of $2.55 billion.