Business Wire | Dec 1, 2021 07:00AM EST

G-III Apparel Group, Ltd. Announces Third Quarter Fiscal 2022 Results

Dec. 01, 2021

NEW YORK--(BUSINESS WIRE)--Dec. 01, 2021--G-III Apparel Group, Ltd. (NasdaqGS: GIII) today announced operating results for the third quarter of fiscal 2022, ended October 31, 2021.

Morris Goldfarb, G-III's Chairman and Chief Executive Officer, said, "The strong momentum in our business in the first half continues, as we delivered outstanding third quarter results with both top and bottom line exceeding our guidance. Given the strong demand we are seeing across our brands, we are well positioned for the holiday season. We are raising our full year guidance and expect to deliver our highest annual earnings in our company's history."

Mr. Goldfarb concluded, "Our world-class team continues to maintain tremendous flexibility and is delivering the right product at the right time across our diversified distribution channels. We believe we will enter the new fiscal year in our strongest financial position ever, affording us flexibility to further expand our global reach and increase shareholder value."

Net sales for the third quarter ended October 31, 2021 increased 22.8% to $1.02 billion from $826.6 million in the prior year's quarter. The Company reported net income for the third quarter of $106.7 million, or $2.16 per diluted share, compared to $63.2 million, or $1.29 per diluted share, in the prior year's quarter.

The Company completed the restructuring of its retail operations segment during fiscal 2021 and closed its Wilsons Leather and G.H. Bass stores. Included in the Company's results for the third quarter of last year are net losses from the Wilsons Leather and G.H. Bass store operations of $12.0 million, or $(0.25) per diluted share. These results reflect direct store operations including impairment charges, but do not include any allocated corporate overhead charges, shared administrative expenses or shared distribution expenses. These operating results for Wilsons Leather and G.H. Bass are presented solely to provide the historical operating results of the portion of the Company's retail operations segment that was closed and are not intended to be used to develop expectations for future results of the Company or to indicate any future level of profitability of the Company.

Outlook

The Company today raised its guidance for the fiscal year ending January 31, 2022. As the developments associated with the COVID-19 pandemic continue to be fluid, the Company's fiscal year 2022 guidance contemplates the expected impact from the current supply chain conditions, including expected increased shipping costs and delays in receipt of goods. However, the guidance does not contemplate any reimposition of government-mandated store closures or other governmental restrictions as a result of the COVID-19 pandemic. The reimposition of store closures or other restrictions could have a material impact on our net sales, results of operations and supply chain during fiscal 2022. The Company's fiscal 2022 results could differ materially from its current outlook as a result of the occurrence of any of these or other uncontemplated events.

For fiscal 2022, the Company expects net sales of approximately $2.77 billion and net income between $180.0 million and $190.0 million, or between $3.65 and $3.75 per diluted share. The Company previously forecasted net sales of approximately $2.70 billion and net income between $155.0 million and $165.0 million, or between $3.10 and $3.20 per diluted share. This compares to net sales of $2.06 billion and net income of $23.5 million, or $0.48 per diluted share, last year. Last fiscal year's results included net sales of $91.8 million and a net loss of $(1.14) per diluted share associated with the Wilsons Leather and G.H. Bass store operations.

About G-III Apparel Group, Ltd.

G-III designs, sources and markets apparel and accessories under owned, licensed and private label brands. G-III's substantial portfolio of more than 30 licensed and proprietary brands is anchored by five global power brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. G-III's owned brands include DKNY, Donna Karan, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York and Sonia Rykiel. G-III has fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi's and Dockers brands. Through its team sports business, G-III has licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League and over 150 U.S. colleges and universities. G-III also distributes directly to consumers through its DKNY, Karl Lagerfeld Paris and Vilebrequin stores and its digital channels for the DKNY, Donna Karan, Vilebrequin, Karl Lagerfeld Paris, Andrew Marc, Wilsons Leather and G.H. Bass brands.

Statements concerning G-III's business outlook or future economic performance, anticipated revenues, expenses or other financial items; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters are "forward-looking statements" as that term is defined under the Federal Securities laws. Forward-looking statements are subject to risks, uncertainties and factors which include, but are not limited to, risks related to the COVID-19 pandemic, reliance on licensed product, reliance on foreign manufacturers, risks of doing business abroad, the current economic and credit environment, risks related to our indebtedness, the nature of the apparel industry, including changing customer demand and tastes, customer concentration, seasonality, risks of operating a retail business, risks related to G-III's ability to reduce the losses incurred in its retail operations, customer acceptance of new products, the impact of competitive products and pricing, dependence on existing management, possible disruption from acquisitions, the impact on G-III's business of the imposition of tariffs by the United States government and business and general economic conditions, as well as other risks detailed in G-III's filings with the Securities and Exchange Commission. G-III assumes no obligation to update the information in this release.

