Q2 FY2027
Filed Sep 2, 2026G-III Apparel Group, Ltd. reports second quarter fiscal 2027 results and raises earnings guidance
Second-quarter GAAP and non-GAAP diluted earnings per share exceeded the Company’s guidance, while net sales declined 10%. Gross margin expanded 440 basis points, go-forward portfolio sales rose at a high-single digit rate, and the Company raised fiscal 2027 GAAP and non-GAAP earnings guidance excluding Marc Jacobs.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended July 31, 2026GAAP | $554.1 million | – | decreased 10% |
| Gross profit, three months ended July 31, 2026GAAP | $ 250,381 (In thousands) | – | – |
| Gross margin, three months ended July 31, 2026GAAP | 45.2 % | – | increased 440 basis points |
| Non-GAAP gross profit, three months ended July 31, 2026non-GAAP | $ 250,259 (In thousands) | – | – |
| Non-GAAP gross profit percentage, three months ended July 31, 2026non-GAAP | 45.2 % | – | – |
| Selling, general and administrative expenses, three months ended July 31, 2026GAAP | $ 231,354 (In thousands) | – | – |
| Depreciation and amortization, three months ended July 31, 2026GAAP | $ 8,195 (In thousands) | – | – |
| Operating profit, three months ended July 31, 2026GAAP | $ 10,832 (In thousands) | – | – |
| Income tax expense (benefit), three months ended July 31, 2026GAAP | $ (6,123) (In thousands) | – | – |
| Net income, three months ended July 31, 2026GAAP | $20.2 million | – | – |
| Diluted net income per common share, three months ended July 31, 2026GAAP | $0.46 per diluted share | – | – |
| Non-GAAP net income, three months ended July 31, 2026non-GAAP | $ 11,493 (In thousands) | – | – |
| Non-GAAP diluted net income per common share, three months ended July 31, 2026non-GAAP | $0.26 per diluted share | – | – |
| Adjusted EBITDA, three months ended July 31, 2026non-GAAP | $ 20,229 (In thousands) | – | – |
| Net sales, six months ended July 31, 2026GAAP | $ 1,090,055 (In thousands) | – | – |
| Gross profit, six months ended July 31, 2026GAAP | $ 598,127 (In thousands) | – | – |
| Gross margin, six months ended July 31, 2026GAAP | 54.9 % | – | – |
| Non-GAAP gross profit, six months ended July 31, 2026non-GAAP | $ 495,324 (In thousands) | – | – |
| Non-GAAP gross profit percentage, six months ended July 31, 2026non-GAAP | 45.4 % | – | – |
| Selling, general and administrative expenses, six months ended July 31, 2026GAAP | $ 486,677 (In thousands) | – | – |
| Operating profit, six months ended July 31, 2026GAAP | $ 96,067 (In thousands) | – | – |
| Net income, six months ended July 31, 2026GAAP | $ 86,747 (In thousands) | – | – |
| Diluted net income per common share, six months ended July 31, 2026GAAP | $ 1.95 | – | – |
| Non-GAAP net income, six months ended July 31, 2026non-GAAP | $ 2,753 (In thousands) | – | – |
| Non-GAAP diluted net income per common share, six months ended July 31, 2026non-GAAP | $ 0.06 | – | – |
Fiscal 2027 and third quarter fiscal 2027 outlook
- Revenueapproximately $2.71 billion for fiscal 2027; approximately $870.0 million for the third quarter of fiscal 2027
- Tax rateapproximately 25.2% for GAAP purposes and 32.2% for non-GAAP purposes
- NoteFiscal 2027 GAAP net income is expected to be between $181.0 million and $185.0 million, or diluted earnings per share between $4.10 and $4.20.
- NoteFiscal 2027 non-GAAP net income is expected to be between $97.0 million and $101.0 million, or diluted earnings per share between $2.20 and $2.30.
- NoteFiscal 2027 adjusted EBITDA is expected to be between $174.0 million and $178.0 million.
- NoteFiscal 2027 net interest income is expected to be approximately $8.0 million for GAAP purposes and $5.0 million for non-GAAP purposes.
- NoteThird-quarter fiscal 2027 GAAP net income is expected to be between $59.0 million and $64.0 million, or diluted earnings per share between $1.35 and $1.45.
- NoteThird-quarter fiscal 2027 non-GAAP net income is expected to be between $59.0 million and $64.0 million, or diluted earnings per share between $1.35 and $1.45.
- NoteThe outlook assumes that tariffs for the remainder of the year will approximate current rates.
- NoteThe outlook does not include any impact related to the Marc Jacobs acquisition.
- NoteThe Company believes the acquisition will be slightly dilutive in fiscal 2027.
Capital returns
- Capital return to shareholders of $12.2 million consisting of $7.9 million of share repurchases and $4.3 million in dividend payments.
What drove it
- Gross-margin improvement reflected price increases and the continued mix shift toward higher-margin owned brands.
- Go-forward portfolio sales grew at a high-single digit rate during the quarter.
- The Company completed the Marc Jacobs acquisition and targets $1 Billion in long-term annual revenue.
- Fiscal 2027 net-sales guidance incorporates the loss of approximately $460 million of sales from Calvin Klein and Tommy Hilfiger products.
- The six-month GAAP results included a benefit recognized in connection with recovery of previously incurred tariffs imposed under the IEEPA on inventory sold in the prior year.
Concerns
- Second-quarter net sales decreased 10% to $554.1 million compared to $613.3 million in the prior year's quarter.
