G-III Apparel reports Q2 sales below plan, EPS tops guidance

G-III Apparel Group (NASDAQ: GIII ) held its second-quarter earnings conference call on Wednesday.

Below is the complete transcript from the call.

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The full earnings call is available at Summary G-III Apparel Group reported second-quarter net sales of $554 million, slightly below expectations, primarily due to challenges in their European market.

The company completed the acquisition of Marc Jacobs, which is expected to significantly enhance their brand portfolio and drive long-term growth.

Gross margins improved by 440 basis points year-over-year, attributed to pricing strategies and a shift towards higher-margin owned brands.

Non-GAAP earnings per share exceeded guidance, reported at $0.26 against a forecast of $0.15 to $0.25.

The company reiterated its fiscal 2027 guidance, projecting net sales of $2.71 billion and increased earnings per share guidance to $2.20 to $2.30, excluding Marc Jacobs' impact.

G-III Apparel Group is focusing on transforming into a brand-led global apparel powerhouse, with Marc Jacobs expected to drive significant future revenue growth.

The balance sheet remains strong with $530 million in cash and $1 billion in available liquidity, supported by recent tariff refunds.

Significant growth reported in owned brands like Donna Karan, with plans to expand distribution and enhance marketing efforts.

Management expressed optimism about the long-term potential of Marc Jacobs, aiming to achieve $1 billion in annual revenue from the brand.

The company is navigating challenges such as macroeconomic pressures in Europe and strategic transitions from exiting Calvin Klein and Tommy Hilfiger licenses.

Full Transcript OPERATOR Good day and thank you for standing by.

Welcome to the G-III Apparel Group Second Quarter Fiscal 2027 Earnings Conference Call.

At this time, all participants are in a listen-only mode.

After the speaker's presentation, there will be a question-and-answer session.

To ask a question during the session, you will need to press star 11 on your telephone.

You will then hear an automated message advising that your hand is raised.

To withdraw your question, please press star 11 again.

Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Neal Nackman, CFO.

Please go ahead.

Neal Nackman, CFO Good morning and thank you for joining us.

Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws.

Forward-looking statements are not guaranteed and actual results may differ materially from those expressed or implied in forward-looking statements.

Important factors that could cause actual results of operations or the financial condition of the company to differ are discussed in the documents filed by the company with the SEC.

The company undertakes no duty to update any forward-looking statements.

In addition, during the call we will refer to non-GAAP gross profit, non-GAAP net income and non-GAAP net income per share, and adjusted EBITDA, which are all non-GAAP financial measures.

We have provided reconciliations of these non-GAAP financial measures to GAAP measures in our press release, which is also available on our website.

I will now turn the call over to our Chairman and Chief Executive Officer, Morris Goldfarb.

Morris Goldfarb, Chairman and Chief Executive Officer Thank you, Neil, and thank you, everyone, for joining us.

We made good progress in the second quarter with earnings exceeding our guidance, driven by solid execution, significant gross margin expansion, and disciplined expense management.

We also reached an incredibly important milestone with the completion of the Marc Jacobs acquisition yesterday.

We believe this is transformational for G-III Apparel Group and significantly enhances our portfolio of owned brands while accelerating our evolution into a brand-led global apparel powerhouse.