GIII - Earnings call transcript Q3 2021 | G-III Apparel Group, Ltd.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the G-III Apparel Group Third Quarter Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference to your speaker today, Neal Nackman, Chief Financial Officer. sir. ahead, go Please

Neal Nackman

thank joining and you morning, us. for Good

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

discussed expressed are that the filed no Forward-looking the to those differ could call I company results operations documents guarantees or Chairman in cause condition materially The not update SEC. forward-looking of to Goldfarb. turn in are Morris actual results actual implied statements differ statements. our now financial statements. the with the and company the by Officer, Chief may and forward-looking company the from duty or undertakes to will Executive Important factors over any of

Morris Goldfarb

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

lifestyle are trends to quarter, through During sales improvements this in to Retailers our and out previous significant quarter. pandemic consumers sequential past we are adjusted manage realized their figuring this needs. from how buying

identify Our as casual in and merchants well attire. the comfortable as able early on consumer were to clothing shift meaningful demand towards Outdoor active

to period global challenges focused fortunate have keeping as navigate G-III. proactively team our this an this the right done to right logistics the continue warehouses working act redistribute the behind experienced through we scenes. resources remain to the distribution have and empowered at and difficult of time quickly agile dollars, We're also time. an very team talented to personnel time. purchasing job enabling our They've to been The As by and met an unprecedented at us They are organization, pandemic the and presented operational tirelessly throughout price. allocate have for inventory incredible this right

situation key continue this to retailers our as elevated a power as brands gain Even to position share. our to our continues supplier market we've evolve, and

financial quarter $X.XX let's compared million, diluted third fiscal third Net the compared last $X.XX share year's quarter income year. October review Net Now, for was results per to $X.XX XX. our the were to $XXX billion. down sales for XX% ended last as

quarter third launched Calvin the driven brands, our lines Klein, power DKNY, were Our Tommy as and Hilfiger, sales casual by as newly athleisure three well and jeans outerwear. footwear for

levels XX% managing with the to tightly comfortable We our quarter down We last remain ended our third and are inventory which inventory composition. compared category third quarter. levels, year's

we expect Looking quarter. at last fiscal this fourth to XX% approximately fourth down quarter, sales be year's to compared

Let growing me business exciting seeing strong where accelerating our digital fast and and trends. are we discuss

focus capture portion and they these accelerating response systems, the sales, larger distribution quick networks, invest we're global our resources consumer digital our shopping. a to well continue where to and creative We To as in new are marketing. follow investments of talents, as best

approximately last our quarter, up XX%. year's retailers our the approximately for XX% approached store digital For penetration from department sales

with comparable ahead really We're demand increase XX%. business, excited own digital China, in our we sales In than opportunities increased early more its our continue that the about our us business. in to excess for As in the sites, quarter. stages, experience online in lie doubled digital of although for

and sales the moments few discussing a product that results quarter. for spend the categories Let's drove our

for brands. demand we all saw athleisure across accelerated expected, our As

design best very in providing as see product able to for as to significant move in driver fashion we restart continue an present programs as are quickly and shape. both important stores replenishment technical With Klein, we three Our brands, takes DKNY, and our some a we and opportunity that Hilfiger forward. Calvin the Tommy and known athleisure are of demand online represent of as sales power to of category

tops Our jeans Tommy of Hilfiger, bottoms, and [ph] DKNY and fashion a wide Calvin knit comfortable casual variety relapsed and woven trust are Klein, on focused and collections and and leggings pants.

confident We can our be lines that $XXX of grow each feel expect and to growth million to these these profitability jeans lines and a contribute business. to

to Importantly, important further us very denim these and lines player active consumer the period us have a time. enabled become businesses the short and in transact also with allow lifestyle. casual today's with us younger space align an in of engage These and to

outdoor we this the of demand anticipation saw the better Speaking weather in active consumers, quarter. a colder for lifestyles, of lifestyle outerwear and of

and stretch styles, active holiday fall future. believe mid-weight foreseeable pieces is outerwear as and the outerwear consumers various puffer our consisting lifestyle for as offerings jackets layered of and an transitional We business well of well featuring fabrics For season, maintain the our expanded positioned collections featured wafers.

