G-lll Apparel Group Ltd.’s comeback is starting to gain traction.
The manufacturer and retailer, parent to the DKNY and Donna Karan brands, revealed quarterly earnings Tuesday before the market opened, falling short on both top and bottom lines, but still managing to log a $63 million profit. Company shares rose more than 8 percent in pre-market hours as a result.
“Our results reflect a significant sequential improvement in the third quarter as we effectively developed product lines that aligned with the shift in consumer demand towards casual, comfortable and functional clothing,” Morris Goldfarb, G-III’s chairman and chief executive officer, said in a statement. “We believe our product assortments for our portfolio of global brands are responsive to today’s market trends as we continue to gain market share.”
The company — which also includes Vilebrequin, Eliza J, Jessica Howard, Andrew Marc and Marc New York in the greater portfolio, in addition to fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld Paris, Kenneth Cole, Cole Haan, Guess, Vince Camuto, Levi’s and Dockers brands — reported total revenues of $826 million for the three-month period ending Oct. 31. That’s a 26.7 percent reduction from $1.12 billion in revenues the same time last year. Still, quarterly profits were more than $63 million, compared with $95 million a year ago — and a $15 million loss in the second quarter.
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At least part of the loss in revenues was from recent or planned store closures. In September, the company said that it was permanently closing all 110 Wilsons Leather and 89 G.H. Bass stores by the end of fiscal year 2021. Net sales in the retail operations segment for the two brands in the most recent quarter were $38 million, compared with nearly $60 million from a year ago, as a result.
G-lll Apparel ended the quarter with more than $149 million in cash and cash equivalents and $508 million in long-term debt. The company is expecting net sales to decline by about 30 percent in the current quarter, compared with last year’s results.
Shares of G-111 Apparel, which closed down 2.04 percent Monday to $23.98 a piece, are down nearly 17 percent year-over-year.
“We are very fortunate and appreciative to have an experienced and talented global team at G-III that has proactively met the extraordinary challenges presented by the pandemic,” Goldfarb said in his prepared remarks. “We ended the quarter with a strong financial position, with approximately $800 million of [working capital] and availability under our revolving credit facility. We are well positioned to complete the year in line with our expectations.”
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