G-III Apparel Group is picking up momentum despite the macroeconomic headwinds.
The company’s first-quarter net income rose to $30.6 million, or 62 cents a share, from $26.3 million, or 53 cents, a year ago. Adjusted EPS increased to 72 cents from 56 cents a year ago.
Sales for the three months ended April 30 rose 32.5 percent to $688.8 million from $519.9 million.
That has the company topping its outlook for a $25 million to $30 million profit as sales came in $88.8 million better than it projected.
Morris Goldfarb, chairman and chief executive officer, said: “Our strong momentum continued in the first quarter of fiscal 2023 exceeding both our top- and bottom-line guidance, despite a challenging environment. Consumers are refreshing their wardrobes as they return to work and resume social activities, driving demand for our products.”
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The company is centered around five “power brands,” including DKNY, Donna Karan and Karl Lagerfeld, which it owns, and Calvin Klein and Tommy Hilfiger, which it produces looks for under license with PVH Corp.
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G-III posted its best year on record last year, enjoying the pandemic rush that saw many fashion companies thrive financially.
The question has been how many companies would be able to keep growing through inflation at 40-year highs, worries of recession, supply chain troubles, a land war in Europe and more.
Retailers like Walmart and Target at the value end of the price spectrum have been feeling the pinch, but players closer to the other side of the spectrum have fared much better.
G-III has certainly continued apace and Goldfarb said it’s ready to keep going.
“We remain extremely focused on our strategic priorities to deliver continued long-term profitable growth,” Goldfarb said. “Our recent Karl Lagerfeld acquisition has further expanded our portfolio of owned brands and our global presence. Our experienced senior leadership, world class teams and well-developed supply chain infrastructure set the stage for another strong year of market share gains and our ability to deliver on our raised outlook.”
G-III consolidated its control of the Karl Lagerfeld brand this month having paid 200 million euros to snatch up the 81 percent of the brand it didn’t already own.
This year, G-III is now projecting sales of $3.25 billion with adjusted earnings per share of $4.40 to $4.50.
On a conference with analysts, Goldfarb said the company was able to quickly evolve with the consumer when the pandemic started, emphasizing more casual looks, and that G-III has changed its approach again with people venturing out more.
“In anticipation of people resuming social activities, we’ve once again rebalanced our mix,” the CEO said. “With sales up overall across our divisions, we decreased penetration of casual pandemic categories and shifted our production into more polished products, including dresses and career wear.
“These post-pandemic categories are now seeing strong acceleration in sales, up over 35 percent to last year, with [average unit retail prices] increasing over 25 percent,” he said. “Additionally, we shifted our production calendars to bring in inventory earlier and are well-positioned to capture this robust demand.”
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