[ACCESSWIRE]
Upcoming AWS Coverage on lululemon athletica Post-Earnings Results
LONDON, UK / ACCESSWIRE / December 8, 2016 / Active Wall St. announces its post-earnings coverage on G-III Apparel Group, Ltd. (NASDAQ: GIII). The Company posted its third quarter fiscal 2017 financial results on December 01, 2016. The clothing and accessories maker's earnings and sales numbers missed market forecasts. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of G-III Apparel's competitors within the Textile - Apparel Clothing space, lululemon athletica inc. (NASDAQ: LULU), reported on December 07, 2016, its financial results for the third quarter fiscal year 2016. AWS will be initiating a research report on lululemon athletica in the coming days.
Today, AWS is promoting its earnings coverage on GIII; touching on LULU. Get our free coverage by signing up to:
http://www.activewallst.com/registration-3/?symbol=GIII
http://www.activewallst.com/registration-3/?symbol=LULU
Earnings Reviewed
For the third quarter ended October 31, 2016, G-III reported that net sales totaled $883 million as compared to $910 million in the year-ago same period. The company's revenue did not meet analysts' forecasts of $937.8 million. G-III's EBITDA in Q3 FY17 was $122 million compared to $147 million in Q3 FY16. The company's gross margin percentage was 36.4% in the three-month period ended October 31, 2016, compared to 37% in the prior year's comparable period.
The Company's net income for Q3 FY17 was $70.6 million, or $1.50 per diluted share, compared to $87.2 million, or $1.87 per diluted share, in the prior year's comparable period. On an adjusted basis, excluding items resulting in other income equal to $0.02 per share in Q3 FY17, G-III's non-GAAP net income per diluted share for the reported quarter was $1.50 compared to $1.85 in the prior year's Q3. The New York-based company's earnings numbers did not meet Wall Street's expectations of $1.53 per share.
Segment Results
For Q3 FY17, net sales of G-III's wholesale operations decreased 1.6% to $794.4 million compared to net sales of $807 million in Q3 FY16. In the wholesale segment, a $65 million sales increase in the company's non-outerwear business was offset by a larger than expected decline in outerwear. The gross margin percentage in company's wholesale operation segment was 34.4% in Q3 FY17 compared to 34.7% in last year's same quarter.
During Q3 FY17, G-III's net sales from its retail operations decreased 14% to $107.2 million from $124.7 million in Q3 FY16, primarily due to same store sales decreases of 20% in the Wilsons stores and 11% for its G.H. Bass stores compared to the prior year's same quarter. The gross margin percentage in the company's retail operations segment was 45.2% compared to 45.9% in the prior year's same quarter.
Donna Karan
On the same day of its earnings release, G-III announced that it has completed its acquisition of Donna Karan International, Inc., parent of the Donna Karan and DKNY brands. The company funded the total purchase price of $650 million, subject to certain adjustments, with a combination of cash, $75 million of newly issued shares of its common stock to LVMH, and a $125 million junior lien seller note, of which $75 million in principal amount has a six and a half year maturity and $50 million in principal amount has a seven year maturity. The cash portion of the purchase price was paid from the proceeds of a $350 million six-year senior secured term loan, and the balance from borrowings under a $650 million five-year senior secured asset based revolving credit facility and cash on hand. The new revolving credit facility refinanced and replaced the Company's existing credit facility.
Balance Sheet
As of October 29, 2016, G-III's accounts receivable were flat at $537 million compared to accounts receivable at the end of Q3 FY16. The company's inventory decreased approximately 4% to $491 million compared to $510 million at the end of the year ago comparable third quarter. During FY17, the company has spent approximately $18 million on capital expenditures, primarily due to leasehold improvements for new and remodeled Wilsons, G.H. Bass, and Vilebrequin stores, as well as fixed ring costs at department stores. At the end of Q3 FY17, G-III had a net debt position of $46 million compared to $118 million at the end of Q3 FY16.
Outlook
For FY17, G-III is forecasting net sales of approximately $2.43 billion and net income between $67 million and $72 million, or a range between $1.41 and $1.51 per diluted share. On an adjusted basis, the company updated its FY17 forecast for net sales of $2.41 billion and net income between $87 million and $93 million, or a range between $1.86 and $1.96 per diluted share, compared to its previous guidance of net sales of approximately $2.48 billion and net income between $102 million and $106 million, or a range between $2.16 and $2.26 per diluted share.
Stock Performance
On Wednesday, the stock closed the trading session at $31.02, rising 4.48% from its previous closing price of $29.69. A total volume of 1.05 million shares have exchanged hands, which was higher than the 3-month average volume of 775.81 thousand shares. G-III Apparel's stock price advanced 17.72% in the last month. Shares of the company have a PE ratio of 14.96 and currently have a market cap of $1.38 billion.
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