G-III Cuts Earnings View Amid Surprise Loss

G-III Apparel Group Ltd. swung to a surprise loss in the latest quarter as sales unexpectedly fell, and the company cut its earnings forecast for the year amid retail softness at outlet centers.

Shares fell 14% to $36 in premarket trading.

The producer of apparel and products under labels such as Calvin Klein, Kenneth Cole and Tommy Hilfiger now sees full year per-share earnings in a range of $2.20 to $2.30. It previously expected a range between $2.55 and $2.65 a share.

New York City-based G-III said poor performance in outerwear offset strengths in other parts of the business during the quarter. However, Chief Executive Morris Goldfarb said there is opportunity for better wholesale outerwear performance in the second half of the year, given forecasted cool weather trends.

The results from the appeal maker come as retailers throughout the country, from department stores and specialty shops, have reported sliding sales mostly because of dwindling traffic, as shoppers increasingly turn to online shopping and fast-fashion.

In July, LVMH Moë t Hennessy Louis Vuitton SE said it agreed to sell Donna Karan International Inc. to G-III for $650 million, including debt. The Donna Karan and DKNY lines delivered lackluster growth for years amid stiff competition, but G-III has said the acquisition would increase the scale and diversification of its portfolio.

Over all for the July period, G-III posted a loss of $1.3 million, or 3 cents a share, compared a profit of $12.5 million, or 27 cents a share, a year ago. The company said its results included fees in connection with the ongoing Donna Karan acquisition, which dented profited by about 4 cents a share. The company guided for per-share profit between 15 cents and 19 cents.

Revenue fell 7% to $442.3 million. The company expected sales to grow to $485 million.

For the current third period that ends in October, the company said it expects to earn between $1.50 and $1.60 a share on sales of about $940 million. Analysts expected per-share profit of $2.02 on $1 billion in revenue, according to Thomson Reuters.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

August 30, 2016 08:45 ET (12:45 GMT)

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