G-III Apparel Group, Ltd. Q2 FY2026 earnings call

• In Q2, exceeded net sales and earnings expectations. Gross margins impacted by higher tariffs; mitigating via vendor participation, sourcing shifts, price increases. - Strategic priorities: Maximize owned brands (DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin), streamline go-to-market with tech/infrastructure investments, North America warehouse consolidation, brand expansions (Donna Karan weekend collection, Karl Lagerfeld global campaigns, DKNY collaborations, Vilebrequin beach clubs). - Licensed brands: Team Sports expanding offerings, Nautica, Halston, Champion, Converse, BCBG delivering solid results.

Wholesale segment net sales were $590 million in the second quarter, compared to $620 million in the previous year. Retail segment net sales were $41 million, up from $37 million in the previous year. Gross margin percentage for Wholesale was 38.9% in Q2 2026, down from 41.2% in the prior year's Q2. Retail segment gross margin was 52.4%, down from 54.4% in the prior year. Non-GAAP net income for the quarter was $11 million, or $0.25 per diluted share, compared to $24 million, or $0.52 per diluted share, in the previous year.

• Fiscal 2026 net sales expected ~$3.02 billion, down ~5% Y/Y. - Non-GAAP diluted EPS between $2.55 and $2.75. - Adjusted EBITDA between $198 million and $208 million. - Tariff impact unmitigated ~$75M in H2. - Owned brands expected mid-single digit growth. - Warehouse optimization and tech investments planned. - Interest expense ~$5M, cap ex ~$40M, tax rate ~30%.

• Tariffs impacting gross margins and topline. - Retailers cautious on inventory buys, especially for Calvin Klein and Tommy Hilfiger. - Exit from PVH licenses affecting sales. - Transition challenges with production and softness in footwear demand.

Q: On gross margin and promotionality, how balanced are price increases with consumer signals?

A: Target appropriate areas for price increases; consumer resilient, back-to-school good. Tariffs influence inventory and exit of PVH assets; margin improvement expected with owned brands growth.

Q: Detail on sales update, deceleration vs previous growth?

A: Deceleration due to PVH brand transition, tariff pressures, and softness in footwear. Mid-single digit growth expected for owned brands this year.

Q: Tariff impact in Q2 and lap in Q2 next year?

A: Tariff impact in Q2 was half tariffs and half product mix; Q2 next year may lap headwind as tariffs are anticipated earlier.

Q: Product from India and impact on orders from Calvin and Tommy?

A: Product from India historically low single-digit percentage; $30M sales impact this year; reduction in open to buys affects all brands.

Q: Performance of own brands and potential license opportunities?

A: Own brands retail well, expanding door counts and classifications. Licenses like Converse and BCBG show promise, with Converse having global distribution and BCBG performing well in contemporary assortments