G-III smashes first quarter sales record, beats profit estimates
New York-based G-III Apparel Group, Ltd., the company behind DKNY, Donna Karan, Vilebrequin and G.H. Bass, among others, saw net sales rise 16% in Q1 2019, hitting a first quarter record of $611.7 million, compared to the $529.0 million reported in the prior year period.
Following suit, net income for the first quarter ended April 30, 2018 shot up to $9.9 million, or $0.20 per diluted share, a more than considerable improvement when compared to the net loss of $10.4 million reported in Q1 2018.
“We are pleased to have begun the year with a solid quarter across the board”, said G-III Chairman and CEO Morris Goldfarb in a release. “We are excited to see the momentum continue and have increased confidence in our outlook for the remainder of this year. We believe our long-term growth opportunities have never been more compelling and we remain focused on capturing market share, driving growth, improving profitability and creating exceptional value for our shareholders.”
G-III acquired Donna Karan International – including the Donna Karan and DKNY brands – from LVMH for $650 million in 2016 and has been on something of a sales growth streak ever since, consistently posting double-digit rises and setting new quarterly records.
In fiscal 2018 (ended January 31, 2018), for example, the company reported a 17.6% increase in net sales, which totaled $2.81 billion, with $258 million of this accounted for by the Dona Karan and DKNY brands alone. Net income for the year was $62.1 million, or $1.25 per diluted share.
A rocky moment did, however, threaten to upset proceedings in December of last year when controversy surrounding designer Donna Karan’s comments in support of Harvey Weinstein led to the creation of the social media hashtag #BoycottDonnaKaran and G-III’s stock fell more than 4%, despite the fact that Karan is no longer directly affiliated with her namesake brands.
No such worries following the release of the group’s latest results, as shares in the company surged 21% in premarket trade on Tuesday off the back of its stronger-than-expected performance.
In line with its strong sales in the first quarter, G-III has also raised its full year guidance for fiscal 2019. The company now expects net sales to total around $2.97 billion, compared to a previous forecast of approximately $2.94 billion, while net income is now anticipated to be between $112 million and $117 million, as opposed to the range of $97 million to $102 million previously reported.
For the second quarter of 2019 ending July 31, 2018, G-III is expecting net sales to reach approximately $590 million and net income/loss to be between a net loss of $3.5 million and net income of $1.5 million.
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