GIII's Q2 Earnings Beat, FY26 Sales View Trimmed Amid Tariff Headwinds

G-III Apparel Group, Ltd. GIII has reported second-quarter fiscal 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. However, the company’s net sales and earnings decreased year over year. The company updated its fiscal 2026 guidance to reflect macroeconomic conditions, cautious retailer outlook and tariff impacts. Tariff pressures are being addressed through vendor participation, sourcing shifts and targeted price increases. G-III Apparel highlighted its strong balance sheet and flexible business model as key strengths to support brand investments and long-term growth.G-III Apparel Group, LTD. Price, Consensus and EPS Surprise G-III Apparel Group, LTD. price-consensus-eps-surprise-chart | G-III Apparel Group, LTD. QuoteMore on GIII's Q2 ResultsAdjusted earnings per share (EPS) of 25 cents beat the Zacks Consensus Estimate of 10 cents. However, the figure decreased 51.9% from the year-earlier quarter’s adjusted EPS of 52 cents. Net sales decreased 4.9% year over year to $613.3 million but beat the consensus estimate of $570 million.Insight Into G-III Apparel's Margins & ExpensesGross profit decreased 9.2% year over year to $250.5 million in the fiscal second quarter. We note that the gross margin declined 200 basis points (bps) year over year to 40.8%.SG&A expenses declined 1% year over year to $226.8 million. As a percentage of net sales, this metric increased 150 bps year over year to 37%.Adjusted EBITDA declined 46.3% year over year to $23.3 million. We note that the adjusted EBITDA margin declined 320 bps year over year to 3.8% in the quarter under review.GIII’s Financial Snapshot: Cash, Debt & Equity OverviewG-III Apparel ended the fiscal second quarter with cash and cash equivalents of $301.8 million and total debt of $15.5 million. Total stockholders’ equity was $1.71 billion. Inventory increased 4.8% year over year to $639.8 million at the end of the quarter.The company repurchased 1,140,988 shares for $24.6 million during the fiscal second quarter.G-III Apparel’s FY26 GuidanceFor fiscal 2026, net sales are expected to be approximately $3.02 billion compared with $3.18 billion in fiscal 2025. This marks a downward revision from the prior guidance of $3.14 billion, indicating a more cautious stance from retail partners and the impact of tariffs. Management continues to anticipate that growth will be more heavily weighted toward the second half of the year.Based on current tariff rates, the company anticipates a total incremental tariff cost of approximately $155 million for fiscal 2026. About half of this impact has been mitigated through vendor participation, strategic sourcing shifts and targeted price increases. The remaining $75 million unmitigated impact is reflected in the fiscal 2026 guidance and expected to be primarily weighted to the second half of the year.For the full year, net income is anticipated to be between $112 million and $122 million compared with $193.6 million in fiscal 2025. Adjusted net income is expected to be between $113 million and $123 million compared with $203.6 million in the prior year.Earnings per share are estimated to be between $2.53 and $2.73 compared with $4.20 in fiscal 2025. Adjusted earnings per share are expected to be between $2.55 and $2.75 compared with $4.42 in the prior year. Adjusted EBITDA for fiscal 2026 is expected to be between $198 million and $208 million compared with $325.9 million in fiscal 2025.GIII Stock Past Three-Month PerformanceImage Source: Zacks Investment ResearchGIII’s Q3 OutlookNet sales for the third quarter of fiscal 2026 are anticipated to be approximately $1.01 billion compared with $1.09 billion in the prior-year quarter. Gross margins are expected to be pressured by tariffs but partially offset by vendor participation, sourcing shifts and targeted price increases.Net income for the fiscal third quarter is expected to be between $62 million and $72 million, or in the range of $1.43-$1.63 per share. This compares with $114.8 million, or $2.55 per share, in the third quarter of fiscal 2025.Shares of this Zacks Rank #3 (Hold) company have lost 2% in the past three months compared with the industry’s 12.7% decline.Key PicksSome better-ranked stocks are Levi Strauss & Co. LEVI, Genesco Inc. GCO and The TJX Companies, Inc. TJX.Levi Strauss designs and markets jeans, casual wear and related accessories. It sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Levi Strauss’ current financial-year earnings indicates growth of 4% from the year-ago actual. LEVI delivered a trailing four-quarter average earnings surprise of 25.9%.Genesco is a Nashville-based specialty retail and branded company that sells footwear and accessories in retail stores. It currently sports a Zacks Rank of 1.The Zacks Consensus Estimate for GCO’s fiscal 2026 earnings and sales implies growth of 67% and 3.7%, respectively, from the year-ago actuals. Genesco delivered a trailing four-quarter average earnings surprise of 28.1%.The TJX Companies is a leading off-price retailer of apparel and home fashions. It carries a Zacks Rank #2 (Buy) at present.The Zacks Consensus Estimate for The TJX Companies’ current fiscal-year earnings and sales indicates growth of 7% and 5.4%, respectively, from the year-ago actuals. 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Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The TJX Companies, Inc. (TJX): Free Stock Analysis Report Genesco Inc. (GCO): Free Stock Analysis Report G-III Apparel Group, LTD. (GIII): Free Stock Analysis Report Levi Strauss & Co. (LEVI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks