G-III Cuts Earnings View Amid Surprise Loss
August 30 2016 - 9:00AM
Dow Jones News
G-III Apparel Group Ltd. swung to a surprise loss in the latest
quarter as sales unexpectedly fell, and the company cut its
earnings forecast for the year amid retail softness at outlet
centers.
Shares fell 14% to $36 in premarket trading.
The producer of apparel and products under labels such as Calvin
Klein, Kenneth Cole and Tommy Hilfiger now sees full year per-share
earnings in a range of $2.20 to $2.30. It previously expected a
range between $2.55 and $2.65 a share.
New York City-based G-III said poor performance in outerwear
offset strengths in other parts of the business during the quarter.
However, Chief Executive Morris Goldfarb said there is opportunity
for better wholesale outerwear performance in the second half of
the year, given forecasted cool weather trends.
The results from the appeal maker come as retailers throughout
the country, from department stores and specialty shops, have
reported sliding sales mostly because of dwindling traffic, as
shoppers increasingly turn to online shopping and fast-fashion.
In July, LVMH Moë t Hennessy Louis Vuitton SE said it agreed to
sell Donna Karan International Inc. to G-III for $650 million,
including debt. The Donna Karan and DKNY lines delivered lackluster
growth for years amid stiff competition, but G-III has said the
acquisition would increase the scale and diversification of its
portfolio.
Over all for the July period, G-III posted a loss of $1.3
million, or 3 cents a share, compared a profit of $12.5 million, or
27 cents a share, a year ago. The company said its results included
fees in connection with the ongoing Donna Karan acquisition, which
dented profited by about 4 cents a share. The company guided for
per-share profit between 15 cents and 19 cents.
Revenue fell 7% to $442.3 million. The company expected sales to
grow to $485 million.
For the current third period that ends in October, the company
said it expects to earn between $1.50 and $1.60 a share on sales of
about $940 million. Analysts expected per-share profit of $2.02 on
$1 billion in revenue, according to Thomson Reuters.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
August 30, 2016 08:45 ET (12:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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