GIII - Earnings call transcript Q3 2020 | G-III Apparel Group, Ltd.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello! And welcome to the G-III Apparel Group, Third Quarter Fiscal 2020 Earnings Conference Call. My name is Cheryl and I will be your operator for today's call. At this time all participants are in a listen only mode. Later we will conduct a question-and-answer session. [Operator Instructions]. conference being this that note call recorded. is Please

call the may company’s will now Neal to the turn you I CFO, over Nackman. begin. Sir,

Neal Nackman

Good for you. and us. Thank morning joining thanks

certain like the in session of may statements remind would the call looking Q&A I forward the begin, on today's we participants Before that within statements constitute federal made and laws. to meaning securities

expressed actual or not are differ may statements results guarantees and in implied from Forward-looking forward-looking statements. those materially

or the could the to company that Important the update cause statements. to the in of operation any SEC. duty condition actual company financial factors differ the results of documents company The discussed are no forward-looking filed undertakes by with

per non-GAAP during which we In the share measures. non-GAAP financial will to call net adjusted are to EBITDA, net all addition, refer and income income, non-GAAP

We these have to on in our financial also release, GAAP our measures measures available provided which is of press website. non-GAAP reconciliations

the Officer, Chairman turn our call to now Goldfarb. will Morris I over Executive Chief and

Morris Goldfarb

joining morning Officer; Neal Aaron, Wayne Officer; Operating of Priya thank Chief Good Trivedi, President and and our Vice our Relations. Miller, Vice us. you Chief Executive Vice With Chairman Jeff Investor our Financial Nackman, are and President; Sammy today me Goldfarb, President for

good wholesale to in good continue maintained we geopolitical quarter past our This the growth business, in wholesale challenging We our momentum achieve quarter bottom-line we the as our exceeded notwithstanding business. environment. and retail plan for

gross Our better in planned. than margins came

support costs. our job product tariffs inventory good We a China. obtaining ahead did managing in vendor and from by merchants great benefited of Our receipts resources some accelerating

third-quarter the Here our are highlights results. of

$X.XX to X% up were sales net quarter Third billion.

increased X% wholesale net $X.XX to third sales billion. quarter Our

quarter. in year's income plan per of to $X.XX Our third-quarter third $X.XX at ahead in net share compared diluted came last non-GAAP

store brief Now, nearly Wilsons have let By our me as we three years locations year-end you retail compared will operations. ago. Bass just XXX or eliminated and a base of to update on XX% own with our provide

planning and as are to and on call, highlighted losses second possible. deeper remain we've as our on to However, store swiftly move closures efficiently quarter we retail as committed the and faster eliminating

diligently we report working updating resolution March. will advisors external at year-end and by we forward I that time results find progress and a believe solution, look with in you on We're landlords an our the with our appropriate landlords our have to our time. to

layouts November and improved positive the to our much month. In and the saw stores. we in from Lagerfeld product we’ve strong for sales both store and had new finish comp Friday assortments Karl implemented brands benefits November Both Black a DKNY experienced store

comp business in double-digit We're both e-commerce also the of brands. increase seeing

feel to improvements continue quarter We good and beginning year-to-date of about experienced through third comps since productivity Karl performance of quarter. with positive and we've the the positioning the fourth the DKNY Lagerfeld, and

tariffs. supply and We've and vendor I’d about like emphasized moment our proud talk developing we're relations. to to our chain real a always global of resourcing our of and way take strong

over XX% to XX% We will ago. the manufacturing fiscal end year estimate by four continue our these of production years and the of diversification from effective lean China-based our on to We be efficient relationships base. this approximately accelerate

We are the other in experienced of also world. to personnel reallocating our China some parts of

the for the implemented seeing accelerating of year, we're strategically previously inventory in fiscal tariffs of – receipts last September. I As in tariffs, as benefits stated of ahead round this last of

our from price continue participation level buys, future we concessions. As to some of vendors their to place of maintain negotiate we major support

seek raising diversification additional continuing tariff also prices. selectively our wholesale will We from sourcing mitigation as

last as with Klein strong another third sales wholesale quarter. Now our let growth year's business another us had business classifications. across XX% compared of which Calvin delivered is largest major net quarter, our good quarter which strength review to with approximately

apparel this incredible with market. in a women's dominant the we We've remain resource brand and an business built

Jeans very about Herald and with CK City. This their We're XX at product York store including Jeans of Square quarter shops CK flagship fourth the floor. shop New we shipped have pleased Macy's, at in out design installed the for first on one the placement our and

a you you in visit the have of City chance, encourage York I shop. New to those If

