G-III Apparel 2026 Q1 Earnings Strong Performance as Net Income Soars 39.8%

G-III Apparel Group (GIII) reported its fiscal 2026 Q1 earnings on June 6th, 2025. Despite a decline in net sales to $583.6 million, the company posted a net income increase of nearly 40% to $7.8 million, surpassing expectations. The firm reaffirmed its full-year sales guidance but withdrew net income and adjusted EBITDA forecasts due to tariff uncertainties. G-III anticipates Q2 net sales of $570 million, below previous predictions, primarily impacted by supply chain disruptions.

Revenue
G-III Apparel's revenue for the first quarter of fiscal 2026 fell by 4.3% to $583.61 million compared to $609.75 million in the same period last year. The wholesale segment contributed $562.65 million, while retail sales added $36.38 million. The revenue was offset by eliminations of $-15.41 million, resulting in a total of $583.61 million.

Earnings/Net Income
The company saw an increase in earnings per share, with EPS rising 38.5% to $0.18 from $0.13. Net income for the quarter surged 39.8% to $7.76 million from $5.55 million in the prior year, indicating a positive earnings outlook.

Price Action
The stock price of G-III Apparel experienced a decline of 8.20% on the latest trading day, with a drop of 22.51% over the past week and 11.73% month-to-date.

Post-Earnings Price Action Review
The post-earnings strategy of purchasing GIII shares when revenues miss expectations and holding them for 30 days has demonstrated impressive returns, yielding a 92.10% profit with a Sharpe ratio of 0.25. This indicates favorable risk-adjusted returns, but the strategy's maximum drawdown of -65.49% highlights substantial risk, making it suitable for investors with a high risk tolerance. While the strategy shows potential for significant gains, the pronounced volatility may deter more conservative investors.

CEO Commentary
Morris Goldfarb, CEO of G-III Apparel, emphasized the solid first-quarter results, driven by strong growth in brands like DKNY, Karl Lagerfeld, and Donna Karan, which compensated for the exit from the Calvin Klein jeans and sportswear license business. He pointed out the company's strategic focus on sourcing diversification and pricing power, expressing cautious optimism in capturing market share amid economic uncertainties. Goldfarb mentioned postponing the launch of Sonia Rykiel due to unfavorable conditions, asserting it wasn't the right time to introduce a new brand.

Guidance
G-III Apparel reaffirmed its fiscal 2026 net sales guidance at approximately $3.14 billion but withdrew its net income and adjusted EBITDA guidance due to tariff uncertainties. The company expects Q2 net sales to be around $570 million, a decrease from $645 million in the previous year, influenced by timing shifts and supply chain challenges. Non-GAAP net income per diluted share is projected to range between $0.02 and $0.12.

Additional News
G-III Apparel has been actively engaged in share repurchases, acquiring shares worth $19.7 million in the first quarter, reflecting confidence in its future prospects. The company also completed the redemption of its senior secured notes, significantly reducing its debt by 96% from $426.4 million to $18.7 million. Additionally, G-III is taking strategic steps to diversify its sourcing mix and reduce reliance on China, aiming to have less than 20% of its production coming from China by the end of the year, down from nearly 90% several years ago.