G-III Apparel (GIII) - 2026 Q2 - Quarterly Results

Executive Summary & Highlights G-III exceeded Q2 FY26 net sales and earnings expectations, driven by strong brand performance, while updating fiscal 2026 guidance to reflect macro environment, cautious retail partners, and tariff impacts CEO Commentary G-III's CEO reported exceeding Q2 FY26 net sales and earnings, driven by strong brand performance, and updated fiscal 2026 guidance to reflect macro conditions, cautious retail partners, and tariff mitigation efforts - Exceeded expectations across net sales and earnings in Q2 FY26, driven by strong momentum from key portfolio brands[3] - Updated fiscal 2026 guidance reflects the current macro environment, cautious retail partners, and tariff impacts[3] - Actively mitigating tariff pressures through vendor participation, sourcing shifts, and targeted price increases[3] Second Quarter Fiscal 2026 Highlights Key highlights for Q2 FY26 include net income per diluted share and net sales exceeding guidance, significant share repurchases, a strong cash position, and updated fiscal 2026 guidance - Net Income Per Diluted Share of $0.25 and Net Sales of $613.3 million for the Second Quarter both exceeded guidance[6] - Repurchased $24.6 million or 1,140,988 shares in the Second Quarter[6][9] - Maintains a strong cash and availability position[6] - Provided updated fiscal 2026 guidance[6] Second Quarter Fiscal 2026 Financial Performance This section details G-III's financial results for Q2 FY26, including GAAP and non-GAAP performance, balance sheet data, and capital allocation activities Results of Operations (GAAP) For Q2 FY26, G-III Apparel Group reported decreases in net sales, net income, and diluted earnings per share compared to the prior year's quarter Second Quarter Fiscal 2026 GAAP Financial Results | Metric | Q2 FY26 (Ended Jul 31, 2025) | Q2 FY25 (Ended Jul 31, 2024) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :--------- | | Net Sales (Millions USD) | $613.3 | $644.8 | -5.0% | | Net Income (Millions USD) | $10.9 | $24.2 | -54.9% | | Diluted EPS ($) | $0.25 | $0.53 | -52.8% | Non-GAAP Financial Results Non-GAAP net income per diluted share for Q2 FY26 was $0.25, compared to $0.52 in the prior year, after excluding specific one-time adjustments Second Quarter Fiscal 2026 Non-GAAP Diluted EPS | Metric | Q2 FY26 (Ended Jul 31, 2025) ($) | Q2 FY25 (Ended Jul 31, 2024) ($) | | :--------------------------- | :--------------------------- | :--------------------------- | | Non-GAAP Net Income Per Diluted Share | $0.25 | $0.52 | - Non-GAAP adjustments for Q2 FY26 excluded $0.3 million in one-time severance expenses, while Q2 FY25 excluded a ($0.6) million gain on liability forgiveness[5] Balance Sheet and Capital Allocation As of July 31, 2025, inventories increased by 5%, total debt significantly decreased by 96% due to senior secured note redemption, and the company repurchased 1,140,988 shares for $24.6 million Selected Balance Sheet Data (as of July 31) | Metric | FY26 (2025) (Millions USD) | FY25 (2024) (Millions USD) | Change (%) | | :-------- | :------------------- | :------------------- | :--------- | | Inventories | $639.8 | $610.5 | +5.0% | | Total Debt | $15.5 | $414.0 | -96.3% | - Voluntarily redeemed $400.0 million in senior secured notes in August 2024 using cash and revolving credit facility borrowings[8] - Share repurchases totaled 1,140,988 shares for $24.6 million in Q2 FY26[9] Fiscal 2026 and Third Quarter Fiscal 2026 Outlook This section provides G-III's updated financial guidance for fiscal 2026 and Q3 FY26, including GAAP and non-GAAP projections, and details on tariff impacts and mitigation strategies Fiscal 2026 Guidance The company provided updated fiscal 2026 guidance, anticipating declines in net sales, net income, and EPS compared to fiscal 2025, reflecting current macro conditions and tariff impacts, with both GAAP and Non-GAAP figures GAAP Guidance For fiscal 2026, GAAP net sales are expected to be approximately $3.02 billion, with net income between $112.0 million and $122.0 million, and diluted EPS between $2.53 and $2.73, all decreasing from fiscal 2025 Fiscal 2026 GAAP Guidance vs. Fiscal 2025 Actuals | Metric | FY26 Guidance (Expected) | FY25 Actual (Prior Year) | | :------------ | :----------------------- | :----------------------- | | Net Sales (Billions USD) | ~$3.02 | $3.18 | | Net Income (Millions USD) | $112.0 - $122.0 | $193.6 | | Diluted EPS ($) | $2.53 - $2.73 | $4.20 | Non-GAAP Guidance Non-GAAP net income for fiscal 2026 is projected to be between $113.0 million and $123.0 million, with diluted EPS between $2.55 and $2.75, also showing a decline from fiscal 2025 Fiscal 2026 Non-GAAP Guidance vs. Fiscal 2025 Actuals | Metric | FY26 Guidance (Expected) | FY25 Actual (Prior Year) | | :-------------------- | :----------------------- | :----------------------- | | Non-GAAP Net Income (Millions USD) | $113.0 - $123.0 | $203.6 | | Non-GAAP Diluted EPS ($) | $2.55 - $2.75 | $4.42 | Other Financial Projections Additional fiscal 2026 projections include Adjusted EBITDA between $198.0 million and $208.0 million, net interest expense of approximately $5.0 million, and an estimated tax rate of 29.9% Fiscal 2026 Other Financial Projections | Metric | FY26 Guidance (Expected) | FY25 Actual (Prior Year) | | :--------------------- | :----------------------- | :----------------------- | | Adjusted EBITDA (Millions USD) | $198.0 - $208.0 | $325.9 | | Net Interest Expense (Millions USD) | ~$5.0 | N/A | | Estimated Tax Rate (%) | 29.9 | N/A | Third Quarter Fiscal 2026 Guidance For Q3 FY26, net sales are expected to be approximately $1.01 billion, with net income between $62.0 million and $72.0 million, and diluted EPS between $1.43 and $1.63, all indicating a decline from the prior year Third Quarter Fiscal 2026 Guidance vs. Prior Year | Metric | Q3 FY26 Guidance (Expected) | Q3 FY25 Actual (Prior Year) | | :------------ | :-------------------------- | :-------------------------- | | Net Sales (Billions USD) | ~$1.01 | $1.09 | | Net Income (Millions USD) | $62.0 - $72.0 | $114.8 | | Diluted EPS ($) | $1.43 - $1.63 | $2.55 | Tariff Impact and Mitigation The company anticipates a total incremental tariff cost of approximately $155 million for fiscal 2026, partially offset by mitigation efforts, leaving an estimated unmitigated impact of $75 million, primarily in the second half - Anticipates a total incremental tariff cost of approximately $155 million for fiscal 2026[10] - Tariff costs are partially offset through vendor participation, strategic sourcing shifts, and targeted price increases[10] - The remaining unmitigated tariff impact, reflected in fiscal 2026 guidance, is estimated at $75 million, primarily weighted to the second half of the year[10] Company Overview & Disclosures This section provides an overview of G-III Apparel Group, its brand portfolio, explanations of non-GAAP financial measures, and important disclosures regarding forward-looking statements and associated risks About G-III Apparel Group, Ltd. G-III Apparel Group, Ltd. is a global fashion leader specializing in design, sourcing, distribution, and marketing, managing a portfolio of over 30 owned and licensed brands - G-III Apparel Group, Ltd. is a global fashion leader with expertise in design, sourcing, distribution, and marketing[18] - Owns ten iconic brands, including DKNY, Donna Karan, Karl Lagerfeld, and Vilebrequin[18] - Licenses over 20 sought-after names in global fashion, including Calvin Klein, Tommy Hilfiger, and major national sports leagues[18] Non-GAAP Financial Measures Explanation The report includes non-GAAP financial measures to provide supplemental information on operational performance by excluding items not indicative of core business results, such as one-time severance expenses and gains on liability forgiveness - Non-GAAP financial measures provide meaningful supplemental information regarding performance[17][23][25][28][31][32] - These measures exclude items not indicative of core business operating results, such as one-time severance expenses, gains on liability forgiveness, asset impairments, and write-off of deferred financing costs[17][23][25][28][31][32] Forward-Looking Statements The document contains forward-looking statements regarding G-III's business outlook, financial performance, and strategic plans, which are subject to various risks and uncertainties, including reliance on licensed products, foreign manufacturing, supply chain disruptions, economic conditions, and tariffs - Statements concerning business outlook, future economic performance, anticipated revenues, expenses, product introductions, and plans are considered forward-looking statements[19] - Forward-looking statements are subject to risks and uncertainties, including reliance on licensed products, foreign manufacturing, supply chain disruptions, economic conditions, and