G-III Apparel Group said second-quarter net sales fell 10% to $554.1 million from $613.3 million a year earlier, but earnings moved sharply higher as gross margin expanded.
Net income rose to $20.2 million, or $0.46 a diluted share, from $10.9 million, or $0.25 a share, in the prior-year quarter. On a non-GAAP basis, diluted earnings per share were $0.26, up slightly from $0.25.
Gross margin increased 440 basis points to 45.2% from 40.8%, reflecting price increases and a shift toward higher-margin owned brands.
The company said its go-forward portfolio posted high-single-digit sales growth during the quarter.
Cash and cash equivalents climbed to $529.2 million from $301.8 million a year earlier, while inventories declined 13% to $555.0 million from $639.8 million. G-III also returned $12.2 million to shareholders in the quarter, including $7.9 million in share repurchases and $4.3 million in dividends.
For fiscal 2027, G-III now expects net sales of about $2.71 billion, down from $2.96 billion in fiscal 2026, reflecting the loss of about $460 million of Calvin Klein and Tommy Hilfiger sales. Even with that revenue decline, the company raised its profit outlook. It now sees net income of $181 million to $185 million, or $4.10 to $4.20 a share, compared with $67.4 million, or $1.51 a share, last year.
Non-GAAP net income is projected at $97 million to $101 million, or $2.20 to $2.30 a share, versus $116.2 million, or $2.61 a share, in fiscal 2026. Adjusted EBITDA is expected to come in at $174 million to $178 million, down from $192.4 million last year.
For the third quarter, G-III expects net sales of about $870 million, versus $988.6 million in the same quarter last year. Net income is projected at $59 million to $64 million, or $1.35 to $1.45 a share, compared with $80.6 million, or $1.84 a share, a year ago. The market has reacted to these announcements by moving the company's shares -5.14% to a price of $30.515. For the full picture, make sure to review G III APPAREL GROUP's 8-K report.
