G-III's Q2 Revenue Beats Expectations, But Full-Year Sales Guidance Falls Short

G-III's Q2 revenue beats expectations at $613.3 million, a 4.9% YoY decline, but full-year sales guidance misses expectations significantly. The company's non-GAAP profit of $0.25 per share was significantly above analysts' consensus estimates. G-III's operating margin fell to 2.7% from 6.4% in the same quarter last year.

G-III Apparel Group, Ltd. (NASDAQ: GIII) reported its second-quarter fiscal 2026 results, showing a 5% year-over-year (YoY) decline in net sales to $613.3 million, despite beating analysts' expectations. The company's earnings per diluted share (EPS) of $0.25 per share also exceeded guidance but fell 53% from the prior year's $0.53. The operating margin dropped to 2.7% from 6.4% in the same quarter last year.

The company attributed the YoY decline in revenue to a challenging macroeconomic environment, cautious retail partners, and a $155 million incremental tariff impact. Despite these headwinds, G-III maintained a strong balance sheet with $301.8 million in cash and significantly reduced debt to $15.5 million, down 96% year-over-year after redeeming $400 million in senior secured notes.

G-III's updated fiscal 2026 guidance revealed substantial challenges. The company now projects annual revenue of approximately $3.02 billion, down from $3.18 billion in fiscal 2025. More alarmingly, annual EPS is expected to fall to between $2.53 and $2.73, compared to $4.20 in fiscal 2025 – representing a 35-40% profit decline. Adjusted EBITDA is projected to decrease to $198-208 million from $325.9 million, a 36-39% reduction.

Management cited three key factors behind the guidance reduction: a challenging macroeconomic environment, cautious retail partners, and most significantly, tariff impacts. The company quantified the tariff impact at approximately $155 million, with mitigation efforts reducing the net impact to $75 million.

The company's capital allocation strategy shows confidence through $24.6 million in share repurchases during Q2. Management emphasized their strategic focus on key brands like DKNY, Donna Karan, Karl Lagerfeld, and Vilebrequin, which are showing momentum despite overall sales declines. The company is also navigating the transition away from expiring licenses, which adds another layer of complexity to their business transformation.

[1] https://www.stocktitan.net/news/GIII/g-iii-apparel-group-ltd-reports-second-quarter-fiscal-2026-results-4jkjuq4cb5s7.html