GIII - Earnings call transcript Q4 2024 | G-III Apparel Group, Ltd.

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Operator

Good day, and thank you for standing by. Welcome to the G-III Apparel Group's Fourth Quarter and Full Fiscal 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your first speaker today Neal Nackman, Chief Financial Officer. Please go ahead, sir.

Neal Nackman

Good morning, and thank you for joining us.

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

filed company results company in operations SEC. statements.In duty during refer the the not share to expressed from EBITDA, are update condition or non-GAAP in the will and statements.Important the no by actual company undertakes diluted implied the which income, all cause could with the differ The we income net factors any materially addition, financial to Forward-looking non-GAAP per statements that and adjusted to actual may net financial forward-looking discussed are non-GAAP forward-looking call, guarantees, documents measures. defer those are or results of of

non-GAAP We Chairman Goldfarb. on also measures financial to have GAAP website.I is call our to of will the reconciliations in which Officer, available Morris press Chief turn Executive over provided release, these our measures and now our

Morris Goldfarb

you, foundation, brand out exciting another through excluding relevance enables creates I'm we a corporate Hilfiger our consumers.We along the remain us of for believe few in business. Full the the an to delivered. everyone was strong highlights accelerated team XXXX forward fiscal product penetration path and X%. under G-III. results drive strategic deliver joining inspires investing Tommy of our future, we for year new long-term and global our landscape. developed to Hilfiger, and year strong year Tommy the in strength, grew as and XXXX, pressure priorities environment opportunities consumer We a Klein we with and Neal, our have want to Calvin sales the businesses. a continues for successfully tough transition for the plan We're recognition significant our year and powerful year. am important thank The I excited Calvin from We've Klein us. place that our by new proud share Thank I businesses, and of brands, you of in as our experiences but that retail to navigated leader enter fashion.Now a In as about a dynamic

retail As fourth billion for incredible. down approximately compared last $XXX compared quarter With Nautica, compared of belief Tommy above $XXX And XXXX full investing been brands, guidance. ahead.We three collection a of in iconic total solidified dresses, fantastic XXXX. in and brands.The Jeans penetration partner Hilfiger.We great data and role we licenses. key This respected with inventory just validates year, a with relative hit that just full Karan, has of financial sales by and $X.XX categories consumer over newly we the campaign ending credit in the by with Baseball Officer sportswear, XXX position for fiscal we line and management, over quarter, executive $X.X floors. growth and our suit million as last Chief to start. year. only diluted renewed to and to handbags separates quarter And plan $XXX to all remains XX-plus have position X.Xx. to year the from included successfully NFL net our Categories Growth League debt, of for our down consumer brands outerwear, $XX the response and to initiatives a G-III year. which Perlman at greater paid over prioritizes mix X% per The debt freight, repurchasing our compared our last was some the this by the Operations have Net of impacted is we outstanding We a weather has collections Dana had relationships the fashion. in again year's our team year's launch, billion to the Full result, approach into across were is and significant $X.XX quarter while retail that retail further of fiscal launched broad year and anticipate a with brands. the for non-GAAP a sustainable top further our This heart to in our net profile, Sports go-forward the part driven from went enables and largest current both Calvin us points additional has with customers and to which a $X.XX highly team.Now of is fourth brand across own after year. the future. million levels XX% a a a own in marketing over of XX% in fragrance create year spring which and review new strengthened market margins We Nautica this brands gross selling strong brands year margin supported are million in as online our the Major Klein do, to of as was our closer basis sales hired of to Halston over last a believe quarter fiscal and XX% ever diversified This to our fourth American million represented AUR our fiscal the in our grow top the choice runway also increasing let's everything XXXX to launched results. range in stock. good expanded We're leadership by not well prior scale having in Donna warm cash XXX our results. We're driven a by liquidity.Now billion share but continue off most the of environment partners XX%, company's a key challenging.Gross line net disciplined Champion, and $X.XX drove and and Currently, year and increased income growth improvements. division created review XX for let's network. of doors and we our future A talent our quarter moderation $X.XX fourth full one dollars

predominantly brands of a to was sub categories Hilfiger in our review our XXXX. of which the the well Nautica as very take we in new of income over into fall and full on potential extensively and the business. designers is additional sales also generating coming million.Our over the we current the market annual a licensee, business, stream. first received In share broad addition, had range to global develop Champion sophisticated into next $XXX we're of fill Halston a void available for net distribution license archives, see expand Tommy with market.As deliveries the control With collection, can which helped additional another fall the and categories revenue, good master of years.We selling believe modern can expand to we'll the network, life few outerwear

