NEW YORK — Sportswear manufacturer G-III Apparel Group Ltd. said Tuesday that third-quarter earnings shot up 49.7 percent primarily because of the acquisitions of two firms earlier in the year.
In the three months ended Oct. 31, the company reported earnings of $14.8 million, or $1.73 a diluted share, compared with $10 million, or $1.33, in the year-ago period. Results in the latest quarter included an aftertax non-cash compensation charge of 11 cents a share because of the vesting of restricted shares of common stock. Analysts had been anticipating a profit of $1.89. Sales in the quarter rose 61.7 percent to $186.6 million from $115.4 million last year.
New York-based G-III said in a statement that its financial operations during the quarter benefited from the inclusion of the results of its newly acquired Marvin Richards and Winlit divisions. On July 11, G-III acquired the stock of privately held firms Marvin Richards Ltd. for $19.2 million and certain assets from Winlit Group Ltd. for $7.3 million.
In the nine months, G-III earnings almost tripled to $9.8 million, or $1.23 a diluted share, which includes a non-cash charge of 12 cents a share from a sale of the company’s joint venture interest in a China factory. That’s compared with $3.4 million, or 46 cents, last year. Sales in the nine months were up 45 percent at $254.9 million from $175.9 million.
For the full year, G-III expects sales of $330 million to $340 million, and net income is projected at 85 to 90 cents, including the non-cash compensation charge related to the vesting of restricted shares. Analysts are forecasting a profit of 95 cents on sales of $335.2 million.
Morris Goldfarb, chief executive officer of G-III, said in a statement that the firm’s “recent acquisitions have not only established us to improve the strength and depth of our management team but have also reenergized our organization.”
“We’re in a growth mode,” Goldfarb said in an interview. “We spent the last five or six years shoring up our company from the control side….There’s a good deal of confidence in what G-III has accomplished. This is really the beginning.”
He said the company plans more acquisitions next year. “There’s a zone out there for companies in the mid-volume range that are below the radar screen of the larger [manufacturers],” he said. For G-III, that means acquisitions of firms with volumes in the $50 million to $100 million range.