- Third-quarter fiscal 2027 net-sales guidance of approximately $870.0 million compares to $988.6 million in last year's third quarter.
- Fiscal 2027 net-sales guidance of approximately $2.71 billion compares to net sales of $2.96 billion for fiscal 2026.
- Fiscal 2027 non-GAAP net income guidance of between $97.0 million and $101.0 million compares to non-GAAP net income of $116.2 million for fiscal 2026.
- Fiscal 2027 adjusted EBITDA guidance of between $174.0 million and $178.0 million compares to adjusted EBITDA of $192.4 million in fiscal 2026.
- The Marc Jacobs acquisition is expected to be dilutive during the first 12 months after closing, with accretion expected thereafter.
What to watch
- The Company expects to provide more specific guidance related to Marc Jacobs when it reports third-quarter earnings.
- Performance of the go-forward portfolio following the loss of Calvin Klein and Tommy Hilfiger product sales.
- Whether tariffs for the remainder of the year approximate current rates, as assumed in the outlook.
- Delivery of the Marc Jacobs long-term annual revenue target of $1 Billion.
Balance sheet and cash flow
- Cash and cash equivalents were $529.2 million compared to $301.8 million last year.
- Inventories decreased 13% to $555.0 million this year compared to $639.8 million last year.
- Working capital was 984,231 (in thousands) as of July 31, 2026, compared to 812,675 (in thousands) as of July 31, 2025.
- Total assets were 2,751,847 (in thousands) as of July 31, 2026, compared to 2,690,981 (in thousands) as of July 31, 2025.
- Total debt was 7,835 (in thousands) as of July 31, 2026, compared to 15,481 (in thousands) as of July 31, 2025.
- Operating lease liabilities were 333,004 (in thousands) as of July 31, 2026, compared to 280,295 (in thousands) as of July 31, 2025.
- Total stockholders' equity was 1,819,114 (in thousands) as of July 31, 2026, compared to 1,708,521 (in thousands) as of July 31, 2025.
Analysis
G-III reported a mixed second quarter. Net sales decreased 10% to $554.1 million from $613.3 million, but the Company said its go-forward portfolio grew at a high-single digit rate. The overall sales decline sits alongside the Company’s stated transition away from Calvin Klein and Tommy Hilfiger products, with fiscal 2027 guidance incorporating the loss of approximately $460 million of sales from those products.
Margin was the key operating offset. GAAP gross margin increased 440 basis points to 45.2% from 40.8%, which the Company attributed to price increases and a mix shift toward higher-margin owned brands. GAAP gross profit was $250,381 (In thousands), compared with $250,471 (In thousands), while selling, general and administrative expenses were $231,354 (In thousands), compared with $226,845 (In thousands), and operating profit was $10,832 (In thousands), compared with $16,300 (In thousands).
GAAP net income was $20.2 million, or $0.46 per diluted share, versus $10.9 million, or $0.25 per diluted share. Non-GAAP net income per diluted share was $0.26 compared with $0.25. The reconciliation identifies a $4,032 (In thousands) expense related to the Marc Jacobs acquisition and a $9,334 (In thousands) tax benefit from release of a valuation allowance among the items affecting GAAP and non-GAAP results. For the six months ended July 31, GAAP net income was $86,747 (In thousands), while non-GAAP net income was $2,753 (In thousands), reflecting in part the IEEPA tariff-refund items in the reconciliation.
The balance sheet showed $529.2 million of cash and cash equivalents and total debt of 7,835 (in thousands) at July 31, 2026. Inventories decreased 13% to $555.0 million, and the Company returned $12.2 million to shareholders through $7.9 million of share repurchases and $4.3 million in dividend payments. The Company also completed the Marc Jacobs acquisition, expects it to be slightly dilutive in fiscal 2027, and stated that the transaction is expected to be dilutive during the first 12 months after closing before accretion thereafter.
Management raised fiscal 2027 GAAP and non-GAAP earnings guidance, excluding Marc Jacobs, and guided fiscal 2027 net sales to approximately $2.71 billion, GAAP diluted earnings per share to $4.10 to $4.20, and non-GAAP diluted earnings per share to $2.20 to $2.30. The outlook assumes tariffs approximate current rates and excludes Marc Jacobs. Third-quarter guidance calls for approximately $870.0 million of net sales and GAAP and non-GAAP diluted earnings per share of $1.35 to $1.45, compared with $988.6 million of net sales, $1.84 of GAAP diluted earnings per share, and $1.90 of non-GAAP diluted earnings per share in last year's third quarter.
Management, verbatim
Our second quarter results reflect strong execution across the organization, with earnings exceeding our guidance, driven by substantial gross margin expansion. Our go-forward portfolio grew at a high-single digit rate during the quarter, reinforcing our confidence in the power of our brands and business model.
Morris Goldfarb, Chairman and Chief Executive Officer
Our strategic transformation has taken a meaningful step forward with the addition of Marc Jacobs. The acquisition significantly strengthens our portfolio and further enhances our position as a global fashion leader.
Morris Goldfarb, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported second-quarter and six-month metrics
- Operating cash flow
- Free cash flow
- Capital expenditures
- Segment revenue, segment profit, and segment-level comparisons
- Prior fiscal 2027 guidance figures for comparison with reported results or updated guidance
- Fiscal 2027 gross-margin guidance
- Fiscal 2027 operating-expense guidance
- Third-quarter fiscal 2027 gross-margin guidance
- Third-quarter fiscal 2027 operating-expense guidance
- Third-quarter fiscal 2027 tax-rate guidance
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.