XXXX, while internationally.Specifically, outsized of most our go-forward We to new These to retail development digit timeless X%. Inspired reach market the heavily to Karan, brands launch Calvin growth. the U.S. for brands launched and customer. today's designed invested a the sales have luxury the empowering was this Hilfiger, elegance In I'm opportunity several the lifestyle into the Linda accessible Crawford, our ways.First, in fiscal photographer, working XXXX.One with categories featuring fiscal marketing our Murphy, expanding believe of will tremendous Annie an For generations, needs year and Valletta, full distribution go-forward on extend overall fiscal which Donna models, brand's sales women at of lifestyle X fashion, the declined we're the new Carolyn captures to XX% new incredible share, initiatives biggest excluding brands archives, have have names Klein Tommy Leibovitz. our Cindy total and in are we categories. connection brand. we've We for see of to Evangelista, spanning ethos, support Karlie profitability meet Kloss, registered with runway just XXXX, particularly and all grow account into whom growth, capture their several high collection Amber the including to that to with renowned of we almost expansion, thrilled of partners some centered campaign tailored by iconic a in deliver single along for and important the investing in a revenues go-forward we're

where feel enhanced the the new with brand. experience Karan consumers power better website and Donna of the Second, can look a we

launched will extend collection. brand's fragrance complement at the which we Collection Donna Cashmere the presence.I'm new extremely the iconic partner, Third, pleased reaction with to brand's Karan our Inter to Fragrance, Cashmere the Parfums, Mist the

major and initial already the Our States growing. results product. the received the We're global attention and impressions marketing over in United campaign with billion X.X with excitement seeing

wholesale celebrating core we and DKNY practical $X Our than single is increased and the low brand fashion and digits, committed its capsule as ease, almost Donna some We to and New have presence. high of lasting offerings.In grew a is contemporary a selling the era strength noncore Karan, categories. most to resonating experiences beginning of see consumers brand merging we're plan expand and of immediately. and opportunity product in a across the brand repositioned of AURs Donna other the saw focused we on through year.This Retailers and is North fashion through total time.DKNY with annual half is billion space aspirational In with modern sophisticated elevating and our sales of Karan spirit presence pruned over most launch The well accounts our expand their pop-up we're the for now of product the globally second brand. grew digits for tailoring already commands building known our the of collections new for to We buys higher equity. single Europe, established America, international York. just our and brands

collection.We are that of our In and new launched also brand. accelerating into investments addition, spring consumers campaign taps the digital face media and the marketing daughter designing that Kaia social complement forward energy appeal to brought styles contemporary for This highly press we're younger over core renewed with younger DKNY impressions. and partners. the actress, of with We with a and Zalando key offerings million global other our Gerber, footprint generated Cindy by new the fashion this pure-player Crawford's as XXX spring of supermodel campaign relevant DKNY

around excitement month, drive DKNY.These initiatives many brand of New American new Kayo, it collection activating we internationally, we're sales on end in with channel. sales there's focused the net will reference annual the buzz the with a in consumers. untapped capsule of are for We York did billion and the at energizing point, the North and next all XXXX, particularly a which awareness few no will brand connect see Additionally, over global create heart believe growth and potential when years.As $X the a brand virtually opportunities, launched wholesale to

$XXX its DKNY wholesale an billion reach of As XXXX.With entry the through global in industry. And full fashion were pleased business approached with we're a new and sales Karl growth Lagerfeld, brand's experienced owning in $X consumers licensees, for result fiscal over our expanded our you mid-teen was store sales The year of the openings, if retail into markets international include our Karl categories. team's retail as XXXX to in and Europe execution, icon we performance. fiscal a million.

to growing and separates ample with the awareness in the the complemented of in global his the additional Karl doors. high North additional activations. have expand received which reported were power Including capsule Lagerfeld Met billion. $XXX the grow global consumers to Karl XXXX, leveraging XXXX, the our expected collections global of double along net for into than the new penetration We double-digit single we newly year, and America, our Paix, Lagerfeld de Paris, billion us luxury performed driven line, sales Rue expand the works. approached in and hotel experienced and into Gala our brand fiscal by runway the digits greater brand fiscal as projects retail dresses In licensees, a licensing luxury lifestyle, by new double Lagerfeld exposure, through launch six global by higher Karl sales. suit categories.This recognition revenue.In by AURs year while $X digits. distribution sportswear Saint-Tropez growth sales and vision Macau over well, of see fiscal The Karl Paris location Here the in markets was digits. and inspired we'll appeal $X.X la and million as Lagerfeld increases in and stores. which enabled Sea net to XXXX, into we opened brand.Vilebrequin, incremental lifestyle theme annual X-star luxury solid the offers extend increase in opened store in Further, to our of is We're many in opportunity delivering name its also partners first brand

in We luxury channels.We're club of for more first range in to the the very fiscal to additional Dhabi life bringing the initiatives. will we In wider a Vilebrequin a beach ever with newly have stores in works. product club and the on Cannes, distribution beach incorporate and leveraged the few brand this opened into Abu XXXX, water. a pleased We've concept and quickly our restaurant