As we focused offerings sportswear, fall holiday the again and for on season. for casual

sportswear show themselves and for lend features on great As some collections and perfectly prints, colors which searches digital well gifting.

dresses Our by feature to and bottoms. seeing at in saw quarter, the product also Similar as styles DKNY our including DKNY comfortable sell-throughs and during sweaters, relaxed offerings. saw we the sales tops our footwear strength footwear lines business well We're driven handbag knit Klein retail, boots. trends great casual canvas, and Calvin second strong as woven and and and

our new Here collection styles again, is towards complement lifestyle. our shifted softer consumers' which

Karl plans Paris Let for me growth Lagerfeld business. touch upon our our

complete. chic is the approximately to that demands, essential work in fashions accelerated our of brands with In we've and Paris spring, segment, retail G.H. by Karl This consumers' of XX of launch all developed Parisian new Macy's current the a Lagerfeld doors. we today's DNA. closing Leather Bass Now the our well almost collection stores expect Wilsons

past, operating As last year. we these million the to $XX approximately losses stores segment relating were discussed retail in our in

portion the losses. a to We of expect restructuring these substantial eliminate

are performing than and DKNY Lagerfeld better XX Paris We expected. XX DKNY stores Karl operate locations. Our Paris Lagerfeld now we Karl and

promotional, in less resulting are been levels challenged, AURs. consumers. stores in resonating of product cleaner traffic increased inventories, on our Although Based seen we've the increases still is and with the good conversion, we've higher conversion

partnering adapt virtual to quickly with customers to been selling Our have incredibly offset store working techniques headwinds. also teams influencers traffic innovative with and

We continue a consumers; on to brands our websites Validation strong path are with our to at on are seeing very these for ongoing profitability and both DKNY resonate Karl Paris. results for segment. retail Lagerfeld we

the In addition operations global we streamlined we headcount. highlighted our call, of our quarter our restructuring on wholesale retail that second to

Additionally, like We're international this appropriately moment support rationalized needs. quarter, to we staffing past further savings to that is track and our base on talk take roughly annual cost million. about recognize current business opportunities. a aligned to our I'd to now $XX our are of confident

has the Our DKNY International for XX% held better of in approximately was and business spite quarter up the down pandemic.

we spot month the a increased just a XX% the for DKNY in where bright in [ph] October. accounts ownership we've which month-over-month Middle saw of our the East, in joint in and sales in China, comp comparable new develop to third continue a culminated XX% We our from recovery In trends, XX% Europe positive venture. quarter, to

earlier, substantially. with mentioned China market has local As with business a well-known our opportunity China I digital business brand. significant and global We our in engage see grow the increased DKNY to

have great and and We achieve a growth. talented us experienced management this help partners team to

product fluid great and product. our time. remain continues We through most feel about assortments ability to We base with our one successfully and and strong collaboratively challenging are the successfully work environments our our to retail and vendor of provide retailers to of and good navigating design

call our I expectations. positioned Neal in detailed line quarter will year the third for well with our discussion complete to are to pass financial We now the results. a of

Neal Nackman

Thank ended the effects ongoing The pandemic. for quarter were Morris. of XXXX results third impacted you, our significantly XX, October by the

basis, XX $XXX four is of approximately net which operating charges costs of In and we The our segment. Let the allocations. going in restructuring operations. overhead, with all some On inclusive $XX Bass of G.H. the retail any This which we closing planned. order incur million a to in million. aggregate loss retail to Leather have incurred the with expect us direct and $XXX million, of exclude retail Wilsons charges connection begin is allocated ongoing which will includes this as cost wall restructuring, approximately stores operations, remain support of XXX of year-to-date

breakout relevant our wall the for operations issued in data four release this included have retail We morning. some earnings

