G-III APPAREL GROUP SEES FOURTH QUARTER LOSS
G-III Apparel Group, Ltd. has reported mixed result for the fourth quarter and full fiscal 2017 year. Despite seeing gains in net sales, the company has reported a net loss due to its recent acquisition of Donna Karan International (DKI).
Net sales for the fiscal year ended January 31, 2017 were up 1.8 percent to $2.39 billion from $2.34 billion in the prior year. Growth over the prior year was primarily the result of increases in the company’s wholesale non-outerwear business and net sales from the DKI business in the last two months of the fiscal year and was offset, in part, by softer demand for outerwear and a decline in net sales in the company’s retail businesses.
For the fourth quarter ended January 31, 2017, net sales increased by 14.4 percent to $603 million from $527 million in the fourth quarter last year. The year-over-year increase in net sales in the fourth quarter reflects strength in the company’s non-outerwear wholesale business, including new product launches, as well as the inclusion of approximately $29.0 million of net sales from the DKI business in the last two months of the quarter. These increases were partially offset by declines in net sales of the company’s retail businesses.
The company reported a fourth quarter net loss of $20.1 million, or $0.42 per share, compared to net income of $8.0 million, or $0.16 per diluted share, in the fourth quarter last year.
“Fiscal 2017 was another important year for our Company,” said Morris Goldfarb, chairman and chief executive officer of G-III Apparel Group, Ltd. “We completed the acquisition of Donna Karan which made us the owner of two of the world’s most iconic and recognizable power brands in Donna Karan and DKNY. This acquisition further bolsters our value proposition and strengthens our position as an all-season diversified apparel company with a broad portfolio of brands offered in multiple channels of retail distribution. Our non-outerwear wholesale business performed well in the face of significant headwinds as the traditional retail environment has become increasingly disrupted as a result of evolving consumer buying behavior and continued penetration of e-commerce. We expect to initiate a number of new product launches in the coming year as we seek to offer superior value in the marketplace.”
Goldfarb continued, “While our near-term financial outlook reflects the dilutive impact of our recent acquisition of Donna Karan, we believe the mid-year re-launch of the DKNY and Donna Karan brands will have a positive impact in the second half of the year. We are confident that we have one of the most desirable portfolios of brands in the industry and that DKNY and Donna Karan will quickly take their place alongside Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld as the cornerstone brands for the growth of our business.”
