Tuesday, June 6, 2017

G-III Anticipates Return to Profitability This Year (GIII)

G-III Apparel Group Ltd. (GIII
G-III Apparel Group Ltd
GIII
23.41
+17.70%
​), the parent company of Tommy Hilfiger, Calvin Klein and Donna Karan brands, said it expects to return to profitability soon as it reported a first-quarter loss that was significantly smaller than the Street expected.

G-III reported a first-quarter adjusted net loss of 18 cents per share, versus the 40-cents-per-share loss analysts had expected. Including charges like those related to the acquisition of Donna Karan brand, G-III Apparel had a net loss of $10.4 million, or 21 cents per share, compared to earnings of $2.8 million the year prior.
Still, with net sales surging 16 percent to a record $529 million in the first quarter, G-III said it expects to return to profitability by the end of the year, thanks to its Donna Karan business. It now expects net income of $52 million to $57 million for the fiscal 2017 year. (See also: Luxury Jewelers Lose Sparkle for Investors.)
"We are reducing operating costs in our retail business, closing and repurposing stores and enhancing our store product offerings, all which are intended to help us significantly reduce the losses in our retail operations," said CEO Morris Goldfarb in a statement. “We are approaching an inflection point for the Donna Karan business where our efforts are expected to yield profitable results.”
Burberry Group plc., which was downgraded Tuesday for its under-performance in sales, is another luxury brand expecting to improve profitability this year. The London-based retailer, which reported a pretax profit of $509.6 million for fiscal 2016, expects to save $129 million next year through cost-cutting measures.
G-III shares were up 13.55 percent midday Tuesday, yet still trading near the bottom of the stock's 52-week range of $18.00 to $51.81. The stock is down 24.1 percent year to date, and down 47 percent the past year.

No comments:

Post a Comment