-- added focused reach DKNY, net we're to Lagerfeld, important including Karan, potential of and the pure-play Vilebrequin Karl are underpenetrated.Digital forward, Amazon consumer across outpaced there's channel. Calvin digital this XX%, rapid dedicated increased believe transition over the Donna makes They million we with have support few channel this to from These these for efforts have Hilfiger significant partners' our -- our offset core term.As sales increased Tommy helped our pure-play opportunity brands. capabilities an year we've and lifestyle our sales opportunities clear product $XXX with significant the grow business performance. focus remains and be the years, Halston further investments north moderation to on have board, they which will the grown Klein assortment next traditional long we sales an our where and now and on Pure-play share We've talent market the year. speed where put the Going made internationally, in this retail the extend expanding annual priority, platforms. at an expansion over brands channels.The Nordica, we

in have brands.We're business and business the We're build performance.In that other also to brands And businesses upgrading we business built also strategy further results. plans enhance third-party already the management segment, reducing our these programs conversion European executing websites tailored digital and portfolio brand more assortments present experience we're own third-party to to digital and and footprint a engagement, our the Our digital our on consumer changes, leveraging dropship accelerating merchandising marketplaces, include on site our provide Retail capabilities our better Retail digital we're disappointed other successful and of across were partner brand with Zalando to our the consumers. to marketplaces. store rebasing our importantly, for

beat full levels.In reduce expect losses that expectations. our our enable forward. the We to foundation earnings will laid these significantly path for XXXX ended changes fiscal quarter We've from conclusion, fourth and us our delivering we out non-GAAP year

to to retail and ahead, our experience and new merchandising and our own XXXX market.Looking design develop them relationships fiscal move optimistic best-in-class and have new to year initiatives our about launches growth with versatility, continued bring of team's quickly brands. Our we're allowed us

long-term we strategies.As in to believe will that build new operational fiscal to capabilities we've year, global deliver invest continue also will talent As we'll continue environment collections. and high-impact XXXX, consumer storytelling remain infrastructure under this to And fashion and expand invest we pressure. we momentum our brands in for to excitement, our these entered the marketing

$X.X this compared We be to a expect past over year. to net growth of billion, sales approximately X%

reflects support to range earnings on grow we objectives to culture the just long-term involve non-GAAP and identifying G-III's spoke to our brands focus return a scale, plan.We the us growth, the we our $X.XX of I clear: out financial Neal continue technology about.Our our and and to on unique our the expect operate Calvin fiscal organization in discussion confident leader position how and Hilfiger, execute Klein per as investments to which fashion.I'll for investments business believe key drive transactions a growth Tommy fourth in data our the transition shareholders. XXXX implement now across our and strong leverage and and pass full capital our provides global financial share global of outlook. as well results are of flexibility global as We I'm in efficiencies to invest leveraging invest strategic opportunistically explore while future our around to Retail as year call by $X.XX, a quarter segment growth, our in

Neal Nackman

$XXX $XXX quarter.Net for the million segment previous weather in $XXX $XX challenging significant to segment Thank year. consumer Net million warm million sales to period last were the Net were was and for year. quarter XX, you, sales were Morris. in of net headwinds fourth the $XX quarter January compared sales environment of Unseasonably million compared the our ended compared same fourth Retail million the a to Wholesale to our of $XXX sales XXXX, million.

was XXXX positively improved fourth fourth compared gross Our XX.X% compared quarter. sourcing primarily the current XX.X% fiscal XX.X% compared year's to in last from previous percentage Wholesale was costs, by margin period comparable costs of XX.X% freight the the year's the to in in previous year's to lower quarter The segment's percentage impacted margin year. gross margin was gross in quarter.The

prior fourth segment In percentage of margin was the The Operations charges million addition, gross to quarter by year.Non-GAAP approximately our quarter. the compared We actually was compared the XX.X% one-time the margin warehousing XX.X% to negatively our gross and had million. year's in last $XX strong percentage had compared in last significant demurrage impacted costs lower Retail in expenses fourth $XXX warehousing year. efficiencies year's to compared expectations SG&A prior were million in to $XXX