third Leather segment $XX billion operations approximately our million ended for $XXX XXXX Net compared lower $XX Net the October operations approximately period sales to year. wholesale last retail quarter For Retail million. Bass million the results. quarter October Wilsons XX, $X.XX $XXX million ended quarter XX, G.H. in of million and our $X.XX and stores of same $XX XX% and our quarter approximately for to segment decreased sales XX% the of sales for third of XX% XXXX Net respectively. in were last billion. sales sales included year's from $XX decreased XXXX million from the sales to

gross This percentage our fiscal quarter. of quarter prior Our percentage to margin gross driven last the in period. the compared XX.X% gross in third the are retail previously XX.X% gross G.H. quarter margin due by to XX.X% The for year's and was Wilsons accruals, longer markdown that wholesale store in impacted and no reversal positively our reduced XX.X% in by operation was in Wholesale to XX.X% liquidations was the was year's margin impacted sales. prior in of necessary gross margins the stores. year's Bass the in XX% was compared which compared anticipated primarily to operations segment, percentage as margin were XXXX primarily wholesale increase by segment Leather

in million carefully. quarter wholesale very in the were share per and loan further our down includes related with effect income of the million in quarter per million the loss this watch or and replaced with the Bass for operations. per wall financing the as million of diluted compared prior income third four million of a per to diluted bonds included the we Wilsons in $X.XX approximately of in to year's $X.XX headcount a earnings this to charge share overall is continue quarter. third share last G.H. savings. SG&A to streamline was diluted equal of in this for last costs, $X.XX non-cash an now quarter. $XX Last compared quarter, result, operations, for We million our $XX term Net Net and XXXX. which same a XX% deferred associated share $X.XX was $X.X $XXX store expenses The and refinanced facility, in in G.H. or primarily the $XXX write-off to expenses August to year. Net We quarter $X.XX the period charge included our Bass income expect store year's Leather per also loss annualized $XX share operations. Leather global Wilsons

strong million at accounts the in net and debt million, compared line XX% balance $XXX very the Looking at as $XXX were to compared We ended year. the decreased million receivable $XXX Inventory sales from the prior of year's in with end to $XXX quarter to our of million position approximately as quarter. $XXX million sheet, million in $XXX third a expectations. prior

Our with availability third cash ended quarter $XXX and approximately million. of

and us liquidity financial enable the strong through environment. current navigate to current will Our position

it the for now additional to last pandemic closing impact turn our net year. the a decline XX% for of comments. in Morris of quarter provide continue expect the I negatively COVID-XX That we the guidance, guidance The to in back for to year. difficult to continue fiscal Accordingly, call anticipate the concludes As to will as results pandemic same the my continues we making period XXXX. for of quarter fourth our to be fourth remarks. impact to approximately us compared in the sales fluid,

Morris Goldfarb

today. Thank you, Neal, us you and joining thank for all

chain built further align measures with collaborated over We can our of was culture pandemic XX validation us. early position success. entrepreneurial future to and proactive any quarter quickly the weather took in partners strengthen in retail financial that our our This front almost put G-III's supply to challenge for businesses and years

a of combined proven with Our agility, formula. across accessory strength expertise broad categories to a and be our and apparel winning wholesale has range

ready further condition I'd questions. of share, financial all to entire to growth our like their of stakeholders support. market we're strong for they Operator, some Our On thank our G-III behalf present drive themselves. long-term advantage take well and increase to organization, positions opportunities now take as the right continued us the of

Operator

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

open. now is line Your

Edward Yruma

Yes. Hi, taking the all, good morning. question. question. I Thanks guess, of a housekeeping for first

across How we about of at today commentary constructive big have is the growth? should kind brands. business on performance, you how medium-term How And Some athleisure and kind know could you. know you're then what kind of as think I your of about Morris, and of to I be multiple stronger are vaccine Thank follow-up, think half business by a much then. second 'XX positioning starting apparel you hopefully demand? against

