G-III Apparel released second-quarter fiscal 2027 results on September 2, one day after completing its acquisition of Marc Jacobs on September 1. The company is transitioning away from its longtime licenses for Calvin Klein and Tommy Hilfiger, owned by PVH, and shifting toward brands it controls directly.
Net sales declined 10% to $554.1 million from $613.3 million in the prior-year quarter, aligning with management’s expectations given the exit from the two licensed brands. However, gross margin expanded significantly to 45.2% from 40.8%, driven by pricing actions, increased full-price selling, and a favorable mix shift away from licensed labels. Non-GAAP earnings of $0.26 per share exceeded guidance. Full-price wholesale sales for the company’s forward-looking portfolio rose more than 20% during the quarter, with that portfolio growing in the high single digits independently.
Donna Karan and DKNY are leading the revenue replacement effort, with Donna Karan sales jumping more than 45% in the quarter. DKNY’s digital channel grew in the mid-20% range while comparable store sales grew in the mid-single digits. Marc Jacobs, now fully owned by G-III, is projected to generate $360 million in sales for the remainder of fiscal 2027, with a long-term revenue target of $1 billion as the company expands into ready-to-wear categories beyond its current handbag and accessories focus, which represents roughly 90% of current revenue. Of the $1.2 billion in revenue expected to be lost from the PVH license exits by year-end, the company has already replaced $700 million at higher margins.
The company issued full-year net sales guidance of $2.71 billion, down approximately 8%, reflecting an estimated $460 million impact from the exiting licenses only partially offset by growth from owned brands. Third-quarter guidance called for net sales of approximately $870 million compared to $989 million in the prior year, with non-GAAP earnings guidance of $1.35 to $1.45 per share versus $1.90 the prior year. Adjusted EBITDA guidance of $174 million to $178 million fell below the prior year’s $192.4 million. Europe faced headwinds from reduced traffic attributed to record warm temperatures and fewer Middle Eastern tourists visiting shopping destinations. Marc Jacobs is expected to be earnings-dilutive through its first 12 months of ownership, with the benefit expected to emerge in future periods.
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