The is retailers. order to substantial potential reads Jeans $XXX the over good several book great million remain receiving years, sell-throughs business confident the the annual Jeans that of with the CJ we We reaching of also in for encouraging. with off reception women's a CK build a sales. very product from start Initial lifestyle next are can

on collection customer. Jeans we’ve Tommy be of will stores. specialty Hilfiger now housed business which quarterly Jeans line, the last select strong Tommy of stores. to part The younger trajectory a the that expanded Sportswear be sold on the the spring in focused launching Tommy We our approximately area up broad-based Our categories. to Jeans compared This also department line third continued to a was collection we Hilfiger will coming experienced Previously growth of now year. sales quarter separately look XX% growth with across third-quarter forward

We continue organically Tommy both Hilfiger to business through line product our extensions. grow and

business a helped Hilfiger relevant specialty and established of and stores. top our excellent brand The Calvin at expanded customer, growth assortment has for to management and the broad continue to of keep mind brands In the been Klein our global Macy's, and Dillard's, investments business. PVH the of and growing distribution to partner marketing addition fuel our Tommy by Nordstrom's and

further Net product due working distribution of sales down products Karl just business Donna the distribution taking in to category, Karl quarter Karl We're in place spring, Lagerfeld to the quarter were expand at third built to the We bedding our our we’ve this Paris and the of our the lifestyle appeal DKNY license brand. and doors long-term Karan Lagerfeld bath signed to door brand. Primarily & due CHF are whom the fewer partner year. compared a with the reduction with for build launch successful Lagerfeld Lord last to now of and Industries, to third to continuing the business Taylor.

of a well launched iconic Paris, two the positions ex-L'Oreal lifestyle brand Karl Lagerfeld also growth elegant Karl North makeup in Lagerfeld for beauty Karl elevated the between The brands collaboration market. it September status products. Parisian American limited edition featuring and This Lagerfeld

DKNY brands growth XX% Our Donna own sales Karan quarter solid to of quarter. compared year's registered and third last another

distribution additional the as are spring several launching at the brand expanding with footprint well This in increasing of our as with further categories we XXX-plus in doors Macy's Dillard's, doors.

edgy chic more are We an apparel consumers line, a and DKNY the also to to developing appeal with Jeans needs. casual urban, vibe

have So soft XXXX, launch with spring expected full launch for line a XXXX. for fall will a

partners through besides in growth our key sales the we're our our also in regions. front, distribution On Europe, expanding own business international globally

and is markets driving to brand brand development marketing in Continued global key these growth, critical recognition.

we and the DKNY the and launched marketing delivered DKNY, Anniversary joint Indonesia, visibility combined This media distributed We DKNY Russia, in channels. celebration of across East, guest venture. operated which featured is list Halsey. fall the the megastar currently XXXX with Southeast Star Asia elevated marketing In Middle China brand campaign, campaign global XXth brand Korea. its being Studded the and for Philippines, press many

digital marketing for complemented key a outdoor first saw multitude outlets. We DKNY continues Further, cities fall digital the traffic premium placements approach is approach and increase significant social across globe. of to in take with a This across the in a working the media campaign is season. media well. marketing

Our holiday campaign has already launched.

lifestyle successful our to another Karan to additional and licensing business a business the Donna wider a DKNY We've Licensing built and continue Karan is Donna add of and introduce profile. categories brands part important to consumer. DKNY

kids category footwear, We've apparel both built for internationally. a license through a and domestically and

Home, partners growing also the bedding CHF who our has bath We with and Canada. build robust distribution in and license will developed a the U.S.

Living Furniture reviews launched DKNY DKNY by our to line Additionally, this their Style quarter licensee Group retailers. great

we the believe achieve DKNY years Donna of year-to-date growth of fiscal growth order XX%. year brands wholesale management, can product DKNY the in Karan sales developments sales achieve distribution our we strength continue and Given remain well-positioned approximately DKNY With meaningful the growth to successful to and for and net brand. many that capabilities, book,

In recently business are terms today. deal deal to we new the structure The aligned the year our size new teams sports three NFL. signed with the has of a appropriately more that business,

continue to forward building with are business. We and partnership NFL growing and the team pleased sports our the overall to look

low-single-digit resort well, growth. status swimwear to sales our Lastly, continues registering and brand perform Vilebrequin comp

expand had. women's store the opened in men's to already a brand's Monaco compliment a to store We we continue as We footprint. the