Morris Goldfarb

spoke a lifestyle. the topic business of sportswear do. I that consumer a current dressing of for casual as a category, in Thanks way everything really athleisure our emanate flows isn't dressing. Ed. way we are questions. almost the And dressing as This you, that of Thank the it's new consumer to athleisure elements or There into from of

our is a what looking is bigger one today. the they by positioned Tommy So DKNY, department one department piece, reflects mix followed category -- simply business. offering. and our could would entire our stores, size. store our is consumer the for athleisure and pieces largest say, It's be as of the athleisure That of category. athleisure It's category Klein in product of classified the not Calvin piece largest said, the of of is I Hilfiger

also a DKNY This our offering year longer -- look, our Jeans is -- in by a What addressing Tommy it's to the is significantly business casual which what lifestyle gene the its not mark followed business of we in business. grow aggressively business, make second we're it's CK it's is beginning again, very year gene Hilfiger no likely and So developed. startup, quickly. and well reflects with is gene first the again the fairly to in penetrated and very,

I You'll we size. three one to venues as can retail million limited see serve. not in said be us retailer, well individually distributed. it's those It's in $XXX believe the fairly businesses earlier, that we all And

of far are year is We we out QX know we're the second we collections and As our lots is that an in we learn. are as to is What going consumer half that for designing building believe looking emphasize the mix. product aggressively We're calendar and there for agile where product creating We kind what and suitable that, organization. 'XX, recently. for. proved the of of just

believe casual will -- be back QX, for business we've traditionally the and dress this have corrected profitable We end of even our year. the the pressure and altered under we much the as year, the dresses We've styling They're more been business path we've highly our well with us. social as and dress QX. for

with addressing styling. we're it So

resource is home and that a supporting a structure very the and pool aggressive and have to we our it accomplish the we're does that intact, figures we've We success. an with much are unimaginable company got needs, globally talent that office all of out aligned

asked. So what I hope answered I a of little bit you've

Edward Yruma

I support lean heard about but I talk it might And in. drop one other infrastructure on inventory. little you. bit that, maybe dotcoms how for know quick vendors your of is a thank Sure, follow-up retailers sneak retail you We more partners? why to comprehensive of the do to ship kind of your Thanks.

Morris Goldfarb

It comprehensive. basis. do not it a We spot-by-spot on is

some store structured shipping We're We've department searching drop putting to the not responsibility we're in taking talent as shipping, will systems be. partners, direct from are estate. the Amazon degree. we drop for as that We accommodate our in that but well of hired to appropriate real to consumer place some and away and for

should essential investment appropriate appropriate we staffed the an and time over need, aspect that that It's center we're it. now appropriate accommodate and it become searching the of it, in all for the and We've can it. distribution we're given that business. greater for So recognize making, we're the we

to different cost done that it's it. Our the to to a to distribution shipped is company, Come is and consumer. entails an for in product know, But of a as year, structure we you needs is hanging, that have -- answer efficiently I'll that from than me drop back on the started today. that a be and little as what shipping we're you cry is what far is, do we a handle a coat lot

Edward Yruma

you. Thank

Morris Goldfarb

Thank you.

Operator

you. Thank

Erinn Our from next Murphy with Piper question Sandler. comes

open. now is line Your

Erinn Murphy

it just sounds were morning. Can Morris, for end third books outerwear the Good quarter more in a like outerwear trend you how little bit thanks. up did and season? speak seeing the about for good. you're order Great, what

Morris Goldfarb

the So, -- thus we we weather written predominantly you orders are wholesale and as before are a know, are company, reacts. our

produced the them unfilled beginning -- an QX far had in is QX, didn't Most looking what the weather as outerwear again good of is people or outerwear unimaginable There was for. The filled acceptable, them. in the of outdoors derivative most trends QX shipping and outdoor produced for Retail there that it activities end a all that basically good, it time not be. been quarter concerned. fabrics tail and -- We ills. puffer of is are of cures reflects jackets. eating, outdoor weather producing third but of was slowed for is more spending it. our breathable the amount It's our stretch to would like was our we're people of has we the So -- are cooperate, in outerwear for down, as those and in

unique were of fabrics, well. have quite fur is that's a fake to with We good. was born, business Where successful not years wool our some leather business was And the ago -- we now. in unique that that have sold lack incredibly we and business G-III were right that we play where which

