US' G-III Apparel reports $613.3 mn Q2 sales; updates FY26 outlook

The selling, general and administrative (SG&A) expenses stood at $226.8 million, almost flat year-over-year (YoY), while operating profit dropped sharply to $16.3 million from $41.5 million in Q2 FY24.

The net income attributable to G-III fell to $10.9 million, compared to $24.2 million last year. Diluted earnings per share (EPS) were $0.25, compared with $0.53 in the prior-year quarter. Non-GAAP net income per diluted share was $0.25 for Q2. The inventories increased 5 per cent to $639.8 million, and total debt decreased 96 per cent to $15.5 million.

“In the second quarter, we exceeded expectations across both net sales and earnings, driven by the strong momentum of our go-forward portfolio, led by DKNY, Donna Karan, Karl Lagerfeld, and Vilebrequin. These results highlight our ability to execute on our strategic priorities and leverage our powerful corporate platform to maximize the full potential of our globally recognised brands,” said Morris Goldfarb, G-III’s chairman and chief executive officer (CEO) at G-III.

In the first half (H1) of FY26, net sales were $1.2 billion, down 4.6 per cent, and the gross profit declined to $497 million. The operating profit fell to $24.8 million, reflecting higher cost pressures and weaker demand. Net income attributable to the company in H1 stood at $18.7 million. The diluted EPS for H1 came in at $0.42, as the company faced continued top-line and profitability challenges, G-III said in a press release.

The company is projecting net sales of $3.02 billion in FY26. The net income is forecast to range between $112 million and $122 million, translating into diluted EPS of $2.53–$2.73. On a non-GAAP basis, net income is expected between $113 million and $123 million, or EPS of $2.55–$2.75, compared with $4.42 in FY25.

The adjusted EBITDA is guided at $198 million–$208 million. The company expects net interest expense of $5 million and an effective tax rate of 29.9 per cent. Tariffs are expected to add incremental costs of $155 million, of which $75 million remains unmitigated despite vendor support, sourcing changes, and targeted price increases. The majority of this impact is expected in the second half of the year, added the release.

“Looking ahead, we have updated fiscal 2026 guidance to reflect the current macro environment, a more cautious outlook from our retail partners, as well as the impact of tariffs on our top and bottom lines. We are actively mitigating tariff pressures through a combination of vendor participation, selective sourcing shifts, and targeted price increases,” added Goldfarb. “I am confident in our ability to successfully navigate the challenging environment and responsibly exit the expiring licenses. Our strong balance sheet and dynamic business model provides the flexibility to invest in our brands as well as pursue strategic opportunities to drive long-term growth and shareholder value.”

ALCHEMPro News Desk (SG)