We business the in Vilebrequin distribution partner. acquired Mexico also from our former

an points sale Now XX Mexico. operate of have and additional department stores in stores retail nine in

the balance had had a first positioned good are weather In pickup we We're sales, our sell-throughs the compared China a category quarter the well by of seeing in aided in reorders the quarter last to weather. for and good where have category we year. in stores, two colder is as just company-operated now key the fourth freestanding considering we Outerwear, the in which we handicap Shanghai. opened partner-operated store

and through Overall, sites well at our our retail on GIII our focused sales capturing we're share own. online partners keenly as growing as

work with significant for brands, are closely campaigns. conversions. teams the engine planning our teams aided These and and with very results marketing digital product partners marketing goal sales curate and results search the retail driving to our optimize assortments higher of also Our by of

I'll a fiscal and XXXX. our for discussion for now our guidance pass detailed it to Neal of results third-quarter

Neal Nackman

and Net of XX, and $X.XX $X.XX segment from same X% sales period billion from drivers to DKNY in were our for Morris. main approximately year. operations $X billion Net XXXX X% third Klein, wholesale quarter October brands increase. ended Hilfiger of sales Tommy the billion to Thank last $X.XX you, Calvin the increased increased the this billion

approximately operations comp were G.H. Wilsons Net for flat the and quarter DKNY. stores, same-store sales segment to year's of for million, a our compared reported X% million. XX% our We sales approximately $XX last decreases of for Bass of stores sales retail $XXX lower for XX% our

XX segment third us decrease Net by stores of to sales the our last quarter year. retail of approximately of affected by negatively also the operated were as compared operations

to XX.X% Our compared gross in as was the fiscal the quarter year's margin percentage XX.X% period. XXXX in of third prior

XX.X% was to year's compared The gross our compared million quarter. same in SG&A wholesale last XX.X% operation The in percentage in segment compared margin operation in fiscal the margin quarter expenses XX.X% to segment in in was XX.X% prior $XXX were the the quarter. last retail period year. our to million percentage year's $XXX gross

for the $X.XX per $X.XX year per results on quarter diluted Non-GAAP terminations. of diluted diluted a share fiscal last share compared $X.XX this quarter. of impact in to and was income million compared Non-GAAP to or a third per per the lease $XX or share the quarter imputed in interest this million income share Net $XX year's year. prior net for in quarter non-cash the exclude gain was $X.XX

million to of Inventory growth. sales balance relatively increased the the $XXX at third from to in million. $XXX XX% $XXX last our X% approximately million approximately year, quarter sheet; wholesale receivable Turning and up increased the with accounts end line to

from moderated have levels have the XX% these the align with expected, sales and As to quarter. increase normalized in growth second

We of $XXX quarter debt million at $XX a on year-to-date basis. of million capital had compared spent We at expenditures the million approximately the the to end $XXX on approximately of this long-term year. previous outstanding end

Our to ago. quarter $XX million year $XX this ending compared cash balance million year a was

ending are year As fiscal our for January for our we XX, XXXX. revising guidance, guidance

now to diluted net billion sales are fiscal $X.XX billion, We share and $XXX $X.X million of million sales $X.XX $X.XX between income share. forecasting and per of of between $X.XX of or per net income compares net net diluted million and or XXXX. $XXX approximately in $XXX This

million and non-cash $X net compared on year. $XXX diluted $XXX we and On million a non-GAAP or income terminations, income interest imputed per $X of million share an basis, non-GAAP the million of $X.XX of diluted lease excluding or share adjusted in $X.XX net to between previous per anticipating gain and $X.XX $XXX are between million expense

tariffs to in and our does clear previous changes. as all not future place tariffs, current current forecast be anticipate To and any includes

diluted Our a share approximately shares. weighted assumes million of XX guidance average count

fiscal We $XXX for in operation adjusted to of to We about prior the Non-GAAP be $XX anticipate both segment the assumes Bass year. $XXX flat XXXX retail loss planned are to Wilsons in million sales DKNY at between million in retail losses double-digit for now will approximately in XXXX fiscal million XXXX. fiscal low projecting $XXX compared and retail full-year our EBITDA comp This the declines the full-year. higher fiscal XXXX. than million were

DKNY’s As now revenue and Licensing grow Wholesale for planned operations, is XX%. approximately to by

quarter and and per $X.XX million $XX XXXX. income of fiscal we XXXX, of reported forecasting fiscal and net fourth $X.XX million $X.XX or to per net income of between XX, of approximately This $XXX compares $XX in diluted For net share. and our are share the sales million million sales $XXX $XX fourth diluted between quarter January or million ending net

$X.XX share and non-GAAP of $XX between we $XX diluted net million an $X.XX quarter. year's or per million of or income diluted per to are non-GAAP as $X.XX On in the net adjusted compared million basis $XX forecasting previous income between and share

I That closing remarks. call the will concludes for Morris comments. my back turn now to

