G-III Apparel 2026 Q3 Earnings EPS Declines 27.1% Despite Strong Brand Performance

G-III Apparel (GIII) reported fiscal 2026 Q3 earnings on Dec 9, 2025, with non-GAAP EPS of $1.90, exceeding the $1.60 forecast but trailing the $2.62 EPS in 2025 Q3. Revenue fell 9.0% to $988.65 million, missing estimates. The company raised full-year non-GAAP EPS guidance to $2.80–$2.90, reflecting confidence in owned brands and cost mitigation.

Revenue

The company’s total revenue decreased by 9.0% to $988.65 million in 2026 Q3, down from $1.09 billion in 2025 Q3. Wholesale operations drove the majority of revenue at $977.31 million, supported by strong demand for owned brands like Donna Karan and Karl Lagerfeld. Retail revenue contributed $45.67 million, while intersegment eliminations reduced total revenue by $34.33 million. The decline was attributed to reduced sales from Calvin Klein and Tommy Hilfiger license agreements, partially offset by organic growth in higher-margin owned brands.

Earnings/Net Income

G-III Apparel’s EPS declined 27.1% to $1.91 in 2026 Q3 from $2.62 in 2025 Q3, while net income fell 29.8% to $80.59 million, down from $114.77 million. The EPS beat consensus estimates but reflected margin pressures from tariffs and higher costs. Despite the decline, the company’s focus on owned brands and disciplined cost management supported profitability.

Post-Earnings Price Action Review

The strategy of buying GIII when earnings beat and holding for 30 days delivered moderate returns but underperformed the market. The strategy achieved a 53.41% return, trailing the benchmark by 34.88%. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.18, the strategy indicated low risk but conservative returns.

Following the earnings report, GIII’s stock price tumbled 8.90% during the latest trading day but rebounded 4.76% during the most recent full trading week. Month-to-date gains reached 12.07%, reflecting mixed investor sentiment. Analysts noted that while the stock’s volatility aligns with broader market trends, the company’s raised guidance and dividend announcement provided some optimism.

CEO Commentary

Morris Goldfarb, CEO, emphasized the resilience of G-III’s owned brands, including Donna Karan, which grew over 40% in North America, and Karl Lagerfeld, which saw robust performance in women’s and men’s categories. He highlighted strategic priorities such as DTC expansion, international growth, and licensing diversification. Goldfarb expressed confidence in mitigating margin pressures through pricing adjustments and operational efficiency, supported by a $174 million net cash position.

Guidance

G-III updated its fiscal 2026 guidance to $2.98 billion in revenue (down 6% YoY) and $2.80–$2.90 in non-GAAP EPS (up from prior $2.59). Adjusted EBITDA is expected to range between $208M–$213M, down from $326M in 2025, with gross margins projected to decline ~200 bps YoY. Tariff impacts are estimated at $135M gross, with $65M unmitigated in 2026. A new quarterly dividend of $0.10/share was announced, reflecting the company’s strong balance sheet and commitment to shareholder returns.

Additional News

Within three weeks of the earnings report, G-III Apparel announced a $0.10/share quarterly dividend, marking its first-ever dividend program. The company also repurchased $50 million in stock year-to-date, signaling confidence in its capital structure. Additionally, CEO Morris Goldfarb highlighted plans to expand international distribution and explore strategic acquisitions to drive long-term growth. These moves underscore the company’s focus on balancing profitability with shareholder value creation.

The company’s strategic shift toward owned brands and cost optimization is expected to stabilize margins in 2027. Investors will closely monitor the impact of tariff mitigation efforts and the success of DTC expansion initiatives.