Bella Hadid in the new DKNY campaign.

G-III Apparel Group Ltd. posted a loss despite a first-quarter increase in sales, but numbers were better than expected.

Shares of the company rose 15.2 percent in trading Tuesday to $22.92, despite posting a net loss of $10.4 million, equal to 21 cents per share, compared to a net income of $2.8 million a year ago.

G-III had forecasted a loss of between 41 cents and 51 cents per share for the quarter.  

Wall Street was likely also feeling chipper about G-III’s prospects as it posted a 16 percent increase in net sales to $529 million, a first-quarter record for the company, compared with $457.4 million in sales at the start of 2016. E-commerce sales grew by 13 percent during the quarter.

G-III’s stock fell to its lowest level in four years in March, when it posted full-year results that showed net income down by half to $51.9 million with only a 1.8 percent increase in sales.

“Our wholesale business continues its strong growth and demonstrates the power of our brand portfolio to transcend a difficult market environment and retain a leadership position as one of the most high-performing vendors for our retail customers,” chief executive officer Morris Goldfarb said of the results.

During a call with analysts, Goldfarb added that “our department store business remains healthy” and that G-III is “working closely” with Macy’s to launch the retailer’s exclusive DKNY line for spring 2018.

During the first quarter, G-III also began the process of closing another 69 Wilson and Bass stores, after shuttering about 60 at the end of the last fiscal year, in order to reduce costs and losses. Another 45 locations are set to close in 2018.

G-III also increased its guidance for full-year net sales and net income, to $2.76 billion and $57 million, respectively. When its 2016 financials were disclosed, G-III projected net sales of $2.73 billion and net income of no more than $45 million.

At least 15 locations are expected to be repurposed this year to DKNY and Karl Lagerfeld stores.

“We are confident that expense-reduction initiatives, reducing the store fleet and enhancing our products will greatly reduce our losses, and ultimately, make our own retail stores a profitable area of business for us,” Goldfarb said during a call with analysts.

Goldfarb noted new merchandise assortments being offered under the Tommy Hilfiger and Karl Lagerfeld brands are “creating opportunity” for retailers to boost traffic and sales and said bookings for Hilfiger are nearly triple where they were at the same time last year, while Lagerfeld is nearly double.

Goldfarb added that G-III is “approaching an inflection point” with the Donna Karan business and said the company’s efforts to revamp the brand after acquiring it for $650 million late last year should start paying off in the latter half of this year.

As for the second quarter, the company expects net sales of about $520 million along with a net loss of between $15 million and $20 million, compared with net sales of $442 million and a net loss of $1.3 million during the same period in 2016.

While Donna Karan will continue to cost G-III money in the second quarter, G-III-produced shipments of DKNY and Donna Karan are expected to start shipping in the third quarter and the response to the collections has been positive.

Goldfarb said the company overall is “in a renewed position” for growth.

“With a portfolio to build on DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld, we’re now a company of giants,” Goldfarb said. “We intend to take our rightful position in the marketplace, tough market or not.”

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