So it's our driving mostly that puffer and business. are stretch fabrics

Erinn Murphy

Got guide? of fourth Just a just this you the Neil XX%? fourth for just quarter, it. speaking that slower about the would in think sales that's kind what quarter just Is slightly through start help then, embedded wholesale was the quarter? maybe fourth some Morris sell us season of the to decline And about of think kind in about down

Neal Nackman

from Yes, the at were you see we to we truth. Erinn. we it, tell look what really didn't huge decline When a anticipating

Erinn Murphy

Okay.

Neal Nackman

shortfall demand which needs. terms the a in boosted helped but -- of not we And a was was of inventory retails, our QX, I expecting. were necessarily think QX what think actually I really what really than it was QX by stronger at we weaker experienced

Erinn Murphy

we you this guys question, process then there cost very just Okay. realizing. areas ensue kind next you. just of the in Thank year? of savings front, But is of key how this go that and reinvestment the as I another year, been year, in that do SG&A have disciplined And that you $XX think million into some you've on been of to able know last you're savings about, for the

Neal Nackman

will look still and year, a -- normalized, have it's won't right. normalized completely we'll Well, have be yet more we

at of people, the people this we had So the we've pay cuts, of significant last now the year that we month number big that all furloughed taken a quarter. furloughed we started are taking savings the third back

pain items that debt charge taken will some normalize, year see people We year. SG&A have business quarter the the in of the some as on result spends, going pressure overall well. as marketing, some as big be the of pressure be we Marketing continue pressure have expand. that and first this not we there'll And let's spots, this we'll We've next a start to fourth and a I very of activity we we in have will But points -- We us reserve. did -- So forget throughout certainly some do when think bad we'll that we and the a in be slower some for get that expense, inventory large took bankruptcies. benefits still of slowly into year. result the of pretty of half good to as year. throughout business a will

I So going puts year's and SG&A. there'll into but of offsets the that offsets where savings, and be next see to some the takes that's natural some

Morris Goldfarb

about dozen reduction and Europe Southeast in a our Erinn, in is people XXX headcount over people ultimately, people North in America, XXX Asia. north of

a globally. collectively in over XXX headcount of that's is there place people So, reduction

on better and we these to So probably area we that's as we expand refine solutions will business understand our prosperity. that an

Erinn Murphy

all. Great. Thank you,

Morris Goldfarb

Erinn. you, Thank

Operator

you. Thank

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

open. now is line Your

Heather Balsky

you. thank Hi,

thinking estate opening with with promotional what need quarter? XXXX? closing? to Karan First with just the perspective quarter question, opportunities environment, then about curious being your be with are stores business, you're some might And And hear up question, that your in separate curious real of that you're Donna holiday, remaining how other retail fourth especially for of closing, competitors the a fourth seeing that what I'd regards to as

Morris Goldfarb

promotional by bottom not that that their it's is others period of we're quite but quite it's less there. that all-in-all, honestly, the are expected. incredibly there rather It's because this on the garnering promotions of undated acceptable inventory; -- might achieving would return success than are Heather. retailer than pandemic, is out some There inventory topline. are promotional needs seasonal. one strange in driving think line And It's that so have the with because investment to you, a and heavily Thank then we are move, on highly But seeing it's retailers okay.

beginning than left on kick-outs. able and a a they are success, historically because DKNY far over success that to time. at expand two abundant the as estate the of could sign retail, estate -- percentage with is time be expand As This been more the might primary and good that brands have real offerings we are will is lease much they're at to we fair with be least real