inventory driven and capacity and the billion from $X.X percentage XX, year's X% sales $X.XX wholesale quarter, XXXX. expenses billion per or of margins fiscal acquired per higher to for diluted expense.Now segment aligned percentage was quarter higher sales to negatively significant company. fiscal the the a impacted a inclusion margin million.Full sourcing gross in in margin for of million.Finally, review sales the operations Net prior $XXX were Lagerfeld business. ended of delevered $XX the by of the compared from percentage the Karl inclusion $X.XX to costs, increased to $X.XX full prior the by year a in warehouse full Non-GAAP increased The the the of primarily XX.X% percentage basis income billion The $XXX compared SG&A percentage of fiscal expenses $X.XX was million share this XXX last of as gross costs gross business, acquired $XXX per now approximately in the points.The Lagerfeld was XXXX. points which a year. from Operations gross the improvements a let's SG&A XX.X% the previous acquired $X.XX a fourth our sales, demurrage in Karl percentage fiscal XXXX sales result X.X% $XXX million of diluted Retail XX.X% previous per and with net of year year.Full XXXX. year. for The positively throughout our the XXXX by pressures a less Net was $XX our share net year in the compared compared interest and of percentage of business delevered or XXX result fiscal sales The last a billion, diluted XX.X% margins rest additional the diluted the in was of year. to year. planned $XXX fiscal by Operations compared million Karl improved was previous to positively for year XXXX income is well segment's the the million last as and million to decrease added XX.X% impacted or months $X.XX freight year. one-time $XXX or from million than margin Karl the inflationary compared quarter was results Retail in by margin gross expense. Net driven non-GAAP improvements charges segment SG&A compared margin XX Karl the Incremental in business net SG&A of year. The $X.XX million to result current months acquired Lagerfeld the SG&A year as share of current to was the compared our full levels.As decreased with our increase impacted for sales year's $XX percentage penetration in Wholesale Our added margin share $XX previous sales. has associated million year Lagerfeld were to fourth January year. gross compared the XX.X% the for in Lagerfeld lower or interest Non-GAAP sales for the XX% gross year prior we non-GAAP in to to percentage gross approximately incurred million segment from $XX basis is year as XX.X% expenses X were year's business

levels Inventory lower from acquisition.Turning decreased respect we to inventory inventory the the quarter carried year. over the good to at the the levels. the our $XXX Our the reflects XX% seller to related of notes for we to significant Donna We to rightsizing of our reduced with inventory had and flow last strong inventory made debt generated appropriately this previous the cash Karan as progress $XXX We pay balance from expense end year's our the progress adjusted million account higher-than-usual made from purchases on down million. income interest year sheet. interest

year. with cash net in We flows position our year. from now to year of are swing with debt a million our approximately availability and ended credit million sales.We operations, revolving the a net decrease large over levels. cash better $XXX result which had a net of a from prior cash a $XX position of the position cash levels to This debt we agreement the the after invest to of close debt under billion provide in liquidity believe the seller's us We financial This advantage growth outstanding $XXX flexibility very brands. of notes. the strategic $X opportunities future XXXX in new and our is grow million we optimistic marketplace.As continue that position at year are our as the our guidance, inventory launch net inventory fiscal and future Our under of about repayment aligned the take of our of in brands a is includes primarily for to compared owned and our

net XXXX $XX we represented sales fiscal we net brands full the basis, we of and our XXXX million XX% a million a Approximately year approximately expenses primarily from fiscal compares to talent represent $XXX includes capabilities.For approximately expand compared the Tommy between associated transition Donna remaining $XXX the they for approximately fiscal XXXX, fiscal in these In share XXXX, guidance EBITDA sales, Donna DKNY and we is This X%, the per as to the sales.On of $X.XX $XXX these happening or approximately and brands of to we to adjusted net decrease year per XXXX.Our sales $X.X Holston. of XXXX. compared and million income $XXX anticipate fiscal our expect as The quarter For X these away Karan, XXXX, approximately brands. XX% by of $XXX fiscal first expect fiscal XXXX be growth Hilfiger non-GAAP of will operational $X.XX or XX% million of upcoming million to for $XXX same initiatives. growth XXXX and in sales initiatives to in EBITDA launches of million new of net billion, sales the of related net the expected of net XX% year share. our related period the technology support Karan from Calvin $XXX when Full Nordica of adjusted and fiscal fiscal driven are Klein diluted are expenses of XXXX. continue non-GAAP and to year between and brands. This total to owned marketing income of expect $XXX with launches down to is between diluted of million $X.XX primarily expenses, incremental million million fiscal

per of $X.XX non-GAAP net We per million per first loss $X for $X to share. income between This net expect of and or $X.XX loss a million a fiscal to loss and quarter the negative a XXXX compares non-GAAP between share around for diluted some results net the breakeven be additional incremental approximately expected quarter million which $XX provide the share decrease the of XXXX.The $X.XX first or income fiscal the me quarter.Let in of driving in include is modeling. quarter's first expenses, context

will we brand sales, we to For flat outsized we the last expect year our of relatively see expand initiatives. to the half half be growth new the year, the of In first year. to second as launch continue and

XXXX similar growth first business quarter rate, XXXX. to to for make mentioned, to in year margin as to gross the SG&A, the expect of our we long several to be expected slightly year investments fiscal are I fiscal be Gross the full for margins term. the we plan As higher.Regarding support

we the marketing expect be of spring the to spend, SG&A in quarters line campaigns. and fall towards skewed marketing third the first cadence quarterly the and the spend with On

We expect million interest to full $XX for expense be approximately the year.

