G-III Will Raise Its Profit Target

According to the world clothing shoes and hats net,

Apparel Group Ltd. (NASDAQ:GIII) changed from profit to loss in the first quarter of fiscal year 2018, but sales grew better than market expectations.

Manufacturers and retailers also raised their annual sales and profit targets, stimulating the stock price surged 29.7% to 25.79 dollars in the intraday market today.

Affected by the related costs arising from last year's acquisition of Donna Karan International (DKI), G-III Apparel Group Ltd. recorded a net loss of $10 million 400 thousand, or a diluted loss of $0.21 per share for the first quarter of April 30th, compared with a net profit of $2 million 800 thousand or $0.06 per diluted share in the same period last year.

Excluding the one-time cost of M & A, the adjusted diluted share loss was $0.18, far below the market forecast of $0.40.

In the quarterly report, the group said that DKI business has reached inflection point and is expected to make profits in the second half of the fiscal year.

Therefore, in the current two quarter, the Group expects to still record a diluted share loss of 0.41-0.51 US dollars, and the adjusted diluted earnings per share is expected to be 0.24-0.34 dollars, and the market is expected to be $0.42.

Net sales rose 15.7% to $529 million in the first quarter, 6.2% higher than the 498 million dollars expected.

Morris Goldfarb, chairman and chief executive officer of G-III Apparel Group Ltd., revealed that during the period after the earnings analysts' conference call, "department store business maintained health", wholesale business continued to show strong growth, indicating that the group's brand portfolio had the ability to withstand difficult market environment.

13% growth is also achieved.

But the retail business is as expected as a loss. Morris Goldfarb said that in order to reduce losses, the group is taking measures to reduce the operating cost of retail business, close or reorganize stores and strengthen the supply of store products.

Following the end of last fiscal year, some 60 Wilson brands and Bass brand stores were closed. In the first quarter, the group closed 69 stores further, and there were 45 stores closing plans for the rest of the fiscal year, and there were at least 15 stores that would be reset to DKNY or Karl Lagerfeld brand stores.

Morris Goldfarb also mentioned the growth potential of Tommy Hilfiger and Karl Lagerfeld to analysts. He disclosed that the orders of the two brands increased by nearly 2 times and 1 times compared with the same period last year.

G-III Apparel Group Ltd. now expects net sales for the year to rise from $2 billion 720 million to $2 billion 760 million, with a market expectation of $2 billion 720 million, and adjusted EPS target from US $2 billion 720 million to US $2 billion 720 million, with a market expectation of US $2 billion 720 million US $1.01.

For the two quarter, the sales target was $520 million.

At the time of the deadline, the G-III Apparel Group Ltd. (NASDAQ:GIII) midday increase narrowed to 13.5%, at $22.58.

As of Monday's close, the stock had fallen by 32% in 2017.

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