Apparel Maker for Ivanka Trump Slides After Forecast Miss

Updated on
  • Shares of G-III Apparel tumble as much as 14 percent
  • Retail is ‘increasingly disrupted’ by e-commerce, CEO says

Ivanka Trump

Photographer: Andrew Harrer/Bloomberg

G-III Apparel Group Ltd., a clothing manufacturer that works with brands such as Ivanka Trump and Donna Karan, fell the most since August after sluggish retail spending crimped its annual forecast.

Earnings will be 99 cents to $1.09 a share this fiscal year, excluding some items, the company said Monday. That fell far short of the $1.34 average of projections. G-III’s sales forecast also missed estimates for the period, which ends next January.

Like many U.S. apparel makers and retailers, G-III has faced sluggish mall traffic and a consumer shopping shift to the internet. The company also is digesting last year’s $650 million acquisition of the Donna Karan and DKNY brands from LVMH. It said at the time that it expected the purchase to weigh on profit this fiscal year, before adding to earnings later.

G-III confronted “significant headwinds as the traditional retail environment has become increasingly disrupted as a result of evolving consumer buying behavior and continued penetration of e-commerce,” Chief Executive Officer Morris Goldfarb said in a statement.

Shares of G-III fell as much as 14 percent in New York to $19.71, the biggest intraday slide since Aug. 30. They had lost 22 percent this year through the end of last week.

G-III said sales will reach $2.73 billion for the current fiscal year, short of the $2.9 billion estimate.

Fourth Quarter

In the fourth quarter, which ended Jan. 31, the company posted a loss of 16 cents a share. Analysts had predicted a 10-cent loss. Sales rose 14 percent to $603.3 million, though that missed the average estimate of $622.9 million.

G-III gets about 80 percent of sales from its wholesale business. It also operates retail stores under brands including Wilsons Leather, Bass and Calvin Klein Performance.

“While our near-term financial outlook reflects the dilutive impact of our recent acquisition of Donna Karan, we believe the mid-year relaunch of the DKNY and Donna Karan brands will have a positive impact in the second half of the year,” Goldfarb said.

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