G-III Apparel Q4 Profit Tops View, But Sales Miss; Provides Weak Outlook

(RTTNews) - Apparel maker G-III Apparel Group Ltd. (GIII) reported Tuesday a profit for the fourth quarter that surged 62 percent from last year, reflecting strong double-digit revenue growth. Earnings per share topped analysts' expectations, while quarterly net sales missed their estimates. The company also provided earnings guidance for the first quarter and full-year 2015, both below Street view.

"We continued to grow at a fast pace, executed our strategic plan for Vilebrequin, acquired G.H. Bass & Co. and produced both strong sales growth and increased profitability. We are pleased to have performed well throughout the year and finished up fiscal 2014 with record breaking results for sales and earnings," Chairman, President and CEO Morris Goldfarb said in a statement.

The New York-based maker of Andrew Marc, Marc New York, Jessica Howard brands, reported net income of $13.06 million or $0.62 per share for the fourth quarter, higher than $8.07 million or $0.40 per share in the prior-year quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 26 percent to a record of $472.76 million from $375.28 million in the same quarter last year, but missed eight Wall Street analysts' consensus estimate of $489.93 million.

The company noted that sales growth was driven by broad strength across categories and tiers of distribution, as well as by the recently acquired G.H. Bass & Co. business, which was completed on November 4.

Operating profit for the quarter grew to $22.19 million from $16.07 million in the year-ago quarter, and gross profit totaled $166.52 million, up from $117.90 million in the prior-year quarter.

Meanwhile, selling, general and administrative expenses also increased to $140.18 million from $98.89 million last year.

Looking ahead to the first quarter, the company expects earnings in a range of $0.10 to $0.20 per share, on projected net sales of about $346.0 million, while analysts anticipate earnings of $0.04 per share, on quarterly sales of $345.63 million. First-quarter results will be negatively impacted by the G. H. Bass & Co. acquisition.

For fiscal 2015, G-III Apparel currently expects earnings in a range of $3.95 and $4.10 per share, on anticipated net sales of about $2.05 billion. Street is currently looking for full-year 2015 earnings of $4.30 per share, on annual sales of $2.10 billion.

"We continue to create a variety of significant growth opportunities as we build our operating platforms. We believe that this systematic approach to growth and diversification, combined with cost discipline, positions us to continue our strategic expansion, organically and through acquisition, and drives excellent value to our shareholders," Goldfarb added.

GIII closed Monday's regular trading session at $74.46, down $1.47 on a volume of 0.28 million shares.