Core Viewpoint - G-III Apparel Group reported better-than-expected earnings for the first quarter, with adjusted earnings per share of 19 cents, surpassing analyst expectations of 12 cents, despite a 4% year-over-year decline in quarterly sales to $583.61 million, which still exceeded the Street's estimate of $580.37 million [1][2]. Financial Performance - The company experienced double-digit growth in key owned brands such as DKNY, Karl Lagerfeld, and Donna Karan, which helped offset losses from exiting the Calvin Klein jeans and sportswear businesses [2]. - G-III Apparel has withdrawn its profit guidance for FY26 due to tariff impacts and macroeconomic uncertainties, anticipating a $135 million unmitigated tariff hit, primarily in the second half of the fiscal year [2]. - The company maintains its FY2026 sales guidance at $3.14 billion, slightly above the $3.12 billion estimate [2]. Future Expectations - G-III Apparel expects lower sales in the first half of fiscal 2026 compared to the previous year, with an anticipated acceleration in the second half [3]. - For the second quarter, the company projects earnings per share between $0.02 and $0.12, with revenue expected to be around $570 million, below the $621 million estimate [3]. Stock Performance and Analyst Ratings - Following the earnings announcement, G-III Apparel shares fell by 2.7%, trading at $21.90 [3]. - Analysts have adjusted their price targets for G-III Apparel: Telsey Advisory Group lowered its target from $30 to $27, Keybanc reduced its target from $40 to $30, and Barclays cut its target from $21 to $18 [6][8].

Core Insights - G-III Apparel Group, Ltd. (GIII) reported first-quarter fiscal 2026 results with net sales decreasing and earnings increasing year over year, surpassing the Zacks Consensus Estimate for both top and bottom lines [1][3][10] Financial Performance - Adjusted earnings per share (EPS) reached 19 cents, exceeding the Zacks Consensus Estimate of 12 cents, and increased by 58.3% from the previous year's adjusted EPS of 12 cents [3][10] - Net sales decreased by 4.3% year over year to $583.6 million, beating the consensus estimate of $580 million [3][10] - Gross profit fell by 4.8% year over year to $246.5 million, with a gross margin decline of 30 basis points to 42.2% [4] - SG&A expenses decreased by 2.2% year over year to $231.5 million, primarily due to lower advertising expenses [5] - Adjusted EBITDA declined by 12.6% year over year to $19.5 million, with an adjusted EBITDA margin decrease of 40 basis points to 3.3% [6] Segment Performance - The wholesale segment reported net sales of $563 million, down from $598 million in the previous year, with a gross margin of 40.4%, down from 40.9% [7] - The retail segment recorded net sales of $36 million, up from $31 million in the prior year, with a gross margin improvement to 53.5% from 47% [8] Guidance and Future Outlook - For fiscal 2026, net sales are expected to be $3.14 billion, a decrease from $3.18 billion in fiscal 2025, with lower sales anticipated in the first half and growth expected in the second half [12] - Projected net sales for the second quarter of fiscal 2026 are approximately $570 million, down from $644.8 million in the prior year, attributed to supply-chain challenges [13] - Net income for the fiscal second quarter is projected to be between $1 million and $6 million, significantly lower than the previous year's net income of $24.2 million [14] Financial Position - G-III Apparel ended the fiscal first quarter with cash and cash equivalents of $257.8 million and total debt of $18.7 million, with total stockholders' equity at $1.68 billion [11]

