US: G-III Apparel’s Q2 profit falls on discounts
- Q2 profit dropped 46.7% to $1.6m
- Net sales rose 21.7% to $230m from $189m
- Lifts full-year forecast
Women’s wear maker G-III Apparel Group Ltd has seen its second quarter profit almost halve after higher levels of discounts offered to retailers ate into margins, but raised its guidance for the year.
The New York based company, which makes clothes under license for Calvin Klein, Sean John, Tommy Hilfiger and Kenneth Cole and also owns the Andrew Marc brand, said net income fell 46.7% to $1.6m or $0.08 per share in the three months to 31 July, down from $3.0m or $0.15 per share, a year earlier.
“We had a strong second quarter from a revenue perspective, but some softness in the market prompted us to provide higher levels of support and discounts to our customers,” explained chairman and CEO Morris Goldfarb.
“While this affected our gross margin in the quarter, we have done a good job of stimulating demand and keeping inventories current for us and our retail partners.”
He added: “We are shipping on a solid pace as we enter our key selling season. We believe that we are positioned properly for a strong second half.”
Looking ahead, the company raised its full year forecast for net sales of $1.25bn and net income between $62.5m and $64.5m or a range of $3.05 and $3.15 per share. This compares to earlier guidance for net sales of $1.2bn and net income between $64.5m and $66.5m or a range of $3.15 and $3.25 per share.
G-III Apparel Group has inked a deal with Calvin Klein Inc to open Calvin Klein Performance stores and shop in shops selling women's apparel in the US and China....
G-III Apparel Group lowered its full-year profit forecasts after third quarter margins were dented by higher product costs and increased levels of promotion....
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