G-III Apparel Group, Ltd. reported that organic net sales increased 12 percent in the third quarter ended Oct. 31 and by 21 percent including results at G.H. Bass, which it acquired in November 2013.
The brand management company, which holds licenses from all four major U.S. pro sports leagues and more than 100 U.S. colleges and universities, reported net sales reached $812.3 million in the quarter, up $143.6 million, or 21 percent compared with $668.7 million in the third quarter of 2013.
The company’s net income for the third quarter increased to $80.6 million, or $3.53 per diluted share, from $59.6 million, or $2.85 per diluted share, in the prior year’s comparable period. On an adjusted basis, excluding (i) items resulting in other income in the quarter ended Oct. 31, 2014 equal to $0.44 per share, net of taxes, and (ii) expenses in the quarter ended October 31, 2013 associated with the company’s acquisition of G.H.
Bass & Co. and other potential transactions equal to $0.03 per share, net of taxes, non-GAAP net income per diluted share for the third quarter increased to $3.09 from $2.88 in the prior year’s third quarter. A reconciliation of GAAP net income per share to non-GAAP net income per share is presented in a table accompanying the condensed financial statements included in this release.
“Our outerwear shipments were strong and that business performed well at retail," said G-III Chairman, Chief Executive Officer and President Morris Goldfarb. "We experienced growth in several other areas of our business. Our sportswear and dress businesses also contributed to our increased sales and earnings. We believe we are well positioned for the remainder of the year.”
Mr. Goldfarb continued, “We are expecting a good holiday season for both our wholesale and retail businesses."
Outlook
The company revised its prior guidance for the full fiscal year ending Jan. 31, 2015 to reflect its strong third quarter financial performance. The company is now forecasting net sales of approximately $2.13 billion compared to its previous guidance of $2.11 billion. It now expects net income to be between $103.0 million and $106.0 million, or a range between $4.65 and $4.80 per diluted share, compared to its previous guidance of net income between $90.6 million and $93.9 million, or a range between $4.00 and $4.15 per diluted share.
Both the prior and revised guidance includes $0.16 of dilution from the impact of our sale of 1,725,000 shares in a public offering completed in June of this year. In addition, the current annual guidance includes the other income items included in our results for the third quarter equal to $0.45 per share, net of taxes.
The company is forecasting non-GAAP net income per diluted share for the full 2015 fiscal year between $4.20 and $4.35 compared to $3.74 for the 2014 fiscal year.
The company is now projecting adjusted EBITDA for fiscal 2015 to increase between 20 percent and 24 percent to between $176.5 million and $181.5 million compared to adjusted EBITDA of $147.1 million in fiscal 2014 and increasing from its previous guidance of adjusted EBITDA of between approximately $174.0 million and $179.4 million.
The forecasted non-GAAP net income per share and forecasted adjusted EBITDA for the full fiscal 2015 year reflect adjustments that exclude (i) items resulting in other income in fiscal 2015 equal to $0.45 per share, net of taxes, and (ii) expenses associated with the company’s acquisition of G.H. Bass & Co. and other potential transactions incurred in fiscal 2014 equal to $0.03 per share, net of taxes.
Non-GAAP net income per diluted share and adjusted EBITDA should be evaluated in light of the company’s financial results prepared in accordance with U.S. GAAP. Reconciliations of forecasted GAAP net income per share to forecasted non-GAAP net income per share and of GAAP net income to adjusted EBITDA are included in tables accompanying the condensed financial statements in this release.
G-III is a leading manufacturer and distributor of outerwear, dresses, sportswear, swimwear, women’s suits and women’s performance wear, as well as footwear, luggage and women’s handbags, small leather goods and cold weather accessories, under licensed brands, our own brands and private label brands. G-III sells swimwear, resort wear and related accessories under our own Vilebrequin brand. G-III also sells outerwear, dresses and performance wear under our own Andrew Marc and Marc New York brands and has licensed these brands to select third parties in certain product categories. G-III has fashion licenses under the Calvin Klein, Kenneth Cole, Cole Haan, Guess?, Tommy Hilfiger, Jones New York, Jessica Simpson, Vince Camuto, Ivanka Trump, Nine West, Ellen Tracy, Kensie, Mac & Jac, Levi’s and Dockers brands. Through our team sports business, we have licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League, Touch by Alyssa Milano and more than 100 U.S. colleges and universities. Our other owned brands include Bass, G.H. Bass, G-III Sports by Carl Banks, Eliza J, Black Rivet, Jessica Howard and Winlit. G-III also operates retail stores under the Wilsons Leather, Bass, G.H. Bass & Co., Vilebrequin, Calvin Klein Performance and Andrew Marc names.