Morris Goldfarb

that be XXth Thank commemorate as company. Exchange we next It's bell you, Stock listed Neal. NASDAQ closing will to week the believe Anniversary hard ringing our at a to the company's publicly

spans farther existence to a where back father Aaron our much Goldfarb created coat company. leather as GIII However, my XXXX, manufacturing

in you ability been expertise development to has As product partnership most we in fashion of know, have now that our expertise and power expand with globally recognized brands. the instrumental our categories

growth future global Tommy Parish. Karan, leveraging Lagerfeld power strategically Donna on DKNY, strength to our continues Karl Our Calvin be anchored brands; Hilfiger Klein, of the and

whose partners. retail and employees, like that our in these remains a choice and position have team helps elevate challenging thank succeed on also We times. our to world-class a grow supplier driving our of us our focused capabilities for dedication as I’d to continuing

shareholders Finally, in GIII want for myself holiday and of support. team, stakeholders us all trust I everybody other their I'd wish their like On to Thank and you. our a continued and happy season. behalf to thank the

now are some take to we questions. Operator, ready

Operator

Thank KeyBanc from Instructions] Capital. Yruma you. Our from Edward question comes [Operator first

is now line Your open.

Edward Yruma

first the X-B taking fourth Hey, in question. to of so the much. CK of as XXth, the rollout categories losses you kind include are and Thanks of and And question One are quarter. for long How that guess losses Obviously thanks momentum did nice and housekeeping the quick of larger kind on and what that the kind of then five-year what a three you do And would a will in question. expected adaption broader take picture were guys, Denim. do good then quarter look tariffs, some it think timeframe the morning what bigger in retail a the on Morris for business? the on the other in at? you housekeeping, see question. I the opportunities

Neal Nackman

items, to year's housekeeping the on the retail similar loss. Ed loss was so Yeah, the prior

the vendor our of categories Turning a previous - to expect retail to we were tariffs actually gain. to support our that a of adjusted guidance. GIII September respect adjusted all to the million first of year, captured that talked actually really to segment incur tariffs, year's primarily we net prior into We as those previous that result and fourth about effective the was loss rolled the the were $XX quarter in quarters impact, incorporated, opposed tariffs. a a had With as

Morris Goldfarb

as hit And being for in now it, on but category going of to response part very or has more that that than our that store jeans two to are response is couple the CK Denim, we've pleased for gotten, we're the good is improving, of strides Product the The there response a we were orders we’re work shipped. significant. been the last going to weeks quickly.

which in next stage We of believe the within have our I be early not four earlier years. want that commentary three stated of business distribution could possibly is all for far achieved shipping That number $XXX is the the away. to that we the we and million

excited when about You we should of that this successful clear retailer continuation we in back categories. and and not a got incredibly to this We the the we exactly on, clear this the that had them had category. recognize inventory of to that system, the inventory was was was took future or had the step a

women's had to better on a it the North the them. year it, where which or possibly peaked could out side to show follow-up, yet largest other be We we categories the extensions, classification relates don't of So doesn't categories have in as what of seem most in far on you, tiring. brands certainly have as you we one of signs side is maybe guess answer I – growth to distributed show the of one wholesale women's any of on is every one it the America,

stride we've business, in and Tommy we asset of to we've that and we care we're have behind scale an We signed XX% when Street growth to what showing hitting would of we that first achieved – we Tommy. approximately this told a its testament far not and that's XX% the is take basically on we're licensed on. how

Edward Yruma

Thank you.

Morris Goldfarb

questions. your for Thanks

Operator

Murphy question Piper Erinn from next comes Our Jaffray. from

line Your open. now is

Erinn Murphy

Great! of me review questions going couple Morris, a guess Thank side some you. What of well. the the on of strategic the from business, first perspective just are for far. morning! any the Maybe thus a you and Good you've that landlord negotiations I things retail provide as on on can what's uncovered? additional detail

Morris Goldfarb

assure you you have discrete but are done, in known when you you it's be We've largest with we’re process. how any and one Street that So both our satisfied all with that to I we It results been we position with down those where will process. near well. in at and of have active as probably landlords need wind will comes be a and the Wall who be two you time. negotiated to given you businesses, the line we're a be believe there that will hopefully of those, disclose is together as to finish

are got you've of confidence a they – have to company appropriate or that a in things invest you tough are little the doing So that the the that negotiating to process. all manage cover doing appropriate through in, they bit

forgetting to not Street. we've what are We committed Wall

years tell that We retail in you are the done the we're To strategic. all be where of in wouldn't exactly damage and we mitigating conscious been are, last the that few it. has