-- not our that We're of XX-year coupled Bass learned mistakes areas with we're of with of it as we closing DKNY. just recently real affording There again. to that aggressive leases down that we're Street considering and High we go the demand paid We're opening estate are in dearly for for some to Wilsons. the So way buy We Europe. U.K. the there. not our have lesson. likely is themselves would in out opportunities on that on path We're great fairly

in North well other in our we the in Europe center are which store we compared U.K., -- stores world the -- in an and performing stores to exceptionally Our America. have our outlet best store the two in single U.K. that is have

a venture North of America, that's region have North in cannot Lagerfeld globe So is their Europe, domiciled Europe but Europe. joint ours partner we than and is expansion are Karl to expand the likely America. in We in expand we other

grab question. and great in are be for got cautiously pursuing it. Thank Thanks very, retail you, a So It's to Heather. very and we your jump offering for opportunistically. to us

Heather Balsky

Thank you.

Operator

you. Thank

Stifel. Jim Our with Duffy next question from comes

now is line open. Your

Jim Duffy

Thank Good everyone. you. morning,

Morris Goldfarb

Jim. morning, Good

Jim Duffy

Wilsons with store to you the the Bass SG&A isolate associated closures? some Can eliminate that on to dig I SG&A four wall stores with in line. you the XXX expect and want

Morris Goldfarb

Jim. Yes,

If look summary actually you you give a at well the the release. press in we --

I quarter at out to we queue. come when segment you you that be think if the with get information, will look the able better third

Jim Duffy

Wilsons But Bass retail versus Okay. the the were know on stores don't the segment. and we what gross margin

is not to there sufficient So disclosure out, that figure Neal.

Neal Nackman

Let look expand Jim. and want that upon us at that, we see if to

Jim Duffy

And then, total? profitability in have the QX like it previous it looks the and given along to for retail stores quarter you some suggests with added year-to-date don't profitability Bass Wilsons disclosures you disclosures the back maybe third and QX, because the what

Neal Nackman

Yes, the tax use and effective difference Jim, a the pretty rate. tax the big is there rates. rate high We've got tax we

focus see time. you if So add to operating losses no over increase you There numbers, over pre-tax back. was the the the steady -- on a should

Jim Duffy

of next overhead that. Okay. year, segment, look know model And retail will in you wall stores? for the the SG&A remaining remain I'm the then, that take I'll a residual that curious at component closer SG&A plus retail within the what's the of four

Neal Nackman

year? that down more million to look from make trend in to improvements into thinking I that thinking Yes, next to will think we'll about absorb. year to probably probably $XX of some today, in trapped have let bit at probably continue the then We're We're is overhead. that and hope me as of -- little we we'll overhead to speak million that a that a this line that go ran and we trapped continue about $XX about terms

Jim Duffy

to SG&A how building you well I that helpful. run on savings And the with the Erinn's Okay, guess, savings. SG&A of the able wholesale rate do question annualized of terms savings for from that year the keep, much be then, you're in expect to that's mentioning below business, $XX this headcount, million remaining

Just the trying into that comes back much to understand of how model?

Neal Nackman

So, does of keep portion SG&A part is certainly the variable that it. the in move other mind, our of

as in of we lift. refer And advertising that and is category well. course, licensed the will variable our of as then, to general national have lift businesses, with our our associated That sales, shipping form so have we comes in we really as selling and third-party expense advertising variable

two expense So the down that we'll variable then periods. main advertising the payroll as side for will of these those you'll part. of that most increases I drivers the expenses sales had go the have bad mentioned, some and we've be increase with then the see on up and offset back in by are And debt two components

Jim Duffy

and to Thanks you One to look on looking the to as for and be will 'XX me you category for mix brand on. detailed would year? improve in I the then roughly on to back gross move that expect more Okay. responses. XX%, based wholesale margin next able mix But fiscal out

Neal Nackman

of No, I And we've that's result year as Jim, gotten think margin this markdown these margin think, the a gross that good I reversals. a that pretty for in us. benefits wholesale

gross margins in fairly start if gross margins. our those partners about So I are think prior to you the Keep got of XX% strong. the went back where will we mind, licensing And to for fiscal, we've that's anniversary business. probably

where and think going gross at that us anniversarying our So back you about I we probably that high you a pretty forward. margin operate add in, when think should that's

Jim Duffy

all for Thanks help, Neal. the Okay.