tariff impacts[19] Financial Statements and Reconciliations This section presents G-III Apparel Group's consolidated statements of income and selected balance sheet data, along with detailed reconciliations of GAAP to non-GAAP net income and Adjusted EBITDA for various periods Consolidated Statements of Income This section presents the consolidated statements of income for G-III Apparel Group, Ltd. and Subsidiaries for the three and six months ended July 31, 2025, and 2024, detailing net sales, cost of goods sold, gross profit, operating expenses, and net income Consolidated Statements of Income (In thousands, except per share amounts) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $613,266 | $644,755 | $1,196,875 | $1,254,502 | | Cost of goods sold | 362,795 | 368,881 | 699,860 | 719,735 | | Gross profit | 250,471 | 275,874 | 497,015 | 534,767 | | Selling, general and administrative expenses | 226,845 | 229,030 | 458,340 | 465,651 | | Depreciation and amortization | 7,326 | 5,380 | 13,899 | 14,148 | | Operating profit | 16,300 | 41,464 | 24,776 | 54,968 | | Other income (loss) | (707) | (2,952) | 2,755 | (3,175) | | Interest and financing charges, net | 304 | (4,876) | (157) | (10,300) | | Income before income taxes | 15,897 | 33,636 | 27,374 | 41,493 | | Income tax expense | 4,958 | 9,447 | 8,676 | 11,752 | | Net income | 10,939 | 24,189 | 18,698 | 29,741 | | Less: loss attributable to noncontrolling interests | — | (23) | — | (273) | | Net income attributable to G-III Apparel Group, Ltd. | $10,939 | $24,212 | $18,698 | $30,014 | | Net income attributable to G-III Apparel Group, Ltd. per common share: | | | | | | Basic ($) | $0.26 | $0.54 | $0.43 | $0.67 | | Diluted ($) | $0.25 | $0.53 | $0.42 | $0.65 | | Weighted average shares outstanding: | | | | | | Basic (Shares) | 42,777 | 44,569 | 43,254 | 45,022 | | Diluted (Shares) | 44,219 | 45,483 | 44,795 | 46,105 | Selected Balance Sheet Data This section provides selected balance sheet data for G-III Apparel Group, Ltd. and Subsidiaries as of July 31, 2025, and 2024, including key assets, liabilities, and equity figures Selected Balance Sheet Data (in thousands) | Metric | As of July 31, 2025 (Thousands USD) | As of July 31, 2024 (Thousands USD) | | :------------------------ | :------------------ | :------------------ | | Cash and cash equivalents | $301,778 | $414,791 | | Working capital | 812,675 | 1,047,653 | | Inventories | 639,756 | 610,492 | | Total assets | 2,690,981 | 2,696,287 | | Total debt | 15,481 | 413,968 | | Operating lease liabilities | 280,295 | 218,733 | | Total stockholders' equity | 1,708,521 | 1,512,635 | Reconciliation of GAAP to Non-GAAP Net Income This section reconciles GAAP to non-GAAP net income for the three and six months ended July 31, 2025, and 2024, by adjusting for one-time severance expenses and a gain on forgiveness of liabilities, along with their income tax impacts Reconciliation of GAAP Net Income to Non-GAAP Net Income (In thousands) | Metric | Three Months Ended July 31, 2025 (Thousands USD) | Three Months Ended July 31, 2024 (Thousands USD) | Six Months Ended July 31, 2025 (Thousands USD) | Six Months Ended July 31, 2024 (Thousands USD) | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net income attributable to G-III Apparel Group, Ltd. | $10,939 | $24,212 | $18,698 | $30,014 | | Excluded from non-GAAP: | | | | | | One-time warehouse related severance expenses | 349 | — | 1,327 | — | | Gain on forgiveness of liabilities | — | (600) | — | (600) | | Income tax impact of non-GAAP adjustments | (108) | 168 | (420) | 168 | | Non-GAAP net income attributable to G-III Apparel Group, Ltd., as defined | $11,180 | $23,780 | $19,605 | $29,582 | Reconciliation of GAAP to Non-GAAP Net Income Per Share This section provides a reconciliation of GAAP diluted net income per common share to non-GAAP diluted net income per common share for the three and six months ended July 31, 2025, and 2024, detailing the per-share impact of non-GAAP adjustments Reconciliation of GAAP Net Income Per Share to Non-GAAP Net Income Per Share | Metric | Three Months Ended July 31, 2025 ($) | Three Months Ended July 31, 2024 ($) | Six Months Ended July 31, 2025 ($) | Six Months Ended July 31, 2024 ($) | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share | $0.25 | $0.53 | $0.42 | $0.65 | | Excluded from non-GAAP: | | | | | | One-time warehouse related severance expenses | — | — | 0.03 | — | | Gain on forgiveness