G-III Apparel Group, Ltd. reported net sales for the third quarter ended October 31, 2024 increased 1.8 percent to $1.09 billion compared to $1.07 billion in the prior-year Q3 period.
Income Statement Summary
Net income for the quarter was $114.8 million, or $2.55 per diluted share, compared to $127.6 million, or $2.74 per diluted share, in the prior year's third quarter.
Non-GAAP net income per diluted share was $2.59 for the third quarter ended October 31, 2024 compared to $2.78 in the Q3 period last year.
Non-GAAP net income per diluted share excludes (i) in the third quarter of fiscal 2025, a $1.6 million write-off of deferred financing costs related to the redemption of senior secured notes, (ii) in the third quarter of fiscal 2025, $0.5 million in one-time severance expenses related to a closed warehouse, (iii) in the third quarter of fiscal 2024, incentive compensation expenses of $1.8 million related to the Karl Lagerfeld transaction, (iv) in the third quarter of fiscal 2024, non-cash imputed interest expense of $0.7 million related to the note issued to seller as part of the consideration for the acquisition of Donna Karan International and (v) in the third quarter of fiscal 2024, asset impairments of $0.2 million. The aggregate effect of these exclusions was equal to 4 cents per diluted share in the third quarter of this year and 4 cents per diluted share in last year's third quarter.
Balance Sheet Summary
Total debt decreased 52 percent to $224.2 million at the end of this year's third quarter compared to $461.9 million at the end of third quarter of last year. In August 2024, a $400.7 million payment was made to voluntarily redeem the entire $400 million principal amount of the notes at a redemption price equal to 100 percent of the principal amount of the notes plus accrued and unpaid interest. The payment was made with cash on hand and borrowings from the revolving credit facility.
Inventories decreased 10 percent to $532.5 million at quarter-end, compared to $591.5 million at third quarter-end last year.
Outlook
The company updated its outlook for the fiscal year ending January 31, 2025. This outlook anticipates the current macroeconomic and consumer environment, as well as the unseasonable weather. The outlook further includes approximately $55.0 million (prior approximately $60.0 million) in incremental expenses, primarily associated with the launches of Donna Karan, Nautica and Halston. Approximately 60 percent of these expenses are related to marketing initiatives to support the Donna Karan and DKNY brands. The remaining costs are principally related to talent and technology to expand operational capabilities.