G-III Apparel Slashes Annual Outlook As CEO Flags Tariffs And Retail Weakness

G-III Apparel Group (NASDAQ:GIII) saw its shares decline on Thursday after the company revised its full-year outlook, citing weaker earnings and sales despite surpassing second-quarter profit and revenue estimates.

In the second quarter, G-III reported adjusted earnings per share of 25 cents, which exceeded analysts’ expectations of 9 cents. The company also posted quarterly sales of $613.266 million, a 5% decrease from the previous year but still higher than the Street’s forecast of $571.312 million.

However, gross profit for the quarter dropped to $250.471 million, down from $275.874 million a year ago. Operating profit also decreased to $16.30 million from $41.464 million in the same period last year. Adjusted EBITDA saw a decline to $23.268 million, compared to $43.315 million in the previous year.

G-III ended the quarter with $301.778 million in cash and equivalents, while inventories increased by 5% to $639.8 million compared to $610.5 million in the previous year. The company’s total debt decreased significantly to $15.5 million from $414.0 million in the prior year.

Looking ahead to fiscal 2026, G-III Apparel Group expects challenges from the macro environment, cautious retailer sentiment, and tariff headwinds to impact its performance. The company anticipates incremental tariff costs of $155 million, with efforts to mitigate the impact reducing it to approximately $75 million, primarily in the second half of the year.

As a result of these factors, G-III revised its fiscal 2026 adjusted EPS outlook to $2.55–$2.75, down from the previous range of $4.15–$4.25 and below the $2.90 estimate. The company also lowered its sales forecast for the fiscal year to $3.02 billion from $3.14 billion, slightly below the Street’s consensus of $3.131 billion.

For the third quarter, G-III Apparel Group projected adjusted EPS in the range of $1.43–$1.63, missing the $1.88 analyst estimate. Sales for the quarter are expected to reach $1.01 billion, below the $1.10 billion consensus.

Morris Goldfarb, G-III’s Chairman and CEO, acknowledged the challenges ahead and highlighted the company’s efforts to mitigate tariff pressures through vendor participation, selective sourcing shifts, and targeted price increases. He expressed confidence in G-III’s ability to navigate the current environment and drive long-term growth and shareholder value.

In conclusion, despite the revised outlook and challenges faced by G-III Apparel Group, the company remains focused on strategic opportunities and leveraging its strong balance sheet to overcome obstacles and drive future success.