Erinn Murphy

from What have order the share next How questions book then couple sorry, know brand or just a you seeing the season. on into last – far? where is And you spring thus retail price Can you portfolio about the you share your can increases. so the think done open-to-buy I consumer you what you. we then with within thank Understood, retail – backdrop. I side, quarter a just maybe on And spring first guess open-to-buy-dollars, taking of dollar the you're as go you responding? much. Thank talked

Morris Goldfarb

you're for it's pricing you know the an create In milk if art. there's increase or matter. screams when steel or fashion in is fuel down business and an as fashion where not same you Erinn, in the quite So commodity a the consumers – that up

put You're the same, it's out. not making product that not vat and a is pulled always into

able as to working achieve. consumer as prices changed fortunately, looking we're the change accommodate what we our and fabrics, is our of now So art raise some as we've fashion is we to

We are not a not Bergdorf resource, are Walmart a resource. we and Goodman

We’re At kind might business. be deal Bergdorf of zero try to Goodman Walmart of there'd great to a in a raise every nickel and be middle-market there might sensitivity impact. you

careful where thought We’ve prices to might We're and it's quite and be. gotten it as our that we not been working. the challenge we it's increases raise

increase We are and consumer. it on to delivering, we're value that we are great product is imposing certainly the known worth the deliver

And your play can't what of stores the inventory. they've sorry little spring Erinn, bit today and brought difficult. the are the in turn-on It's inventory question it's into I'm their Retail spring order on a that is tell order book as conscious levels – I you book. critical record-breaking. past wasn't

a they our might being that put in kind include risk have in some middle, is. We're to inventory are the take We've as that that the retail isn't level not they verticals. the forte, past. So we're shown position refuses in of retailer the in taking of wholesale wedged

So so many we're any longer. composed salespeople of not

in buy of estimating of nice differently the amazing a much getting accounting will It's than buy retail front ability about what have when and planner planners, the flow we it's their planning. about planning We're buy numbers not and consumer and and we some a got historically. looking salesman products, a product. assume what best to the product, we've that venues product, about about just how our say stage measuring retailer It's we we at all we is to we showing cycle It's how ship. has and need. what to the organization from the as will business Our

Erinn Murphy

holidays! you. Thank Happy

Morris Goldfarb

you. The same to

Operator

Our Kernan and next Company. Cowen question comes from from John

open. now line Your is

John Kernan

Thanks taking questions. everyone! morning for my Good

Morris Goldfarb

Thank you, John.

John Kernan

performance bit the head the what tariffs. year-over-year what so for improve in was change margin feel pressure at can a the you quarter did the color thinking more third quarter wondering you about even know, fourth wholesale with margin just we general margin you does margin. underlying The there's least, expect how talk gross a beyond? incremental channel, and of on You underlying It merchandise and you Can the we to fourth on into give quarter? little and better like gross than margin have the the just us gross quite are in and bit modeled as

Neal Nackman

Yeah.

fourth-quarter the topline. third year, look, will lift. to again, we exceed the before despite the we with that. to gross mentioned additional So did so story the we prior our up have. help for in margins It the And tariffs in a against that think wholesale think It show again lowest We did margins We've quarter. some positive reiterate, the softness wholesale was of that's expectations. and comfortable that had we're just us offset we compare pretty do in feel

Of we a offset bunch John. we're but taking that expecting of in we're that's inventory what and course did early,

John Kernan

you back it’s for third trends in fourth that line – you in the you did are and looking line actually back quarter. in think more to in to Actually line Alright, relative the overall know, up top-line be in quarter. with and inventory and I improve brought it sales then

where in the about cash capital into can and finish? you finish on working free pretty that I you flow going the give If are us now far a color it the – quarter, to pretty for inventory, year-end year; good view that think thinking you where guess is you've will do any now got of you then how we're fourth

Morris Goldfarb

and the is retailers take is in We're extended Historically that What that have a control we're through that fourth-quarter. or path much business. carry you there co-operations in on sell coats approaching had from with season. the normally one an can and many done with, a to the of be it how now. this, is we've pretty inventory the stores the they our two getting cases right advantage we We third-quarter. of we've reasonable on of what are department shown department proved in would season we part Well, rest that conservative our coat stores spring we're we out trade know

that lows to level and our anticipate to of we're history almost coming we is back Most showing it's inventory through record business explanations, as winter said products down proved planning our QX So economics earlier. the how and is planning I that it going to coming as can provide in out.

we only will with low we QX inventory end So the of greater year and think improvement. end show at not will believe I the even

Neal Nackman

and John, a back we of of free $XX pretty bought year as thinking for the so we're after cash million been about generating in far stock it's during to flow. million, as us cash that about $XX strong is flow, free $XX year, million of course the it's that terms

