G-III Apparel Group Reports Slight Increase in Net Sales to $2.34 Billion

G-III Apparel Group, Ltd. reported its financial results for the nine months ended October 31, 2024, revealing a slight increase in net sales to $2.34 billion, up from $2.33 billion in the same period last year. The company's wholesale operations segment generated $2.28 billion in sales, consistent with the previous year, while retail operations saw a rise in sales to $110.1 million from $97.3 million. The increase in retail sales was attributed to improved performance at Karl Lagerfeld Paris stores, despite a reduction in the number of retail locations from 62 to 51.

The company's gross profit for the nine-month period was $966.9 million, representing 41.3% of net sales, compared to $959.9 million or 41.1% in the prior year. The gross profit margin in the wholesale segment decreased slightly to 39.8%, while the retail segment improved to 51.5%. Selling, general, and administrative expenses rose to $724.9 million, primarily due to increased advertising and compensation costs, reflecting the company's investment in brand relaunches, particularly for Donna Karan.

In terms of strategic developments, G-III Apparel Group completed the acquisition of the remaining 25% interest in its joint venture, Fabco, in April 2024, making it a wholly-owned subsidiary. Additionally, the company increased its stake in AWWG Investments B.V. to 18.7% through two transactions in 2024, aimed at enhancing its international expansion efforts. The company also entered into new licensing agreements for brands such as Converse and BCBG, which are expected to contribute to future revenue growth.

Operationally, G-III faced challenges with cash flow, reporting a net cash outflow of $17 million from operating activities during the nine months, primarily due to increases in accounts receivable and inventory. The company utilized $117.6 million in investing activities, largely for its investment in AWWG and capital expenditures. Financing activities resulted in a net cash outflow of $267.5 million, driven by the redemption of $400 million in senior secured notes and share repurchases totaling $60 million.

Looking ahead, G-III Apparel Group remains focused on leveraging its brand portfolio and expanding its market presence. The company anticipates that its strategic investments and new product launches will drive growth, despite ongoing challenges such as inflationary pressures and supply chain disruptions. The management expressed optimism about the potential of the Donna Karan brand following its recent relaunch and is committed to enhancing its digital and retail channels to meet evolving consumer demands.