The US textile group G-III Apparel Group Ltd. had to accept an unexpectedly significant drop in profits in the third quarter of the 2022/23 financial year. However, sales development was in line with forecasts. That emerges from an interim report published by the parent company of brands such as Donna Karan, DKNY, Karl Lagerfeld and Sonia Rykiel on Wednesday evening.
Accordingly, group sales for the period from August to October amounted to 1.08 billion US dollars (1.03 billion euros), which corresponded to an increase of 6.2 percent compared to the same quarter last year. However, unforeseen special charges as a result of unexpectedly high inventories depressed the result. The operating profit shrank by 38.5 percent to 97.2 million US dollars.
Net income attributable to shareholders fell 42.7 percent to $61.1 million, falling short of guidance. Adjusted for special effects, the quarterly net income fell by 39.2 percent to 65.6 million US dollars.
In view of the latest development, the company lowered its earnings forecast for the current financial year. Management now only expects net income to be between $147 million and $152 million, down from previously expecting $182 million to $187 million. The revenue target remains at $3.15 billion.
G-III also announced that the important licensing partnerships for the Calvin Klein and Tommy Hilfiger brands belonging to the PVH clothing group had been extended until 2027. However, this is a transitional period: PVH plans to gradually take over the wholesale business of the women’s fashion collections of both labels in North America on its own. The latest news was not well received by investors: The share price of G-III immediately fell by more than 30 percent in after-hours trading.