Net income for the three month period ended Jan. 31 was $0.17 per diluted share, compared to $0.48 in the year-ago period and well below the estimated $0.42. Or $7.9 million, down from $22.2 million.
G-III said in a statement that strong sales in many of its wholesale businesses as well as G.H. Bass & Co. retail stores were offset by slower activity and hefty promotion costs with respect to outerwear in its wholesale and Wilsons Leather divisions.
So, while net sales increased from $514.3 million to $527.4 million in the fourth quarter, the cost of sales also increased from $330.8 million to $348.6 million.
According to G-III, weak outerwear sales in the key winter selling months were the primary reason its revenue and earnings for the full year were lower than previously forecasted, too, coming in at $2.34 billion and $2.46 per diluted share. The company had been guiding revenue of roughly $2.4 billion and per-share earnings of between $2.78 and $2.88.
“Fiscal 2016 was a very strong year for us, although we were disappointed by our wholesale and retail outerwear business, which was heavily impacted by the warmest winter ever recorded,” Morris Goldfarb, G-III’s chairman, CEO and president, stated. “That said, we had excellent performances from our non-outerwear Calvin Klein businesses, as well as our dress and team sports businesses.”
Goldfarb also highlighted the company’s recently expanded relationship with the Tommy Hilfiger brand and its increased financial investment and partnership with the Karl Lagerfeld label.
“We will be making significant investments in these brands going forward,” he added. “Our organization is energized by the opportunities in front of us and excited to take advantage of our opportunities in fiscal 2017.”
Looking ahead, G-III is forecasting net sales of around $2.56 billion for the year ending Jan. 31 and net income of $120 million to $125 million, or between $2.55 and $2.65 per diluted share.
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