Sales Performance - G-III Apparel Group's net sales from Calvin Klein and Tommy Hilfiger licensed products decreased by $188.4 million in fiscal 2025, offset by a $254.4 million increase in net sales from DKNY, Donna Karan, and Karl Lagerfeld products [98]. - Approximately 34.0% of G-III's net sales in fiscal 2025 were derived from Calvin Klein and Tommy Hilfiger brands, down from 41.0% in fiscal 2024 [96]. - Net sales for the three months ended April 30, 2025 decreased to $583.6 million from $609.7 million in the same period last year, representing a decline of approximately 4.5% [111]. - Net sales of the wholesale operations segment decreased to $562.6 million, driven by a decrease of $58.1 million in Calvin Klein and Tommy Hilfiger licensed products [112]. Cost and Profitability - Gross profit was $246.5 million, or 42.2% of net sales, compared to $258.9 million, or 42.5% of net sales, in the same period last year [116]. - Selling, general and administrative expenses decreased to $231.5 million from $236.6 million, primarily due to lower advertising and compensation expenses [117]. - The effective tax rate increased to 32.4% from 29.3% in the prior year, attributed to permanent tax adjustments and discrete items [121][122]. Financial Position - Cash and cash equivalents as of April 30, 2025 were $257.8 million, with availability under the revolving credit facility of approximately $480 million [124]. - The company redeemed the entire $400 million principal amount of Senior Secured Notes in August 2024, resulting in a decrease in interest charges [120][125]. - The Third ABL Credit Agreement provides for borrowings of up to $700 million, extending the maturity date to June 2029 [126]. - As of April 30, 2025, the average interest rate paid under the Third ABL Credit Agreement was 8.0% per annum [128]. - The Company had no borrowings outstanding under the Third ABL Credit Agreement as of April 30, 2025 [132]. - The Company incurred new debt issuance costs totaling $3.8 million related to the Third ABL Credit Agreement [133]. - The Company had an aggregate outstanding balance of €4.9 million ($5.3 million) under unsecured loans as of April 30, 2025 [134]. - The Company had an aggregate of €7.4 million ($8.0 million) drawn under various overdraft facilities as of April 30, 2025 [135]. Cash Flow - Cash generated from operating activities during the three months ended April 30, 2025, was $93.8 million, primarily due to a net income of $7.8 million [142]. - The Company used $8.8 million of cash in investing activities during the three months ended April 30, 2025 [144]. - Net cash used by financing activities was $12.6 million during the three months ended April 30, 2025, primarily due to share repurchases [145]. Strategic Initiatives - The company is investing in digital marketing and logistics to expand its digital footprint, responding to the increasing trend of online apparel sales [92]. - G-III's strategic acquisitions, including the full ownership of Karl Lagerfeld, aim to diversify its business and expand distribution channels [95]. - The company is exploring new licensing opportunities and acquisitions to mitigate risks associated with the expiration of existing licenses for Calvin Klein and Tommy Hilfiger [97]. - The relaunch of the Donna Karan brand began in Spring 2024, with expectations for future growth through new product lines and marketing initiatives [99]. Market Trends and Challenges - In fiscal 2025, 76% of G-III's products were sourced from China, Vietnam, and Indonesia, with significant tariff implications affecting costs and supply chain [87]. - The U.S. imposed a minimum 10% tariff on most foreign imports, with an additional 145% tariff on imports from China, impacting G-III's sourcing strategy [87]. - The Company anticipates challenges in shipping goods from China due to limited capacity and ongoing geopolitical tensions affecting global supply chains [107][108]. - Retail industry trends include a shift towards digital sales and exclusive product offerings, prompting G-III to adapt its strategies accordingly [91].

Financial Data and Key Metrics Changes - Non-GAAP earnings per diluted share increased to $0.19 from $0.12 year-over-year, exceeding guidance [13][37] - Net sales for the quarter were $584 million, down from $610 million in the same period last year, aligning with expectations [35] - Gross margin percentage was 42.2%, slightly down from 42.5% in the previous year [35][36] - Non-GAAP net income for the first quarter was $8.4 million compared to $5.8 million in the previous year [37] - Ending cash and availability was approximately $740 million, indicating a strong financial position [13][38] Business Line Data and Key Metrics Changes - Wholesale segment net sales decreased to $563 million from $598 million year-over-year [35] - Retail segment net sales increased to $36 million from $31 million in the previous year [35] - Key owned brands, including DKNY, Karl Lagerfeld, and Donna Karan, experienced double-digit growth, offsetting losses from exited businesses [5][14] Market Data and Key Metrics Changes - International markets are seen as significant growth opportunities, particularly in Europe [14][22] - The brand Donna Karan saw nearly 50% sales growth, with strong performance in dresses and suit separates [15][16] - DKNY and Karl Lagerfeld also reported strong sales growth, particularly in North America and Europe [20][22] Company Strategy and Development Direction - The company is focused on driving growth through its owned brands, which are expected to be sustainable long-term profit drivers [13][14] - Strategic initiatives include sourcing diversification, vendor negotiations, and selective price increases to mitigate tariff impacts [7][39] - The company is also enhancing its omni-channel capabilities and optimizing its global store footprint [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the consumer environment despite macroeconomic uncertainties [6][33] - The potential unmitigated tariff impact for fiscal 2026 is estimated at approximately $135 million, with ongoing efforts to mitigate this through various strategies [7][39] - The company remains committed to investing in key owned brands and growth initiatives despite challenges [12][33] Other Important Information - The company successfully renegotiated favorable lease terms for corporate offices and is streamlining its warehouse network [11] - The planned relaunch of the Sonya Riquel brand was postponed due to uncertainties in the operating environment [12][54] Q&A Session Summary Question: Pricing Power and Areas for Price Increases - Management indicated strong cooperation from retailers in adjusting pricing, focusing on areas where consumers will accept price increases [45][46] Question: Impact of Sonya Riquel Postponement on Guidance - The decision to postpone the Sonya Riquel launch was made to avoid losses, but strength in other brands allows the company to maintain its sales guidance [53][54][75] Question: Inventory Levels and Supply Chain Challenges - Inventory levels are expected to align with sales growth, with management actively managing inventory purchases in light of supply chain disruptions [78][80] Question: Promotions and Consumer Demand - Management does not anticipate significant pressure on promotions, citing strong demand for their products and effective management of inventory levels [84][85]

