Donna Karan lifts G-III sales as net income falls more than half
G-III Apparel reduced its fiscal year outlook in January, citing a challenging retail environment and unseasonably warm weather. The company on Monday reported net sales of $2.39 billion that missed expectations, but increased over the previous year.
The acquisition of Donna Karan International in July and G-III’s non-outerwear wholesale business boosted full year sales, but was offset by softer demand in outerwear and a decline in net sales in the company's retail businesses.
DKI also couldn’t help G-III’s GAAP net income for the year, which fell to $51.9 million, or $1.10 per diluted share, from $114.3 million, or $2.46 per diluted share, in the previous year.
G-III expected its fourth quarter net sales to decrease $20 million, but it increased 14.4% to $603 million. The company also reported a $20.1 million net loss for the quarter compared to net income of $8.0 million in the previous year.
Chairman and CEO Morris Goldfarb is very optimistic about the company’s performance following what he describes as an important year for G-III. He also noted the positive impact of the DKI acquisition and the Donna Karan and DKNY mid-year relaunch could have on the company.
DKNY was already in the news earlier today when Macy's announced it had inked a deal to be the exclusive department store carrying DKNY women's wear. G-III will continue to operate freestanding DKNY stores and the label's website.
G-III in August announced plans to reach $5 billion in sales in 5 years led by Donna Karan and its licenses with Tommy Hilfiger, Calvin Klein and Karl Lagerfeld. For the plan to work, the Donna Karan and Tommy Hilfiger businesses will each have to earn $1 billion, Calvin Klein must contribute $1.5 billion and Karl Lagerfeld would earn $500 million. Vilebrequin would bring up the rear with $250 million and the other licenses would round out the remainder.
For fiscal 2018, the company expects net sales to be $2.73 billion and for net income to range from $40 million to $45 million, or $0.80 to $0.90 per diluted share.
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