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES(Nasdaq: GIII)CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts)



Three Months Ended Nine Months Ended October 31, October 31,

2021 2020 2021 2020

(Unaudited)



Net sales $ 1,015,392 $ 826,561 $ 2,018,383 $ 1,528,904

Cost of goods 667,882 528,806 1,282,526 972,055 sold

Gross profit 347,510 297,755 735,857 556,849



Selling, generaland 182,360 177,625 470,803 454,347 administrativeexpenses

Depreciation and 7,024 10,187 21,166 29,745 amortization

Assetimpairments, netof loss (gain) on - (117 ) - 17,372 leasemodifications

Operating profit 158,126 110,060 243,888 55,385



Other income 898 225 4,693 112

Interest andfinancing (12,354 ) (18,681 ) (36,932 ) (38,237 )charges, net

Income before 146,670 91,604 211,649 17,260 income taxes



Income tax 40,198 28,430 59,692 8,357 expense

Net income 106,472 63,174 151,957 8,903

Less: Lossattributable to (202 ) - (206 ) - noncontrollinginterests

Net incomeattributable to $ 106,674 $ 63,174 $ 152,163 $ 8,903 G-III ApparelGroup, Ltd.



Net incomeattributable toG-III Apparel Group, Ltd. percommon share:

Basic $ 2.20 $ 1.31 $ 3.14 $ 0.18

Diluted $ 2.16 $ 1.29 $ 3.07 $ 0.18



Weighted averageshares outstanding:

Basic 48,567 48,359 48,474 48,201

Diluted 49,458 48,809 49,499 48,589

Selected Balance Sheet Data (in thousands):

At October 31,

2021

2020

(Unaudited)

Cash and cash equivalents

$

279,564

$

149,745

Working capital

1,080,461

889,722

Inventories

448,991

461,769

Total assets

2,728,017

2,469,416

Long-term debt

517,529

508,411

Operating lease liabilities

192,805

223,537

Total stockholders' equity

1,486,239

1,310,267

Selected Balance Sheet Data (in thousands): At October 31,

2021 2020

(Unaudited)



Cash and cash equivalents $ 279,564 $ 149,745

Working capital 1,080,461 889,722

Inventories 448,991 461,769

Total assets 2,728,017 2,469,416

Long-term debt 517,529 508,411

Operating lease liabilities 192,805 223,537

Total stockholders' equity 1,486,239 1,310,267

SELECT STATEMENT OF OPERATIONS DATA OF WILSONS LEATHER AND G.H. BASS STORES(In thousands, except per share amounts)Three Months Ended

Fiscal Year Ended

April 30,2020

July 31,2020

October 31,2020

January 31,2021

January 31,2021

(Unaudited)

Net sales

$

19,293

$

19,667

$

38,175

$

14,713

$

91,848

Operating loss

(21,237

)

(35,128

)

(17,408

)

(10,881

)

(84,654

)

Operating loss before income taxes

(21,237

)

(35,128

)

(17,408

)

(10,881

)

(84,654

)

Operating loss, net of taxes

$

(14,980

)

$

(25,643

)

$

(12,005

)

$

(8,615

)

$

(55,739

)

Operating loss per common share:

Basic

$

(0.31

)

$

(0.53

)

$

(0.25

)

$

(0.18

)

$

(1.16

)

Diluted

$

(0.31

)

$

(0.53

)

$

(0.25

)

$

(0.17

)

$

(1.14

)

Three Months Ended

Fiscal Year Ended

April 30,2019

July 31,2019

October 31,2019

January 31,2020

January 31,2020

(Unaudited)

Net sales

$

52,589

$

53,596

$

59,848

$

85,478

$

251,511

Operating loss

(10,264

)

(8,585

)

(5,588

)

(17,459

)

(41,896

)

Operating loss before income taxes

(10,264

)

(8,585

)

(5,588

)

(17,459

)

(41,896

)

Operating loss, net of taxes

$

(5,458

)

$

(6,267

)

$

(4,068

)

$

(15,903

)

$

(31,696

)

Operating loss per common share:

Basic

$

(0.11

)

$

(0.13

)

$

(0.09

)

$

(0.33

)

$

(0.66

)

Diluted

$

(0.11

)

$

(0.13

)

$

(0.08

)

$

(0.33

)

$

(0.65

)

The tables above reflect the four wall operations of Wilsons Leather and G.H. Bass stores, which are included in the consolidated operating results of the Company. As part of our retail restructuring, we closed these stores. The results for this portion of our retail operations segment include impairment charges, but do not include any allocated corporate overhead charges, shared administrative expenses or shared distribution center expenses. Corporate overhead charges, shared administrative expenses and shared distribution center expenses have been excluded as these expenses will continue to be incurred by the Company notwithstanding the restructuring of its retail operations segment. The Company continues to evaluate to what extent these expenses might be able to be reduced now that the restructuring has been completed. No interest expense has been allocated in calculating these operating results. The tax rates used assume the same overall effective rate that is reflected in the Company's consolidated financial statements for fiscal 2021 and fiscal 2020. The tables above also reflect the results of operations of the Company's four Calvin Klein Performance stores that were closed as part of the retail restructuring. The operating results of the four Calvin Klein Performance stores are also included in the consolidated operating results of the Company.

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CONTACT: G-III Apparel Group, Ltd.

CONTACT: Company Contact: Priya Trivedi SVP of Investor Relations and Treasurer (646) 473-5228

CONTACT: Investor Relations Contact: Tom Filandro ICR, Inc. (646) 277-1235