John Kernan

Got it. you. Thank

Operator

Company. from comes Patel from Our and Needham next Rick question

line now open. Your is

Rick Patel

a morning the Good have question everyone! drivers, I revenue. on you. Thank fourth-quarter

some much curious pipeline? jeans do new CK of I'm So business I'm you expect in you to growth and trying shipments to driving denim do quarter as wholesale, from we understand get the how think just as about expect the new how the the Tommy in underlying business much initial well. is classifications growth from versus

Morris Goldfarb

will the as next read ourselves we’re shipping the what classifications both, the consider gives and it’s – a the gives wouldn't us year read new on It's look doors impactful like. all. at in handful retailer a launch; as it soft and of I

due If you're classifications, it an not planning in year be the business on this to the in. would put increase to additional our

Rick Patel

some the fast in is can there. And it. how a Got as you talk whole? to you about you have things market think what industry, share When gives about and category there? now, gain that right about interesting jeans can development confidence talk You the really growing overall category you

Morris Goldfarb

shouldn't junior that of take tell a composed – is composed around T-shirts, the with jeans I a it's active we it as woman that's would They play, components would somewhere accessories of to know a it's you literally contrary It's estimate all to outerwear, hoodies jeans. XX% be would the shirts; the of XX% to jeans you wear business what So looked its a people if her do their would composed hoodies, that outerwear denim; with And as would based, pure of more you our the some denim it least way. are you at flipped inventory and business, in they jean tops, it. XX% Levi's business or of like denim be their other – the be Wrangler I and goes business. at

don’t misnomer the point-of-sale gives perfectly us brands just to in It that jeans the it's business. So store a it. it’s additional that – believe fit in an we department and have some

have impactful. visit for the have the adjacent DKNY we've If we consumer must stated and Tommy, As and Calvin, location we in have all combination our commentary, a it's of three. we it’s they share real estate,

trying well, that future. exciting classification it's us the this internationally for as again, numbers. But plug let for year's so some this don't it into stress of to do We're an me

Rick Patel

Holidays! Happy Morris. Thanks it. Got

Morris Goldfarb

for your question. Thank you. Thanks

Operator

Bank Our of next question America. comes from Heather from Balsky

Your line is now open.

Heather Balsky

also Thanks. than sounds is performed how It And the just retail wholesale the EBITDA. of so can like then expectation? for business my you about million that? taking profit about through are in expectations you you around remainder driving what's revised wholesale were what your quarter $X versus questions. delta walk especially guidance, for thank Can Hi, the lower last your talk and you talking quarter, your

Neal Nackman

you the level terms with priority. orders I we respect the I'd on-season not tell in that guess of of would certainly I were third color quarter, to had some add what So anticipated.

we anticipated than In slightly than more and was we weaker addition had had to retail certainly that, we lastly – it promotional also business was the anticipated. had

– in full our reduction is second in forecast of on of And terms question, full the with now. so retail that in million EBITDA the $XX terms your or approximately of respect part EBITDA, to half the your impact of

Morris Goldfarb

we common overachieved, Heather, in it’s performance, on we ship. – in out almost we're kind that in we question that the classification We're our of your best-in-class, response that department well wholesale universe performance every much proud pretty with. stands exist exceptionally that store knowledge we the very we to sector did relative to

So on up earlier, of that – the the strategy not with meeting shipping wholesale stores for to that on, little a moment a regularly we serves we focused that stores. fact the on I issue to them there as not differently. everything we're us department trying into and when focus they able anticipated Part But performance bit, and hurts is said Their bit ship are what that our well. both is inventory are little stores. we're come with their are into a going churn the put managing

Heather Balsky

that look And wholesale is your when in your expectations? terms of in, fourth-quarter you environment factored guidance, at how

Morris Goldfarb

was an a the indication. that service. stores We really own retail Friday both and in department good we stores Friday, Black had our Black

being a because a of couple what conservative, been categories. couple other Taylor partly accounts. in lost at cited goes of on bit Karl a our don't There the loss are retailers understand minds. We exactly we have some We and & Lagerfeld of We've little a changes. with Lord

through are to and of us largest the one who vendors Lord there their to on out is & try and they they as today Taylor count. managed are impact door they We an figure

certain. not we're So

have. about are We certain we what

stated. we've everything have We

got priced We appropriate We've it well, like. are is don't balance we retail sheet. have the of inventory. not a have what we have have we a dated is inventory, we great field certain great product, What

manage business speak trying can't we're appropriately. thus our for we that and So to

Heather Balsky

much. very you Thank Great!

