Donna Karan owner G-III Apparel cuts Q4 and 2017 guidance after holiday season
G-III Apparel Group on Thursday announced an update to its fourth quarter and fiscal year 2017 guidance including net sales and net income.
Following the season, G-III now expects its retail segment to be less than anticipated due to unseasonably warm weather in the first part of the quarter and an overall challenging retail environment. Unseasonably warm weather and poor traffic has been a theme for this holiday season. American Eagle updated its financial outlook this week following what CEO Jay Schottenstein described as a “choppy and highly promotional” holiday season.
G-III also expects its retail operations net sales to decrease $20 million and net income to decrease $10 million in the fourth quarter. The company previously expected the Wilsons and Bass retail chains to increase in the low single digits, but it now anticipates sales to be down low-double digits for Wilsons and down mid-single digits for G.H. Bass. Gross margin will also be impacted by planned promotional activity in the retail operations segment. G-III did not adjust its wholesale operations segment expectations.
The company reduced its full year guidance and now expects net sales to be $2.41 billion instead of $2.43 billion and projects net income to range from $57 million to $62 million versus $67 million to $72 million from its previous forecast. The full year forecast includes losses and expenses related to the acquisition of Donna Karan International, Inc. this year.
In addition, G-III Apparel is now projecting that its adjusted EBITDA will range between $148 million and $155 million as opposed to $163 million to $171 million from the previous forecast. The company reported adjusted EBITDA of $210.1 million in fiscal 2016.
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