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G-III Apparel (GIII) - 2026 Q1 - Earnings Call Transcript
GIIIG-III Apparel (GIII)2025-06-06 13:32
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Financial Data and Key Metrics Changes - Non-GAAP earnings per diluted share increased to 0.19from0.19 from 0.12 year-over-year, exceeding guidance [13][37] - Net sales for the quarter were 584million,downfrom584 million, down from 610 million in the same period last year, aligning with expectations [35] - Gross margin percentage was 42.2%, slightly down from 42.5% in the previous year [35][36] - Non-GAAP net income for the first quarter was 8.4millioncomparedto8.4 million compared to 5.8 million in the previous year [37] - Ending cash and availability was approximately 740million,indicatingastrongfinancialposition[13][38]BusinessLineDataandKeyMetricsChanges−Wholesalesegmentnetsalesdecreasedto740 million, indicating a strong financial position [13][38] Business Line Data and Key Metrics Changes - Wholesale segment net sales decreased to 563 million from 598millionyear−over−year[35]−Retailsegmentnetsalesincreasedto598 million year-over-year [35] - Retail segment net sales increased to 36 million from 31millioninthepreviousyear[35]−Keyownedbrands,includingDKNY,KarlLagerfeld,andDonnaKaran,experienceddouble−digitgrowth,offsettinglossesfromexitedbusinesses[5][14]MarketDataandKeyMetricsChanges−Internationalmarketsareseenassignificantgrowthopportunities,particularlyinEurope[14][22]−ThebrandDonnaKaransawnearly5031 million in the previous year [35] - Key owned brands, including DKNY, Karl Lagerfeld, and Donna Karan, experienced double-digit growth, offsetting losses from exited businesses [5][14] Market Data and Key Metrics Changes - International markets are seen as significant growth opportunities, particularly in Europe [14][22] - The brand Donna Karan saw nearly 50% sales growth, with strong performance in dresses and suit separates [15][16] - DKNY and Karl Lagerfeld also reported strong sales growth, particularly in North America and Europe [20][22] Company Strategy and Development Direction - The company is focused on driving growth through its owned brands, which are expected to be sustainable long-term profit drivers [13][14] - Strategic initiatives include sourcing diversification, vendor negotiations, and selective price increases to mitigate tariff impacts [7][39] - The company is also enhancing its omni-channel capabilities and optimizing its global store footprint [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the consumer environment despite macroeconomic uncertainties [6][33] - The potential unmitigated tariff impact for fiscal 2026 is estimated at approximately 135 million, with ongoing efforts to mitigate this through various strategies [7][39] - The company remains committed to investing in key owned brands and growth initiatives despite challenges [12][33] Other Important Information - The company successfully renegotiated favorable lease terms for corporate offices and is streamlining its warehouse network [11] - The planned relaunch of the Sonya Riquel brand was postponed due to uncertainties in the operating environment [12][54] Q&A Session Summary Question: Pricing Power and Areas for Price Increases - Management indicated strong cooperation from retailers in adjusting pricing, focusing on areas where consumers will accept price increases [45][46] Question: Impact of Sonya Riquel Postponement on Guidance - The decision to postpone the Sonya Riquel launch was made to avoid losses, but strength in other brands allows the company to maintain its sales guidance [53][54][75] Question: Inventory Levels and Supply Chain Challenges - Inventory levels are expected to align with sales growth, with management actively managing inventory purchases in light of supply chain disruptions [78][80] Question: Promotions and Consumer Demand - Management does not anticipate significant pressure on promotions, citing strong demand for their products and effective management of inventory levels [84][85]