Neal Nackman

Yes.

Morris Goldfarb

Thanks, Jim.

Operator

you. Thank

with Sole Jay from comes UBS. question next Our

Your line is open. now

Jay Sole

Great. much. so Thank you

items if as picking give sales that more should down little you but thinking could SG&A, wondering line the XX%, about bit on color, look us and those gross you Just mentioned a any takes fourth the puts for we the into margin quarter? as be XQ far and

Neal Nackman

will a and little gross Yes, bit the Wilsons that our Keep so margin. liquidation, us. I to put of part in going terms on be at in last of mind, think pressure are Bass we of

get margin As your you can reach liquidations the lower when of final achievement rid expect, product. get gross to their end, you

in keep thing I people again only SG&A, terms start from furloughs did think -- we bringing in to of the furlough. the is mind that back the

So that in quarter we'll for us as the full impact fourth have well.

really we SG&A good some So SG&A. quarter wholesale sit completely sales drop, into did while almost going on will our we line with the with reducing fourth our total of job a very in have deleverage pressure

Jay Sole

it. Got

thank much. you Okay, so

Operator

you. Thank

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

now open. Your line is

Susan Anderson

to you see any the wanted the that pockets athleisure in for Hi, I dresses, I XX%, good increase those decline just sales are percent a guess my how out the that definitely Thanks it in guess performing? I'm then dresses down or those to the of but positive dress I to also like growth Thanks. I side, touch more morning. Did average the curious on penetration. or And on mix casualized rolled a positive you've of our guess taking to penetration little is product lifestyle for close bit relative just half? you've back sounds of question. as growth?

Morris Goldfarb

So, I'll first. hit comment the second

Our The down the drove the as Hopefully, wardrobe there go recover for and is she's out friends. buy being common she and dress have aggressively soon woman's the dress and able is as fast and is out calendar to 'XX. go and with business comes commute the old to half family getting back of business belief dinner belief second 'XX. for is going The and we year, their socialize to dress furious. common is

that the -- And believe and so to be we case.

areas, that -- in than better as any have. we far category in our performance they're significantly performing athleisure athleisure As other

It inventories more prepared almost business DKNY, and quarter by at flat of is the with have QX, piece month compare there comprehensive similar form. tracking we're that -- So believe for high-teens the about And comping company, would we We're that the the it mix. active for Had of to as and that that finding power up. Tommy we missing three is category needed, last will comp all was take rest XX% to we to demand. year. the have CK track in the the brands, level for lifestyle we we've comped Calvin been supply. is our last It about wasn't

Susan Anderson

Great, wholesale partners, of seeing And seeing any XXXX, I'm that's your terms all stores, in very at guess, just curious, from spring department orders what helpful. for then, half? from you're are I second particularly improvement the you

Neal Nackman

Yes.

continue will that improvement. tell we're XX% fiscal We as the and like for spring order to the see this improvements see I to it's certainly year the -- would would to -- you that's in the will that sequential to looks year comfortable type we the the about down of book improvements and out. show that book hope rolls if

Susan Anderson

promotional for lastly, curious relative guess year, Great, how especially products the which you what saw just guess, third high demand? thinking then in fourth given those over and sounded pretty that then quarter that's last on helpful. for I also I about you're holiday, were tight, and environment to quarter, And I

Morris Goldfarb

all depends is world. of occurred, the guess I aware our extends it that of pandemic. on time the up we the that's in the of which closures. It effect spike store tourism back results are Clearly, period in all

the a is is reality as So to is but there again. will to promotional. time, and one is there it's period The seen as If we'll There level. traffic hard promotional intent there a reality. no intense, highly promotional, of forecast then not there need far the highly is become and before and liquidity, to retailer it see create is. a is it We've be

out consumer So but and it's to not based the it on It's fashion, ability has probably impact, side a had is to not all shop an of doesn't hard desire go as it. so it's clearly That on everything weather world. to forecast. the the of want digital she her on and get one might it based cure much

