G-III sees sales fall 27% in Q3
G-III Apparel Group, Ltd., the owner of brands including DKNY and Donna Karan, reported net sales of $826.6 million for the third quarter ended October 31, 2020, on Tuesday, as the Covid-19 pandemic continued to take its toll on the company’s operations.
This quarterly total reflected a decrease of 26.7% compared to the $1.13 billion in revenues achieved by the group in the same period in the previous year.
G-III is currently restructuring its retail operations, a process which involves the permanent closure of 110 Wilsons Leather and 89 G.H. Bass stores. Net sales at these brands during the third quarter totaled $38.2 million, compared to $59.8 million in the prior-year period. The group expects to complete these store closures before the end of the fiscal year.
Quarterly net income at G-III was $63.2 million, or $1.29 per diluted share, down from $95.4 million, or $1.97 per diluted share, in the previous year’s third quarter.
Nonetheless, G-III chairman and CEO Morris Goldfarb was keen to point out that the company has been making progress in its efforts to deal with the impact of the coronavirus crisis.
“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,” he commented in a release. “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 executive also claimed that the New York-based apparel group is in “a strong financial position,” highlighting that it ended the third quarter with around $800 million of cash and availability under its revolving credit facility.
Year to date, G-III’s sales totaled $1.53 billion, down 36.5% from $2.41 billion in the same nine-month period in the previous year. Net income was $8.90 million, or $0.18 per diluted share, falling from $118.55 million, or $2.42 per diluted share, in the prior-year period.
Looking to the future, G-III has not provided detailed financial guidance due to the ongoing uncertainty surrounding the development of the Covid-19 pandemic. However, the company did reveal that it expects to see a decline of around 30% in its fourth-quarter sales.
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