G-III Apparel Q2 Results Top Estimates, Trims 2015 EPS Outlook

(RTTNews) - Apparel maker G-III Apparel Group Ltd. (GIII) reported Wednesday a profit for the second quarter that increased from last year, reflecting strong double-digit sales growth aided by contribution from the acquired G.H. Bass business. Both earnings per share and quarterly sales topped analysts' expectations.

The company also provided earnings guidance for the third quarter, below Street view, and trimmed its earnings forecast for the full-year 2015, while and raising annual sales outlook.

The company's earnings per share guidance have been impacted by its recent sale of 1.725 million shares in a public offering completed in June of this year.

"We are pleased to report a strong second quarter. In spite of losses related to the transition and repositioning of our recently acquired G.H. Bass business, we were able to show higher overall profits due to strong shipments in our licensed and non-licensed businesses," Chairman and CEO Morris Goldfarb said in a statement.

The New York-based maker of Andrew Marc, Marc New York, Jessica Howard brands reported net income of $6.24 million or $0.29 per share for the second quarter, higher than $3.59 million or $0.17 per share in the prior-year quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 39 percent to $424.01 million from $304.16 million in the same quarter last year, and topped eight Wall Street analysts' consensus estimate of $390.98 million.

The sales growth was driven by a strong wholesale performance across several categories as well as $53.6 million of net sales contribution from the G.H. Bass business that was acquired in November 2013.

Operating profit for the quarter grew to $11.50 million from $7.13 million in the year-ago quarter, and gross profit totaled $148.06 million, up from $99.42 million in the prior-year quarter.

Meanwhile, selling, general and administrative expenses also increased to $131.61 million from $89.04 million last year.

Looking ahead to the third quarter, the company expects earnings in a range of $2.75 to $2.90 per share, on projected net sales of about $805.0 million, while analysts anticipate earnings of $3.14 per share, on quarterly sales of $791.53 million.

The company noted that the revised third quarter guidance includes $0.21 of dilution from the impact of the public offering completed in June.

For fiscal 2015, G-III Apparel trimmed its earnings forecast to a range of $4.00 and $4.15 per share from the prior guidance range of $4.05 and $4.20 per share. Meanwhile, the company also now projects net sales of about $2.11 billion, up from the previous guidance of about $2.06 billion.

Street is currently looking for full-year 2015 earnings of $4.11 per share, on annual sales of $2.07 billion.

The revised guidance includes $0.16 of dilution from the impact of the public offering completed in June.

"Our new G.H. Bass products are arriving in our stores this month and we are confident in our ability to make this a profitable business. We continue to be well positioned to take advantage of acquisition opportunities, deploy our strategic capital and drive enhanced returns for our shareholders," Goldfarb added.

GIII closed Tuesday's regular trading session at $84.18, up $1.18 on a volume of 0.26 million shares.