G-III Apparel (GIII) Q2 2027 Earnings Call Transcript

Wednesday, Sept. 2, 2026 at 8:30 a.m. ET

Chairman and Chief Executive Officer - Morris Goldfarb

Operator: Good day, and thank you for standing by. Welcome to the G-III Apparel Group Second Quarter Fiscal 2027 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Neal Nackman, CFO. Please go ahead.

Neal Nackman: Good morning, and thank you for joining us. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guaranteed, and actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results of operations or the financial condition of the company to differ are discussed in the documents filed by the company with the SEC. The company undertakes no duty to update any forward-looking statements.

In addition, during the call, we will refer to non-GAAP gross profit, non-GAAP net income and non-GAAP net income per share and adjusted EBITDA, which are all non-GAAP financial measures. We have provided reconciliations of these non-GAAP financial measures to GAAP measures in our press release, which is also available on our website. I will now turn the call over to our Chairman and Chief Executive Officer, Morris Goldfarb.

Morris Goldfarb: Thank you, Neal, and thank you, everyone, for joining us. We made good progress in the second quarter with earnings exceeding our guidance, driven by solid execution, significant gross margin expansion and disciplined expense management. We also reached an incredibly important milestone with the completion of the Marc Jacobs acquisition yesterday. We believe this is transformational for G-III and significantly enhances our portfolio of owned brands while accelerating our evolution into a brand-led global apparel powerhouse. Second quarter net sales were $554 million, slightly below our plan, driven in a large part by our European business, which was impacted by macro softness in the region. Calvin Klein and Tommy Hilfiger delivered lower results than planned as we exit these licenses.

Excluding Tommy and Calvin, our go-forward portfolio grew high single digits in the quarter. The quality of our sales is also improving. We remain focused on full price selling, disciplined inventory management and protecting the long-term positioning of our brands. For example, wholesale sales in full-price channels were up more than 20% for the go-forward portfolio in the second quarter. Gross margin was a particular highlight, expanding 440 basis points compared to last year. The improvement reflects the benefit of pricing actions, healthy full price selling and the continued mix toward -- mix shift toward our higher-margin owned brands. We also benefited from the cost savings initiatives we continue to implement across the business.