G-III beats profit, misses sales, buys Marc Jacobs, raises guidance
Q2 profit beat but sales miss G-III earned more per share than expected and gross margin jumped to 45.2%, but revenue of $554 million fell short of the $570 million consensus, and the stock dropped 11.5%. The sales decline came from losing the Calvin Klein and Tommy Hilfiger licenses.
This is the core quarterly result that set off the period's sharp share-price drop and frames the whole period.
Marc Jacobs acquisition completed G-III closed its roughly $925 million purchase of Marc Jacobs from LVMH. Management sees a path to $1 billion in annual sales, with handbags, small leather goods and accessories leading, and expects the brand to add to profit after this fiscal year.
The deal is the biggest strategic change of the period and the main reason investors see future growth beyond lost licenses.
Donna Karan brand surges Donna Karan sales rose more than 45% from a year earlier, helped by strong online traffic, higher conversion, a standout dress business, double-digit handbag growth, and more footwear doors at Nordstrom, Macy's and Dillard's. This shows G-III's own brands can replace lost licensed labels.
It is the clearest evidence that G-III's remaining brands are growing fast enough to offset the license losses.
Full-year profit guidance raised G-III lifted its fiscal 2027 adjusted earnings guidance to $2.20-$2.30 per share while keeping sales near $2.71 billion. The raised profit outlook, plus about $530 million in cash and $1 billion in available liquidity, supports the stock despite weak revenue.
Guidance is what investors use to value the company, and the raise is the period's main positive counterweight to the sales miss.