GIII Stock Falls 11% After Q4 Earnings Miss Estimates & Sales Dip Y/Y

Core Insights - G-III Apparel Group, Ltd. reported disappointing fourth-quarter fiscal 2026 results, with both net sales and earnings falling short of the Zacks Consensus Estimate, reflecting a year-over-year decline [1][5] Financial Performance - Adjusted earnings per share (EPS) were 30 cents, missing the Zacks Consensus Estimate of 57 cents, and decreased by 76.4% from the previous year's earnings of $1.27 per share [5] - Net sales fell 8.1% year over year to $771.5 million, also below the consensus estimate of $794 million, with approximately $20 million in lost sales attributed to the suspension of shipments to Saks prior to its bankruptcy [5][6] - The wholesale segment generated net sales of $737 million, missing the Zacks Consensus Estimate of $747.1 million, and reflecting a 7.8% decrease from the prior year [6] - The retail segment's net sales were $63 million, meeting the consensus estimate and representing a 12.5% increase compared to $56 million in the prior-year quarter [7] Margins and Expenses - Gross profit decreased 13.9% year over year to $285.5 million, with a gross margin of 37%, down 250 basis points year over year, primarily due to tariffs [8] - Adjusted SG&A expenses totaled $260 million, reflecting a 6.6% increase, which included a $17.5 million bad debt expense related to the Saks bankruptcy [9] - SG&A expenses as a percentage of net sales increased by 470 basis points year over year to 33.7% [10] Financial Position - G-III Apparel ended the fiscal fourth quarter with cash and cash equivalents of $406.7 million and long-term debt of $11.7 million, with total stockholders' equity at $1.76 billion [11] - Inventory increased by 3.8% year over year to $460 million at the end of the quarter [11] Future Outlook - For the first quarter of fiscal 2027, the company expects net sales of approximately $530 million, a 9.2% decline year over year, and anticipates a net loss between $13 million and $18 million [12] - For fiscal 2027, G-III expects net sales of approximately $2.71 billion, an 8% decline compared to fiscal 2026, primarily due to lost sales from Calvin Klein and Tommy Hilfiger products [14] - Expected net income for fiscal 2027 is projected to be between $88 million and $92 million, with EPS of $2.00 to $2.10, indicating a year-over-year increase in net income [15] - The company anticipates gross margin improvement of up to 300 basis points for the full fiscal year, supported by tariff mitigation efforts [20]