Morris Goldfarb

Heather. you, Thank

Operator

question from comes Jim Duffy from next Our Stifel.

now is open. line Your

Peter McGoldrick

Jim. on I is curious again my tariffs. question. Hi, for taking was Thanks on for this McGoldrick Peter

any tariff how concessions you you fiscal for what be progresses If into and in should potential way mitigation expecting ‘XX? fiscal Can us could sourcing, ‘XX we remind between price price increases. about quantify

Morris Goldfarb

for we been bit product. our good best-selling that vendor in little we're cooperation it we're retail side news We producing a than and that the product the has historically, guess of is I bit a the is paying getting fashion stated base; the the be more world what news, do. is bad we'll of earlier, is fashion product our Clearly little more out

that success. Today is Historically business. the for changing success the what replenishment is driving fashion of the on inventory side that's we was really and depended

prices, or your raise last you are drives So four items it's to three had the the for not success, years. when same that replenishing fashion able you've

respond to So fashion. quick fortunately we're to

we can and respond move product more done to consumer that have the quick the the salespeople to due of They of piece productive. responsible most it's damage We needs for are all and probably a designers to through is will be are planning count. They some our quick cycle, are to than all that and mitigating tariffs. the

tariffs. It's product operate And not same entire competitive challenge. efficiently industry; to the the all a ultimately if has are community the we in delivering that's as as and GIII the that as as we're We that measure paying It's we competitive come. consumer. they anybody world. alone element as the we stands into resource only remember, these to goes in, buy as every Everybody we in the need

So I'm comfortable that would if we last there was standing a man, it. be

in company coat we We a were in are gave doing future. wasn't everything that is company This earlier, when a built XXXX for commentary In leather In you the to I $X.X yesterday. company the XXXX. find I exist well. this hard-pressed we all leather company, product to that and them million don't joined was today and fashion coats, doing category do of a we be do you'd it

that be company. when as a change, we've and the will to up won't served served company can but highlight and five changed ability what years times. we’ve our doubt we've can successful into, now, in we is also model category the about achieve to you category recognize we we where is tell change Every needed, success is an become and operating a anything that I a that up we've no there dozen same enter that's company today, be us from

Peter McGoldrick

It on for the the like then impact questioning. Taylor are brands or backdrop. and delta of in & line relative by brand five the tracking, have? ex-Lord other to you, you a might was sounds follow-up and revenue well itemize power tracking classification Heather’s you reasonably category to any Lagerfeld Can Thank Karl guidance outerwear or

Neal Nackman

Again, compared giving. been are you originally not as we know might year. the Yeah, Again, very you well, the are that but as not performing. they high level to indicated, all we prior of is as power the performing brands performing well outerwear business specificity, have expected, have

Peter McGoldrick

you. thank Okay,

Morris Goldfarb

Peter. Thanks

Operator

Anderson FBR. Riley from comes next Our Susan from B. question

is now Your line open.

Susan Anderson

to your I that thoughts taking or you're I Revolve? as even question. for such my updated distribution are structurally Thanks DTC. with could with distributing or give focused where morning. good continue challenged. your on as on I know was maybe you be wondering Hi, own if you stores department growing also your online then the other guess and retailers Amazon on

Morris Goldfarb

is one, So guess last which I Amazon. start with we’ll the

our every growth We good us not year. brands changer game a yet. at have We distribution product Amazon. All for sell we It's year; every Amazon. have the on build fairly double-digit

provides of and our Karl own creating marketing suits of that Donna Lagerfeld, growth our have and one us and ownership versus the We owner manner a site us licenses. with ability affords business brand in it the have today that partnership with with the own we of online that an DKNY, Karan a

areas those nicely. growing So are

with were ship Europe, of some American in resource, the achieved ship us to to cases North we've America, acquisitions What a U.S. well it. many market into Asia couldn't the ability We we simply provided we right into is these globally. couldn't was licenses North and as the Historically our that

at it's of Russia our So it's quite not doing and we're East, grow worthy forming successfully, we're today we an discussion. are in very and with, not of are and distributing Middle alliances where in pretty world scale there's attempting in into Europe the area now the a we that to China well much business

well. modify how are that business. what Corte try elements and their we U.S. pads. We three-years they very are we're taking from and to or not opened, shops how Ingles are next believe in to with to anxious within They improve We Europeans can we've its the bringing XXX us, them and selling the in they I get El Europe doors managing. that classifications eager to learning El XX the and do are of and shown learned They're Corte we're doing approximately in believe categories

We So believe will growth. for succeed. we that is potential

up to strong to my first that Today be for Coles. more resource, and a believe we've the many scale. really have Coles a initiatives, known really entire my startup for it resource. thus we Pretty got initiative was as go We Penney a working time will was with Coles place of JC favorite pick not Coles. history much We're initiatives not

label them dedicate some of of that them to might we are them Some licensed, exclusively. maybe and private some brands