Financial Data and Key Metrics Changes - Non-GAAP earnings per diluted share increased to $0.19 from $0.12 year-over-year, exceeding guidance [11] - Net sales for the quarter were $584 million, down from $610 million in the same period last year, aligning with expectations [32] - Gross margin percentage was 42.2%, slightly down from 42.5% in the previous year [32] - The company ended the quarter with a net cash position of approximately $239 million, compared to $82 million in the prior year [34] Business Line Data and Key Metrics Changes - The wholesale segment's net sales decreased to $563 million from $598 million year-over-year [32] - The retail segment's net sales increased to $36 million from $31 million in the previous year [32] - Key owned brands, including DKNY, Karl Lagerfeld, and Donna Karan, experienced double-digit growth, offsetting losses from exited businesses [4][12] Market Data and Key Metrics Changes - International markets are identified as significant growth opportunities, particularly in Europe [12] - Donna Karan saw nearly 50% sales growth, with strong performance in dresses and suit separates [14] - DKNY and Karl Lagerfeld also reported double-digit growth, with DKNY gaining share across multiple categories [17][19] Company Strategy and Development Direction - The company is focused on driving growth through its owned brands, which are seen as sustainable profit drivers [11] - Strategic initiatives include sourcing diversification, vendor negotiations, and selective price increases to mitigate tariff impacts [6][36] - The company is optimizing its global store footprint and enhancing its omni-channel capabilities [28] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the consumer environment and the health of the brands [5] - The company is actively working to mitigate the estimated $135 million tariff impact through various strategies [6][36] - Future growth is anticipated through the expansion of owned brands and strategic licenses, with a focus on long-term sustainability [22][28] Other Important Information - The company has successfully renegotiated lease terms for corporate offices and is streamlining its warehouse network [9] - The North American retail segment is expected to break even this year, enhancing operating income by $14 million [10] - The launch of the Sonya Riquel brand has been postponed due to market uncertainties [10] Q&A Session Summary Question: Pricing power and areas for price increases - Management indicated strong cooperation from retailers in adjusting pricing, particularly for newer brands like Donna Karan and Karl Lagerfeld [41][42] Question: Impact of Sonya Riquel postponement on guidance - The decision to postpone was made to avoid losses, and management remains confident in the overall strength of the portfolio [50][51] Question: Inventory levels and expectations for Q2 - Inventory levels are expected to align with sales growth, with a focus on managing supply chain challenges [74][75] Question: Promotions and consumer demand - Management does not anticipate significant pressure on promotions, citing strong demand for quality products [78][79]

Company Performance - G-III Apparel Group reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, and up from $0.12 per share a year ago, representing an earnings surprise of 58.33% [1] - The company posted revenues of $583.61 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 0.59%, but down from $609.75 million in the same quarter last year [2] - Over the last four quarters, G-III Apparel has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.54 on revenues of $620.3 million, and for the current fiscal year, it is $4.22 on revenues of $3.14 billion [7] - The estimate revisions trend for G-III Apparel is mixed, leading to a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Textile - Apparel industry, to which G-III Apparel belongs, is currently in the bottom 25% of over 250 Zacks industries, which may impact the stock's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially affect stock performance [5][8]