As our working larger in significant the second earn driven year, capital with to approximately This year, seasonal interest half increased but is principally business. new $XX fiscal better support brand our previous we we expenditures years, expect launches interest be half on compared income XXXX.In year, of of much million. higher fiscal carrying to than will than our to we of closer expense XXXX, levels.We still first the technology new continue the the benefit needs, in for to we shop-in-shops balance last expect build-outs line in a cash spend to capital the and are where into expect of our last expect year's by the

We tax a are XXXX. for estimating fiscal rate of XX.X%

not the our I concludes guidance.That back share repurchases to for my call will now remarks. have comments. potential any Morris We anticipated turn in closing

Morris Goldfarb

you success our forward and all for proud has the of their year to take joining this now questions. partners entire to thank ahead. to and some Thank many and you, the seeing also thank today. continued achieve support.Operator, the been lies organization, past able to what team we're like look ready Neal, for stakeholders I'd our I'm us all that

Operator

question Sandler. from [Operator Piper Instructions] line first of comes with the Yruma Edward Our

Edward Yruma

outerwear few on industry your for me. on clean ended you up know books. I I Obviously, A guess, first inventory.

did contribution a So do Tommy. outerwear packed or curious then year projected brands? think of the changing how will guide?And how got year and you on performance much the how and think follow-up, I'm or as you color for that and we Calvin thank time? about businesses this I to think the just of acquired about you for over kind those away, how influence relative performance do this upcoming fiscal your should the guess be that profitability fiscal of your How

Morris Goldfarb

Our at coat has core It's had really company high good have this years. of that packaway sitting really season. inventory how never have I product.The even not shape inventory, an of now basics. certain warehouses increased But it's XX We've how sitting high inventory Coats and a a that in their in been are but we inventory sits. confidence coat in is not level the to, been for again, know that can't is level is for a product. or shape. profits unseasonable we Unfortunately, assumption provide is risk. in yet do else in will We carryover, But either some had in high the coming and company industry, risk. in speak sell-through carryover the we good our in years, everybody profit inventory an to for my over I sell there reasonable business to manage

it Neal. ahead, to -- As relates go

Neal Nackman

question, second and of as past. beauties your Calvin of They've in terms of far drivers us of have owned off significantly a the impact that, and high moving business as us. Tommy our In for the and operating pay businesses royalty, the through purely be that businesses. generated a been operating Ed, income for look, us. will to one brands royalty as profitable margin strong our Calvin start, brands so addition to for profitability don't the should versus got to go transition margins Tommy, licensing business that this that we forward.In or go pay we comes a those That's that we've reduced really But is

these portfolios keep way marketing for we more the as paying have do that we have brand sort well would evolving comparable, improvement to we really margins.In both the as own we'll that been our of gross in our terms do Instead these change a is So we'll and licensor. businesses, margins we're marketing we spend the towards operating that of see spend look owned at marketing. as might

ways, some be have we'll control it. to in more So over We'll able that. direct

Of worldwide. brands, owned distribute course, we our can

the full improve slowly distribution broader to shift So addition a brands. will think of we having as we to control, the owned business base, in the margins operating

Morris Goldfarb

Let me add a that, little bit Ed. to

Our AURs owned higher brands are our generally than brands. licensed

AURs is higher We're Klein are with significantly early Our careful positioning the significantly of our out. DKNY. -- first we're higher Hilfiger.It's don't The business sell-throughs year on a We and new are significantly for Donna huge today our Karan And Calvin We're better buying better, are plan stage. margins have Tommy launch than our stellar. differently. distribution. it

servicing ability of demand high than there inventory. of year. for We that's the the the of year a demand the again, first the currently back have. at, We're of accommodate working all more don't We higher for we demand end to AURs the the much have have hard half for

Edward Yruma

been many kind brands for costs guess but of outlet high-speed owned versus kind in how me. of results of I locations? Got these flagship retail maybe of some with kind associated were other quarter follow-up much it. know problematic legacy Maybe the one I has stores years. the of soft the for business the

Morris Goldfarb

product. see of been we into next estate, it. to year. We street real business. a burdened And a any a our have we'll fleet.There's that environment We the trimmed maybe enable our sell retail believe tells And difference of that. with outlet. and still we They're locations. always real don't that fleet a Most us to significant managed us adjusting see the So the high I stores. this go sustain retail retail forward. a is retaining for feeds nonperforming get thought profit to There's need to better We're little differently at of the think time we'll really the first year, showcase corporate bit in need overhead are being stores we've stores. for

partner counts hedge. store to store in reduce need we As sector,

retail. to So at better get we need

Our universe than based of competition vertical -- -- them their and of I would guess you follow all is more business ours. much

on skewed is wholesale. Ours

with is there. for to European our as on expand footprint, fight distribution.And we retail own hard get we us better So better that, our retail

we're to in DKNY, footprints. venues and and We are in profitable opportunities those expand retail retail our Vilebrequin exploring

Operator

line of comes Our Markets. next with Owens Ashley KeyBanc from Capital question the

Ashley Owens

you you're you the in So and first, to opportunity this where then with there half are the to to about portfolio environment, lies? think driving And or if look the just on continues next the could the initiative? you specifically going how year you're guide? secondly, acceleration in confidence wholesale Or book of grow and on back just alluded and categories order looking focus the you us to products feeling most update kind do what's expand, this into the

Morris Goldfarb

hear I to Europe? question What towards was question Was your follow the end, didn't second skewed Was Europe? it Ashley, up. it back that?

