G-III’s (GIII) $1.2B Bet On Life After Calvin Klein

On September 2, G-III Apparel (NASDAQ: GIII ) reported second-quarter fiscal 2027 results one day after closing its acquisition of Marc Jacobs on September 1, a deal timed to land just as the company's longtime licenses for Calvin Klein and Tommy Hilfiger finish winding down. Net sales fell 10% to $554.1 million from $613.3 million, in line with what management had already signaled as it exits the two PVH-owned brands. But gross margin jumped 440 basis points to 45.2%, and non-GAAP earnings of $0.26 per share beat the top of guidance.

The clearest sign that G-III's shift toward owned brands is working shows up in the margin line. Gross margin rose to 45.2% from 40.8%, driven by pricing actions, more full-price selling, and a mix shift away from licensed labels. Full-price wholesale sales for the go-forward portfolio, everything outside Calvin Klein and Tommy Hilfiger, climbed more than 20% in the quarter, and that portfolio is growing high single digits on its own. Of the $1.2 billion in revenue G-III expects to lose from the PVH exits by year-end, management says $700 million has already been replaced, at a higher margin than what it's replacing.

Donna Karan is doing much of that work. Sales rose more than 45% in the quarter, and the brand is preparing a global Fall 2026 campaign fronted by Kendall Jenner to reach younger shoppers. DKNY's digital sales grew mid-20%, while its stores posted mid-single-digit comparable sales growth. Marc Jacobs adds another lever. G-III now owns 100% of the operating business and half of a licensing joint venture with WHP Global, and it's projecting $360 million in Marc Jacobs sales for the rest of this fiscal year, with a long-term target of $1 billion as it pushes into ready-to-wear, a category the brand has barely touched, since handbags and accessories still make up about 90% of its revenue. Cash grew to $529.2 million from $301.8 million after G-III collected $134 million in tariff refunds and interest during the quarter.

The other side of that trade is a shrinking top line. Full fiscal 2027 net sales guidance stands at $2.71 billion, down about 8%, built around a $460 million hit from the exiting licenses that only partially gets offset by go-forward growth. The third quarter is where that hit lands hardest. G-III guided to net sales of about $870 million, down from $989 million a year earlier, and non-GAAP earnings of $1.35 to $1.45 per share, down sharply from $1.90 in the same quarter last year. Full-year adjusted EBITDA guidance of $174 million to $178 million also sits below last year's $192.4 million.