Financial Performance - Net sales for the first quarter of fiscal 2026 decreased 4% to $583.6 million compared to $609.7 million in the prior year's quarter[5] - Net income for the first quarter was $7.8 million, or $0.17 per diluted share, compared to $5.8 million, or $0.12 per diluted share, in the prior year's quarter[5] - Non-GAAP net income per diluted share was $0.19 for the first quarter, up from $0.12 in the same period last year, excluding one-time severance expenses of $1.0 million[6] - Net income for the second quarter is projected to be between $1.0 million and $6.0 million, significantly lower than $24.2 million in the prior year's second quarter[15] - Forecasted net income for the three months ending July 31, 2025, is projected to be between $1,000,000 and $6,000,000, compared to actual net income of $24,212,000 for the same period in 2024[30] Guidance and Projections - The company reaffirmed its net sales guidance for fiscal 2026, expecting approximately $3.14 billion in net sales, down from $3.18 billion in fiscal 2025[13] - For the second quarter of fiscal 2026, net sales are expected to be approximately $570.0 million, down from $644.8 million in the prior year's second quarter[14] Debt and Expenses - Total debt decreased 96% to $18.7 million from $426.4 million last year, following the redemption of $400.0 million in senior secured notes[9] - The company anticipates an additional expense of approximately $135.0 million due to tariffs, primarily impacting the second half of the fiscal year[11] - The company incurred one-time warehouse-related severance expenses of $978,000 in the current quarter[28] Inventory and Financial Metrics - Inventories decreased 5% to $456.5 million compared to $479.7 million last year[7] - Adjusted EBITDA for the three months ended April 30, 2025, was $19,489,000, down from $22,299,000 in the prior year, reflecting a decrease of 12.2%[28] - The company reported a significant reduction in interest and financing charges, net, from $5,424,000 in the prior year to $461,000 in the current quarter[28] - Income tax expense increased to $3,718,000 for the three months ended April 30, 2025, compared to $2,305,000 in the same period last year, marking a rise of 61.5%[28] Non-GAAP Measures - The company emphasizes the importance of non-GAAP financial measures to provide a clearer picture of operational performance, excluding items not indicative of core business results[30] - Management believes that the non-GAAP measures are useful for investors to assess performance across historical periods and compare with competitors[30] Share Repurchases - Share repurchases totaled $19.7 million for 807,437 shares in the first quarter[10] Strategic Focus - The company is focused on strategic adjustments and operational efficiency to enhance profitability moving forward[28]

Core Viewpoint - G-III Apparel Group reported solid first-quarter results for fiscal 2026, with earnings exceeding guidance, driven by strong performance in key owned brands despite the exit from Calvin Klein jeans and sportswear [2][3]. Financial Performance - Net sales for the first quarter decreased by 4% to $583.6 million compared to $609.7 million in the prior year [3][9]. - Net income for the first quarter was $7.8 million, or $0.17 per diluted share, up from $5.8 million, or $0.12 per diluted share, in the prior year [3][9]. - Non-GAAP net income per diluted share was $0.19, compared to $0.12 in the same period last year, excluding one-time severance expenses [4][9]. Balance Sheet Highlights - Inventories decreased by 5% to $456.5 million compared to $479.7 million last year [5]. - Total debt significantly decreased by 96% to $18.7 million from $426.4 million, following the redemption of $400 million in senior secured notes [6]. Capital Allocation - The company repurchased 807,437 shares for $19.7 million during the first quarter [7][9]. Outlook - G-III reaffirmed its net sales guidance for fiscal 2026, expecting approximately $3.14 billion in net sales, down from $3.18 billion in fiscal 2025 [10]. - The company anticipates net sales for the second quarter to be around $570 million, impacted by supply chain challenges [11]. - Net income for the second quarter is projected to be between $1.0 million and $6.0 million, a decrease from $24.2 million in the prior year [12].

Financial Performance - G-III Apparel Group is set to release its first-quarter financial results on June 6, with expected earnings of 13 cents per share, an increase from 12 cents per share in the same period last year [1] - The company projects quarterly revenue of $580.37 million, down from $609.75 million a year earlier [1] Recent Sales Growth - In the fourth quarter, G-III Apparel reported a sales growth of 9.8% year-on-year, reaching $839.535 million, which exceeded the analyst consensus estimate of $807.590 million [2] Stock Performance - G-III Apparel shares experienced a decline of 2.6%, closing at $27.67 [2] Analyst Ratings - Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating with a price target of $30 for June 2, 2025, with an accuracy rate of 61% [5] - Guggenheim analyst Robert Drbul maintained a Buy rating and raised the price target from $36 to $38 on December 11, 2024, with an accuracy rate of 60% [5]

Core Insights - ReGen III Corp. has opted to pay a semi-annual interest payment of $164,850 on its Series 2023-11.PP55CD-A Debentures through the issuance of approximately 855,598 common shares at a price of $0.19267 per share, pending approval from the TSX Venture Exchange [1] - The company has successfully sold a non-core asset, the Slocan Property, for gross proceeds of $295,000, which was acquired during a business combination in 2010 [2] - ReGen III has received a granted patent for its technology in Brazil, marking its first patent in the country, which has a significant re-refining rate and bans the burning of used motor oil [3] - The European Patent Office granted ReGen III a patent on April 2, 2025, and the company is moving towards the national validation stage in member states [4] - The company currently holds 22 patents issued or granted for its ReGen™ process and has 11 patents pending globally [5] - ReGen III's ReGen™ technology aims to upcycle used motor oil into high-value Group III base oils, with an expected reduction of CO2e emissions by 82% compared to virgin crude-derived base oils [6] - The company has completed FEL2 and value engineering for its 5,600 bpd UMO recycling facility in Texas, collaborating with several engineering and construction firms [7] - ReGen III aims to become the world's largest producer of sustainable re-refined Group III base oil, operating in an underserved segment of the base oils market [7]