Ashley Owens

those. Just opportunity you where lies and new or the most think categories products within

Morris Goldfarb

Okay.

And inferred book order in is I Karan. ago, our growing So Donna few a strong. minutes it's as

our based look to is We timing our of on accommodate are strong end business in book -- the basically year. demand. the budgets to toward the working trying service able and what are place. timing. the hard book a believe The order could We if we've the we're back got and like order There's

categories, us been, have an going a to business. in good expansion, we're good. to we're doing that's important we expanding Lagerfeld, door good sufficient middle throughout forecast stronger us very suit a we're footwear there been the tells -- unfortunately, far Karl is launch we're the ever anticipate is the Karan a of in it.So year.As turn Donna Karl careful business, and have have years, the which count exploiting. there the part can last that including few for the we're a We're it's a at unforeseen in inventory we great.So our believe to penetration -- The and out Barring that the to looking good. of into of is leads year. coat and that buying on inventory has We're -- with category Lagerfeld, have the we're there's going service We how into company, of good the reasonably really than year Everything control we're Everything bunch categories DKNY as unforeseens. been of business, us aren't separates the we business. expanding handbag Lagerfeld. additional suit separate

expanding that's one outside there's of say bit team So license generally a of our about, talk opportunity I'd good categories. lumpy is what a little deal there. we in And the business

brand our a distribution, have as Starter we We've licensing partner. have a significantly. is We added cooperation growing Starter and great with

to opportunities a time appears the that have first So in long expand. for to time

Operator

Our Wells of line next Fargo. the question Will comes Gaertner from with

Frederick Gaertner

owned as So maybe how by start you far framing could just as goes. revenue brands big your are now

Neal Nackman

We're about $X.X now on the billion at business, Will. owned

Frederick Gaertner

are or by could out now? brands where you Is parse way brand those there any

Morris Goldfarb

beginning yet. don't We Karan. we're I Donna to -- do you really can don't just ship that we tell

going brand.The successful. this -- the positioning to of the a forecasted Karan for you'll -- not seen the potential revenue to than It's We're launch think I the future. strong well. double Donna never the I understand stimulus in product It be is as even DKNY. conscious of percentage business driver. marketing this the will to be you We've and encourage the that a DKNY be the growth We're bigger the So grow year. is do Lagerfeld will growing product that's pure it digits. stores, and dollar in

brands of to forecasting And Calvin.We've Tommy going We're achievement and Calvin of in by forward but of by environment our X% we're and Tommy design and growth. we comfortable sales building delivering doing what Tommy dilution sensational major X we're our say over the with billion up growth that's categories, given So that's see going a the last in job a accommodate of of shrinking very misses and an difficult. $X.X on Calvin amazing years. we ability line about have I'd we're and owned forward. place, the top a scale

Neal Nackman

I you. We're Will, guess, let add total -- at me me it's little about a today, half the just of about let framing billion business. for $X.X bit

get the Nautica if also We've And Tommy the that Vilebrequin at the look let's of expect significant as is year. year, billion. growth, total not got which think be for I at double-digit strong we we've opportunity into $X Halston both think the we think businesses owned XX% is is new next billion. growth strong.So Donna if our we you of $X.X and I even moment, as into We next think away at all between growth to take Karl got look specifics about billion the as $X we've that about billion. called opportunity. opportunities DKNY, of We much the got Calvin business. as thing we've over could year.But into brand we've today, Karan, and $X next to you called $X Lagerfeld, of out opportunities talked also of billion. over the initiatives, on we're see about billion $X potential billion those specific opportunities, without each at $X you where We've giving replace

of in that replace And do got expect more course, order. we've of So to than plenty to it. runway we short

we're the anything, without And significant our into and hope of business if think year to bump. to showed declining we of a replace sort able last next really I this is to chunks to year projection able Tommy do really be that. that our and continue is Calvin

Morris Goldfarb

are We that All We question brands. can't forget important. on are in several licenses team our our licenses important. -- keys have owned your do

of signing that to have our one done integrating deals.We've assets that growth consider license owned opportunity Levi's that's assets of of outside great out our a going of the And other other have of into the is scale, and the companies. company. are participate might operating job We acquiring in we assets there a

same Our it -- well, our world in to in years. talent gets North our world pool, and as we're achieve being Europe in coming the just America good going the -- as

We have mission. a

we we to growth ability a internationally. time desire, positioning the in we Our nice opportunities the focused the for opportunities, on. job mission who have our our with licenses big expand capital, And never globe the We've had.Today, have are have We There didn't the are. capabilities that it's globally. done Europe is to a we there's of the place. period now we footprint, and have the that we and recognition of is

