G-III Apparel Group falls from net income to loss in Q2
Staff Writer |
G-III Apparel Group announced operating results for the second quarter of fiscal 2017 that ended July 31, 2016. Net sales decreased 7% to $442.3 million from $473.9 million in the year-ago period.
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G-III Apparel reported a net loss of $1.3 million, or $0.03 per share, compared to net income of $12.5 million, or $0.27 per diluted share, in the prior year's comparable period.
G-III Apparel's results for the second quarter included professional fees of approximately $3 million, equal to approximately $0.04 per share, net of taxes, in connection with its pending acquisition of Donna Karan.
G-III Apparel today revised its prior guidance for the full fiscal year ending January 31, 2017.
G-III Apparel is now forecasting 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, compared to its previous guidance of net sales of approximately $2.56 billion and net income between $120 million and $125 million, or a range between $2.55 and $2.65 per diluted share.
For the fiscal 2016 year ended January 31, 2016, net sales were $2.34 billion and net income was $114.3 million, or $2.46 per diluted share.
The current year's fiscal 2017 forecast includes professional fees of approximately $3.0 million, equal to approximately $0.04 per share, net of taxes, in connection with its pending acquisition of Donna Karan, but does not reflect the significant additional expenses related to this acquisition that the company expects to incur in the second half of the fiscal year or the impact of the issuance of new G-III common stock to the seller.
On an adjusted basis, the company is now forecasting non-GAAP net income per diluted share for fiscal 2017 between $2.20 and $2.30 per diluted share as compared to $2.44 per diluted share in fiscal 2016.
Non-GAAP net income diluted per share for fiscal 2017 excludes the effect of the expenses incurred in the second quarter of fiscal 2017 in connection with the pending acquisition of Donna Karan, and does not reflect the significant additional expenses that the company expects to incur in the second half of fiscal 2017 in connection with this acquisition or the impact of the issuance of new G-III common stock to the seller.
G-III Apparel is now projecting adjusted EBITDA for fiscal 2017 to decrease from the prior year between 2% and 5% to between approximately $199 million and $206 million.
This compares to its previous guidance of adjusted EBITDA between approximately $228 million and $236 million.
Adjusted EBITDA for fiscal 2016 was $210.1 million. Adjusted EBITDA for fiscal 2017 does not reflect the significant additional expenses related to this acquisition of Donna Karan that the company expects to incur in the second half of the fiscal year.
For its third fiscal quarter ending October 31, 2016, the company is forecasting net sales of approximately $940 million compared to $910 million in the comparable quarter last year.
G-III Apparel is also forecasting net income for the third fiscal quarter between $70 million and $76 million, or between $1.50 and $1.60 per diluted share, compared to net income of $87.2 million, or $1.87 per diluted share, in last year's third quarter.
The third quarter forecast does not reflect any additional expenses related to the pending acquisition that may be incurred in the third quarter of the fiscal year.
On an adjusted basis, excluding items resulting in other income in the third fiscal quarter ended October 31, 2015 of $0.02 per share, net of taxes, non-GAAP net income per diluted share was $1.85 in the third fiscal quarter ended October 31, 2015. ■