So it's that cut-and-dried again best a but moment. of for an one, answer. the not a I It's little do can complicated

Susan Anderson

holiday. much Okay, luck the for and details, all great. Thanks good so this

Morris Goldfarb

Thank you, your questions. Susan. for Thanks

Operator

Thank you.

with from Associates. C.L. King Our next Steve question Marotta & comes

is Your now open. line

Steve Marotta

and Morris Neal. morning, Good

How last you that capabilities. the else exception that's can penetration channel digital digital in mentioned store increasing You third drop the support XX%, the with effort? of department was within year up from store ship quarter department XX%

Morris Goldfarb

it's but help way good And necessary and kind do, to our inventory. go-forward it collaboratively be with business. a on spending love deal retailers to probably that in it's to evil -- marketing, model, both We not which independent support will our something of we're our which a the of replenishment is can we inventory, but year, replenishment in if will responsibility money our was This retailers hold business. for drive digital would chase or on of a [ph] by doing mix having of

in on East. areas those And to our good side where internationally, success China those are years. charts success world stage and the in some of businesses for are early a having -- the believe greater in we having deal we're of probably penetration us, grow hit We're successes business. Middle in for I in we coming the the solutions having of do So those can that the although have further we digital that, they

be of So would globe the the expansion further in digital. another element success of

Steve Marotta

Helpful. Thank you.

Morris Goldfarb

Thank you.

Operator

Thank Group. you. And Telsey our last question comes from Advisory Dana Telsey with

now is line Your open.

Dana Telsey

Good morning, everyone.

on need going are upcoming -- goods update you. about how in you're XXXX, or you surcharges and manufacturing and this for when happening, capacity you China think and holiday into any getting shipping it and Thank season, and you shipping As on positioned? where what's

Morris Goldfarb

world a there issues really your we question, Vietnam, Shipping, its pandemic There week, for every much from container are it of backlog. of demand ship as If impacted for space has -- been whether is a lose topples. depends have Thanks it high If got we and this closed, is hurricane, we the the have a ports area it's Jordan, and there's on the the containers freight. displacement few day. pretty Dana. Bangladesh our container depends

is challenge, and the we're with bill is then unique need paying can where to delay. we're we off control, that it a We're of find we was not times This we surcharges, or full do. So ladings -- on are freight very, there in what that what a doing we're and the we provided is best boarded do a very year. XX-day where

a container the be got and shipping I were aligned but routes problem. out In and If not And fairly is we fourth quarter, on plan. getting would a what the a was shipping it, third ships quarter all we can of So believe perfect better planned we spite figure good. had the it's world.

our it, product and China, quite right development far not the -- So we're production focused really as on in We're as come focused and in producing on from XX% around product, masterful years today. job hovering down countries to, possibly it's China done several our of bringing production down we've the of ago XX% a this company's production significantly. down of It's appropriate honestly.

equal have we've in quality out gone China. and I'll on areas, that a clear bringing figured the it relates cotton mills quality, areas we duty, what I at I'm appropriate are competitive partner less and quite be. of to test in it's providing a clear not been to has always appropriate in and So that that but We're honestly, not with to those world in China products of -- business as compliant that. price than with I'm an good stay unless the aren't more expects. There mission of stay of politics, are not a to have

on comply we are We very office is to overseas, focused that everything cautious as for. asked produce. in with We've that's based how where we that we clearly produce, making China actually got an China,

of they and -- do it. a So job good really

not a leave line, China So G-III. bottom again, from to it's race

Dana Telsey

you. Thank

Morris Goldfarb

Thanks Thank Dana. your for you, questions.

Operator

Thank you.

Morris Goldfarb

question. more you. finished. we one okay are Operator, operator, Thank And -- --

Operator

gentlemen, this today's you call. for participating. and Ladies concludes conference Thank

may You now disconnect.

Morris Goldfarb

you. Thank

G-III Apparel (GIII) 8 Dec 202021 Q3 Earnings call transcript