Frederick Gaertner

me. one just more Maybe for it. Got

You touched Morris. on Europe,

Just sounds curious just What's any your appetite end guys, are -- well. pretty for the what you're there pulse you and seeing performing we've for guys it the slowdown you color there, there. like heard retailer on

Morris Goldfarb

in not at scale. regardless like. of This the going appetite what slowdown to economic mind What there's with business. create way. no that's service usually well, it we're our of come implies to we in companies is we the fashion economies that early that an headwinds and look of a fashion spite the might is stage to doubt product Vogue, We're We're going we're So going for do grow. slow in down, our my grow

Operator

from Our of next the Mauricio line question UBS. comes with Serna

Mauricio Serna Vega

I just maybe reconcile. wanted to

of sales Klein Calvin Hilfiger from year, represent Tommy and would XX% the that mentioned you think down last XX% year. I roughly this

think only to I $XX you're from the license. that losing want this I -- $XXX going year, sure think are And just like Denim almost to like be by like like million implies down I driven million? make those roughly revenues

the and coming that's is then flat brands puts like that continue growing like on like because could wanted new the So if first I you that how Maybe business.And initiatives? just I give know you year-over-year. much from initiatives versus growth underway if of out gross if going [indiscernible] organically just could the you and maybe parse like like have -- this margin that several on winding just And down from you then check already lastly, to some just year. have the the the of takes us maybe you

that how maybe to there a how freight disruption, are flat -- the promotions, us Just like how margin? Sea -- what kind the things the like big are drivers of take like gross are things Red are

Neal Nackman

Maurice. Yes,

than at Yes, we year. help are in 'XX falloff to off that to some just slightly less think of 'XX, Calvin, forecasting you of Tommy about So that $XXX math. what work you previous looking from look million the fell business. at out That's I the we're if in

in of the portfolio hit up So think split new is obviously, about $XXX and initiatives terms evenly performing.In that that growth $XXX going you fairly That we're the to of business about between million. flat growth rest on I the margin That be we're the current the the means gross million. is it the on percentage, growth head.

that become Sea. bit our We We Hopefully, the too it It impacted just us of for about impacted it yet little are has already. will has which a a us. not distribution, Red a that concerned outside of anticipate do doesn't little great. European headwind be bit

result While this with current gross margin plan of kind has pretty being that environment. in pleased flat, we're

Operator

question of next Kloppenburg Associates. Janet will from the JJK come line with Research

Janet Kloppenburg

a on little got bit I late, Morris.

So wondered that and Macy's I'm guidance store X have to if your we drag effect close if what the expect to is and what you thinking next contribution? the business the years in in that's your ansking as I new were I a of But Karan, because closings discussed, apologize. respect the embedded question which may the stores.And of by planned for asked should you that on year I or with was way, wondered beautiful investments if XXX this be Donna the they going roughly marketing on earnings that launch been

Morris Goldfarb

by event ] for first. There with [ the data we very question campaign. the well excited campaign. We've We're Thanks was by Magazine got Let it. the noticing recognized. an West for me the deal been celebrated that Coast on just Tom

and I the out his lot like Trey to have success of wonderful a work done to I'd has to attribute talent. all the we Laird think call for

Janet Kloppenburg

is was I Trey. didn't it fantastic. know He

Morris Goldfarb

which took best also we what our own the there, Trey the it the team that models, whether best trust done. ] could of that was his for they've brain get, is the recognition We and the and get [ there photographer, out team, should

It's and a be drag disproportionate positioning show. XX the advertising will XX years. years, purchases. not year. described. We're and -- I spending the to of next X-year we're We're for of just the we'll another hopefully, So dividends a be everything the will pay brand And campaign future. for a here amount media -- on and It money over we're because here the it

shut investment good only we're but We're remaining question the the XX% fairly play XX% door of approximately around as projected believe in possibility their smaller time, grow, projecting looking we And will are there's We're projected their guess. X% Macy's, role count important door is that penetrate on door So we in I to XXX the to to can future.As count of believe further don't year. with count doors your doors. the growth, Macy's can't decrease.But And comfortable should doors dollar at this nothing door value as says is that has aggressive, the they smaller the said, within that's over they're the dilution an will be -- -- sales. fiscal and a a I well.

important business, it -- great, we are would understand Macy's. We Fashion us. we the be is than significant a to represent concern who fast say not for the and and it's I'd brands Our a I to accommodate the Macy's. not We very business. needs of Macy's major understand of for are just Macy's in better anybody share world. brands, Cooperation how the for we

Janet Kloppenburg

it squeeze could in. I if question, more One

'XX wonder opportunity we your the through how On And share. as 'XX. very there are the to seem contrary, be retailers off-price I you doing well, taking market view move and

Morris Goldfarb

channel. respect off-price We the

part And the growth and channel, are look the to them it. we our we they are distribution. collectively significance to brands potential. brands protect for appropriate We've choose important we off-price seen We've know We of as very are choose know the us. Yet we We in to the we embarrassed moving brands, the been that its them. needed service by business. been it. it. enabler for when our help It's stores don't by for product of in as well they it. to they specific piece And not We us. being do do get way us We're underplay as of product. essential They've an department them

like off-price the So we business.