So time. goes door balanced in there we is have growth potential. At an business a to the have retailers But think same - we count that a think time the as with. in trade there unbalanced is we I I where concern

Susan Anderson

then now. it I Great! of then it a or follow guess little if think helpful. lighter little expecting And flowing dynamic so could in category wholesale I across that also for including Thanks. just being first-quarter? retailers was as just outerwear up it That's specifically, see brands sales did their outerwear in a I was to same and you now of season prolonged the curious; that one this all on like inventory bit sounds kind problem and I you're replenishment sales quarter, the your maybe the continue outerwear very the way just bit a expected are was than

Morris Goldfarb

against year's year, we was October this and didn't which of brands. incredible what side of in stores in last business an last business for planned coat it the are is the business, one department the flow today. coat year evidenced October. month anniversary year. So The we their inventory brand. unique It's did It's incredible the all the month manner of operating quite not our is

it. have the extension sales might and what's of what the and with on did occur coat occurring now. all and that partly The is and of the we for us right the we anticipated partly The issues was season October. with the with the were therefore weather working a believe side of not warmer product for we've call remedied replenishment as not We more good

that's We on that been, have business. the and business. been our selling major and inventory The coat flow the have maybe that inventory have the of would impact would of great side

Susan Anderson

Thanks Great! great and helpful. over That's holiday much. the a have so Good holiday! luck

Morris Goldfarb

our Operator, Thank please. will be you. this last question

Operator

comes Matt question final from Fargo. Gulmi from Our Wells

open. Your line is now

MattGulmi

taking Yeah, guys. good Thanks for questions. my morning

the the that you maybe Can and of the Wilsons the mentioned? million $XX improved want brands. you retail XQ? impact and you maybe changed at on know Just tariff remaining had guidance help then on in you on in given that the impact and guide to us applied on in traffic saw you the and full-year business, tourism you both if based your Bass. for for then you all, XQ know just had saw all comment if quantify at just comps XQ expectations had, Can comp headwind stores And can you sequential lower side the comment across

Morris Goldfarb

in had was we was we owned had of were paying the that inventory tariffs, So We but impact pre-tariff QX tariffs that somewhat negligible. inventory.

with the worked margin the can So us of out blend enhancements were you that two see for as created us. the for

impact in low-cost be if QX, continue, will as we future. our for deplete on increases you exact of more and aren't a number, inventory. enhancements in there. those be were they way of year, life in greater is on There of will QX goes there time an As so than the I there QX the can't quite there and QX, tariff next impact give QX but

year, traffic running to both the neck was generated far And sales of in than worst that concerned. stores, Bass. of as decrease traffic is done to the brought far which far were brand flat are traffic in and as double-digit greater DKNY we flow, was in the working business in the bit neck. was a Lagerfeld created were customers are a as had an now. that register through at Wilsons and the that of Their which our Bass traffic little as probably amount traffic for and register issue kind they Karl We inventory last right and but the vary. us,

two as price have negligible through brands. as Lagerfeld Karl Bass. that said and in So larger customer change DKNY at impact working we're DKNY A pricing Bass finding at an to does we Karl sensitive we're and and Lagerfeld is earlier, at they a that pleased, at has increase somewhat impact. price an are we're of don't Karl as the I very Lagerfeld, DKNY other that and pleased We're with and have the issues

outlet – of has is Europe DKNY last in for is for outlet and the feature well-positioned are the The for weeks fairly we few in centers business added been some charts. the there and DKNY the off centers

us helped well. has deal that as So a great

Matthew Gulmi

Great, thanks guys.

Morris Goldfarb

question. your for you Thank you. Thank

Morris Goldfarb

you your us and questions very finished we're with I Operator, morning. much thank for and staying this

Operator

you concludes and participation. Thank conference. Thank This your today's for you, ladies gentlemen.

may disconnect. You now

Morris Goldfarb	Chairman, Chief Executive Officer
Sammy Aaron	Vice Chairman, President
Wayne Miller	Chief Operating Officer
Neal Nackman	Chief Financial Officer
Jeff Goldfarb	Executive Vice President
Priya Trivedi	Vice President of Investor Relations
Edward Yruma	KeyBanc Capital
Erinn Murphy	Piper Jaffray
John Kernan	Cowen and Company
Rick Patel	Needham and Company
Heather Balsky	Bank of America
Peter McGoldrick	Stifel
Susan Anderson	B. Riley FBR
Matt Gulmi	Wells Fargo

G-III Apparel (GIII) 4 Dec 192020 Q3 Earnings call transcript