G-III Apparel Group, Ltd. Q3 FY2026 earnings call

• Delivered strong profitability in Q3 despite tariffs, with earnings exceeding guidance range. Driven by strength of go-forward portfolio, owned brands, full-price sales, and tariff mitigation. • Since PVH ended licensing partnership, transformed business model and replaced over 70% of lost sales volume through organic growth. • Brand highlights: Donna Karan had double-digit sales increases in NA, expected 40% growth in FY2026; Karl Lagerfeld had strong quarter with global campaign success; DKNY had healthy full-price sell-throughs; Vilebrequin strengthened global presence. • Omnichannel capabilities: Robust digital performance, DTC business on track to be close to breakeven in FY2026, improved retail footprint productivity. • Licensed brands: Licensed team sports, Converse apparel, Levi's, Nautica Jeans, etc., performing well; wind down of PVH licenses managed with disciplined inventory and full-price selling.

Wholesale segment: Net sales for the third quarter were $977 million compared to $1.07 billion in the prior year. Gross margin was 36.7% compared to 38.4% in the prior year's comparable quarter. Retail segment: Net sales were $46 million for the quarter compared to $42 million in the prior year despite operating fewer stores. Gross margin was 50.8%, down from 52.3% in the prior year, primarily due to the liquidation of G.H. Bass branded product transitioning to a license arrangement.

• Fiscal 2026 net sales expected to be approximately $2.98 billion, a 6% decrease from last year. • Key owned brands expected to grow mid-single digits. • Gross impact of tariffs estimated at ~$135 million, unmitigated impact ~$65 million for FY2026. • Non-GAAP net income expected between $125 million and $130 million, or diluted earnings per share between $2.80 and $2.90. • Adjusted EBITDA expected between $208 million and $213 million.

• Impact of tariffs on gross margins. • PVH license wind down challenges and residual drag on top line. • Retail softness in some regions affecting performance. • Uncertainties in global consumer environment impacting sales and margins.

Q: Can you unpack gross margin performance and thoughts on mitigating tariffs next year?

A: Neal Nackman explained gross margin was better than expected due to full-price selling, with tariff impact of ~$65 million for FY2026. Morris Goldfarb stated prices raised to meet consumer expectations, own brands more productive, and direct-to-consumer and bricks models showing opportunities for margin enhancements.

Q: How does the reshaping of the mix due to PVH license decline affect next year?

A: Morris Goldfarb said PVH's underperformance in fashion lanes creates opportunities for own brands. The PVH license business is expected to be $400 million next year, and margins are expected to improve.

Q: Thoughts on owned brands like Donna Karan and priority levers to keep momentum?

A: Morris Goldfarb mentioned Donna Karan has over 20% repeat customers, strong dress and coat sales, and expanding distribution in premium department stores. Priority levers include product improvement, distribution expansion, and consumer engagement.

Q: Detail on other parts of business like Nautica, Nike, BCBG?

A: Morris Goldfarb said Nautica is growing nicely, Halston and BCBG are performing, Converse apparel is doing well, and there are other scalable license opportunities. Private label initiative is also being worked on.

Q: Gross margin expectations for spring 2026 and beyond?

A: Neal Nackman stated tariff impact was most in Q4, expecting pickups in spring 2026 as tariffs impact reverses.

Q: Wholesale order trends and additive catalysts for 2026?

A: Morris Goldfarb said order trends were strong, especially in full-price channels. Additive catalysts include extended sizing, new collections like Donna Karan Weekend, and growth in own retail and international expansion for brands like Donna Karan and Karl Lagerfeld