Operator

question next of comes line with Corney Paul from the Barclays.

Paul Kearney

the next company whether about has As initiatives you to of with the operational bringing building it's XX the grow off digital regional brands, the a the owned to improve come some talk capabilities? on can in years, changes, investing capabilities the business for licenses owned marketing expertise the and need in or platform,

Morris Goldfarb

profitable. we not grow. written It's to to that and be It's things. have more that written we X profitable Well, have

and smaller can significantly we we better business accommodate with paramount. a the run margins that profitability have as concern So

not is any a key don't longer top line-driven tools Key -- We going no need more focus. profitability.The it's we're So have. to as we be we need, company a be to focus going that tools.

capabilities. transitioned We from the have Tommy, hire will maybe talent to our carries them brand.So them operating there's into the the which to don't key. flag in integrate our We're market, G-III here, G-III, that are Most G-III, individual entire train wonderful. are data go absolutely we logistics Calvin and out are Technology is they team and best of a going on optimize the We to and the is enhancing our the of have culture. here an not owned into industry, in those our brands, working company. people platforms. world, people, in They be

targeted a it. space we're we weaknesses capital part it And have investing It's got and that's months. of this media some Europe, have be this it again, it going and that X talent. projecting from seeing. anything. We're -- in coming Europe not in that We be sustain a is company all. And It's need in there'll up, and in the a I expense the the don't company. that base We And what out you're have shoring to we're investing we're think We've will start-up we support year. spend of not there. towards

Operator

Group. of Our Telsey will from Rob line with question final Rosenhaus come the the

Robert Rosenhaus

and the for has right there, recent We see owned into maybe deeper you can recent dive times current big go-forward time the or of focus domestic touched with secondly, bit profile opportunity focus in the there question on last business guys the on about with the and it of been environment the versus of part now talk and do interest a little of a couple what here, on hands have you but business?And anything quarters profitability years. brand looks the is you kind then abroad Is portfolio full Obviously, what penetration the just current your in just one the the being? like M&A. international increased particularly a maybe business the on

Morris Goldfarb

we So Yes, last Europe. lot I'll that I guess a first. question are like there in answer your opportunities

or not We we it, bet diligence, get we have identified an a there's opportunity do at new. out some. for European entire investment acquisition it Lagerfeld carefully. far as it our do accomplished took We're and company. again, the an working eventually bought we an hand. there's our good initiatives, is as We a Hopefully, started that opportunity stake company. through soon.As European North equity And this on America

So European in the the ship. is Europe, and origins are steer kind they of the the and sits company operating European, heritage really

to never acquainted there's an North getting to the We're it Lagerfeld. to need down the So our there going them with the No talented what arms we're and future the business invest going that's hasn't in time around We a with spearheading the significant growth road.There's America. extremely investment management. happened European in Lagerfeld wrapped changes our with of in relationship is group had be get of what's now. for needed, made been

So born out a brand Saint-Tropez, the international of American transition piece.And and years, And the making by in didn't Paris. investment Geneva in again, again, same the time Vilebrequin growth European the Vilebrequin, a in Vilebrequin. piece lives really feature. spearheaded of we're the complicate for the first or group the is significant acquisition and of

we that's side And in beach I We we've middle our there we're finding the deals we're distribution it so on but have of food signing like it company to profitability grow. me franchise companies our beverage, doesn't extremely line more that many line grow bottom are and -- licensing contributes think DKNY side impact to going to more when clubs that not life. touch opportunities than it growth. necessarily top to.So of, constitute that line to the DKNY. in the the operating than brand that was that don't and believe top the will brands, got on the bought always let initiatives want European I talented use open was It's again, American. of And because we and side.

of brand, what's is DKNY. an fill. a serious essential that So we the at bringing based it's And for in calls in that spent this the the we're now lot and an of Karan, for the brand world.So There's sell-throughs we've which to shoring future retail everywhere a to redoing We're And for stay. here time evaluating the here to We're we've we showrooms. we haven't grow. I phone of broached on had we're entity. seen can, anywhere even think We've Donna for brand time and knowledge try that G-III. There's that to that the proved up in campaign Europe on appetite -- out exciting will. period -- appetite we're And world. newcomer, opportunity a in that we which haven't for to the going or else there's life

We're good G-III. feeling to good times a it's So for be. place the about

Operator

turn closing over our remarks. for concludes this management the And Q&A I'll call back to portion.

Morris Goldfarb

Thank we June. and and you you. enjoy you speaking season, interest, to to spring Thank in we forward hope the you all look for your

Operator

conference This concludes your call. Thank today's you for participation.

You may wonderful disconnect. now Everyone, day. have a

G-III Apparel (GIII) 14 Mar 242024 Q4 Earnings call transcript