of liabilities | — | (0.01) | — | (0.01) | | Income tax impact of non-GAAP adjustments | — | — | (0.01) | — | | Non-GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share, as defined | $0.25 | $0.52 | $0.44 | $0.64 | Reconciliation of Net Income to Adjusted EBITDA This section reconciles net income to Adjusted EBITDA for the three months ended July 31, 2025, and 2024, and provides forecasted and actual Adjusted EBITDA for the twelve months ending January 31, 2026, and 2025, by adding back depreciation, interest, taxes, and other specific non-recurring items Reconciliation of Net Income to Adjusted EBITDA (In thousands) | Metric | Three Months Ended July 31, 2025 (Thousands USD) | Three Months Ended July 31, 2024 (Thousands USD) | Forecasted Twelve Months Ending January 31, 2026 (Thousands USD) | Actual Twelve Months Ended January 31, 2025 (Thousands USD) | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------------------------- | :-------------------------------------------- | | Net income attributable to G-III Apparel Group, Ltd. | $10,939 | $24,212 | $112,000 - 122,000 | $193,566 | | One-time warehouse related severance expenses | 349 | — | 1,327 | 1,908 | | Asset impairments | — | — | — | 8,195 | | Gain on forgiveness of liabilities | — | (600) | — | (600) | | Depreciation and amortization | 7,326 | 5,380 | 30,000 | 27,444 | | Interest and financing charges, net | (304) | 4,876 | 5,000 | 18,842 | | Income tax expense | 4,958 | 9,447 | 49,673 | 76,566 | | Adjusted EBITDA, as defined | $23,268 | $43,315 | $198,000 - 208,000 | $325,921 | Reconciliation of Forecasted and Actual GAAP to Non-GAAP Net Income This section reconciles forecasted and actual GAAP net income to non-GAAP net income for various periods, including Q3 FY26, Q3 FY25, FY26, and FY25, by adjusting for specific non-GAAP items Reconciliation of Forecasted and Actual GAAP Net Income to Non-GAAP Net Income (In thousands) | Metric | Forecasted Three Months Ending Oct 31, 2025 (Thousands USD) | Actual Three Months Ended Oct 31, 2024 (Thousands USD) | Forecasted Twelve Months Ending Jan 31, 2026 (Thousands USD) | Actual Twelve Months Ended Jan 31, 2025 (Thousands USD) | | :----------------------------------------- | :------------------------------------------ | :------------------------------------- | :------------------------------------------- | :---------------------------------------- | | Net income attributable to G-III Apparel Group, Ltd. | $62,000 - 72,000 | $114,768 | $112,000 - 122,000 | $193,566 | | Excluded from non-GAAP: | | | | | | One-time warehouse related severance expenses | — | 530 | 1,327 | 1,908 | | Asset impairments | — | — | — | 8,195 | | Write-off of deferred financing costs | — | 1,598 | — | 1,598 | | Gain on forgiveness of liabilities | — | — | — | (600) | | Income tax impact of non-GAAP adjustments | — | (610) | (327) | (1,030) | | Non-GAAP net income attributable to G-III Apparel Group, Ltd., as defined | $62,000 - 72,000 | $116,286 | $113,000 - 123,000 | $203,637 | Reconciliation of Forecasted and Actual GAAP to Non-GAAP Net Income Per Share This section reconciles forecasted and actual GAAP diluted net income per common share to non-GAAP diluted net income per common share for various periods, including Q3 FY26, Q3 FY25, FY26, and FY25, detailing the per-share impact of non-GAAP adjustments Reconciliation of Forecasted and Actual GAAP Net Income Per Share to Non-GAAP Net Income Per Share | Metric | Forecasted Three Months Ending Oct 31, 2025 ($) | Actual Three Months Ended Oct 31, 2024 ($) | Forecasted Twelve Months Ending Jan 31, 2026 ($) | Actual Twelve Months Ended Jan 31, 2025 ($) | | :----------------------------------------- | :------------------------------------------ | :------------------------------------- | :------------------------------------------- | :---------------------------------------- | | GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share | $1.43 - 1.63 | $2.55 | $2.53 - 2.73 | $4.20 | | Excluded from non-GAAP: | | | | | | One-time warehouse related severance expenses | — | 0.01 | 0.03 | 0.04 | | Asset impairments | — | — | — | 0.18 | | Write-off of deferred financing costs | — | 0.04 | — | 0.03 | | Gain on forgiveness of liabilities | — | — | — | (0.01) | | Income tax impact of non-GAAP adjustments | — | (0.01) | (0.01) | (0.02) | | Non-GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share, as defined | $1.43 - 1.63 | $2.59 | $2.55 - 2.75 | $4.42 |