G-III Apparel Group (NASDAQ:GIII) executives said fiscal 2026 marked a “pivotal year” in the company’s portfolio transition, as it continues to exit its Calvin Klein and Tommy Hilfiger licensed businesses while leaning more heavily into owned brands such as DKNY, Donna Karan, Karl Lagerfeld and Vilebrequin.
On the company’s fiscal fourth-quarter earnings call, Chairman and CEO Morris Goldfarb and CFO Neal Nackman emphasized progress in shifting distribution toward higher full-price selling, investing in marketing and infrastructure, and maintaining a strong balance sheet, while also detailing a significant earnings headwind tied to the Saks bankruptcy.
Quarter and full-year results reflect licensing transition and Saks impact
Non-GAAP earnings were $0.30 per diluted share for the quarter, compared with $1.20 in the prior-year period. Management attributed a major portion of the decline to an approximate $17.5 million bad debt expense related to the Saks bankruptcy, which the company said reduced earnings by $0.30 per share. Nackman said that excluding the Saks-related charge, fourth-quarter results would have been ahead of internal expectations.
For fiscal 2026, G-III reported net sales of $2.96 billion, down from $3.18 billion in the prior year. Non-GAAP earnings were $2.61 per diluted share, down from $4.42 in fiscal 2025. Goldfarb said full-year EPS would have exceeded the high end of guidance excluding the Saks impact.
Wholesale segment sales were $737 million in the quarter and $2.87 billion for the year, with the full-year decline driven primarily by a $254 million decrease in the Calvin Klein and Tommy Hilfiger businesses. Retail segment sales rose to $63 million for the quarter (from $56 million a year ago) and increased to $186 million for the year (from $166 million), which management said was driven by owned digital growth, particularly donnakaran.com.
Margins, tariffs, and operating expenses
Gross margin in the fourth quarter was 37%, compared to 39.5% a year earlier. Nackman said the quarter reflected the largest tariff impact of the year, partially offset by a favorable mix shift toward more full-price sales. For the full year, gross margin was 39.4%, compared with 40.8% in the prior year, reflecting approximately $65 million of unmitigated tariff impact. Despite the decline, management said margins came in ahead of expectations due to higher full-price selling and a more balanced distribution mix with less off-price penetration.
Non-GAAP SG&A expenses were $260 million in the fourth quarter, up from $244 million a year ago, driven by the Saks-related bad debt expense. Full-year non-GAAP SG&A was $975 million, or 33% of sales, compared with $968 million, or 30.4% of sales, in the prior year. Management said it continues to invest in infrastructure, technology, talent, and marketing, while also tightening expense control outside of the unplanned bad debt charge.
Owned brands: growth, distribution expansion, and marketing
Goldfarb said the company’s key owned brands (DKNY, Donna Karan, Karl Lagerfeld and Vilebrequin) collectively delivered mid-single-digit growth in fiscal 2026 and accounted for close to 60% of revenue, up from roughly 50% the prior year. He cited improving “quality of revenue,” higher full-price sell-through, and increasing global relevance.
- Donna Karan: Management said the brand delivered approximately 40% growth in fiscal 2026, supported by healthy average unit retails and sell-through. The company ended the year with roughly 1,900 points of sale and expects an additional 400 for fall. Sales on donnakaran.com grew close to 170%, driven by more than 120% traffic growth; repeat customers represented close to 20% of sales, and the company said it acquired nearly 100,000 new customers. Goldfarb also noted fragrance grew approximately 20%, led by Cashmere Mist.
- Karl Lagerfeld: The brand grew high single digits in fiscal 2026, with North America sales up high teens. The company said it expanded to roughly 3,000 points of sale in North America, with more than 300 new points expected by fall. Management cited positive comp sales increases across stores and e-commerce and said karl.com grew over 20%. Karl Lagerfeld Jeans grew 30% for the year. Executives also said the brand generated approximately $630 million in reported net sales and over $1.7 billion in global retail sales.
- DKNY: Management said it has been refining distribution to drive more full-price sales. In North America, the direct-to-consumer business improved, with stores and dot-com delivering double-digit comp growth. dkny.com sales increased approximately 40% for the year. The company highlighted marketing campaigns featuring Lila Moss and Hailey Bieber and said social engagement rose nearly 300% year-over-year. DKNY generated approximately $650 million in reported net sales and over $2.4 billion in global retail sales.
- Vilebrequin: The brand delivered low single-digit sales growth despite a challenging European backdrop. Executives pointed to higher average unit retails and continued momentum in digital, as well as hospitality expansion, including an additional beach operation in Oman and a rooftop restaurant in Miami expected to open in the coming weeks.
During Q&A, Goldfarb said the company is “really comfortable” with owned brand demand and is tempering inventory levels as it reduces off-price exposure. He also said growth is coming from outside the U.S. “for the first time,” adding that Donna Karan has limited non-fragrance presence internationally today but is expected to expand globally in coming months. Goldfarb also described marketing spend as “fairly aggressive” to support owned brand growth.
Licensing: new additions and PVH roll-off
Management reiterated that licensed brands remain an important pillar, with a focus on contemporary fashion and sports lifestyle categories. Goldfarb highlighted Team Sports, led by Starter, and said the addition of Converse, launched in the second half of fiscal 2026, contributed to top-line sales. The company said this portfolio represented more than $130 million in net sales in fiscal 2026, with a longer-term path to $500 million.
In contemporary fashion, the company said BCBG, launched for fall 2025, is performing well and expanding door counts. Nackman also noted a new licensing agreement signed in January for French Connection to design and distribute women’s and men’s apparel and select accessories in North America, which is expected to contribute revenue beginning in fiscal 2027.
For the expiring Calvin Klein and Tommy Hilfiger licenses, management said fiscal 2026 revenue was approximately $830 million, with an expectation of approximately $360 million in fiscal 2027 before rolling off in fiscal 2028.
Asked about Converse, Goldfarb said there is “an appetite for the brand” and noted the company’s ability to expand beyond North America, while also emphasizing that brand direction depends on Nike as licensor.
Balance sheet, cost savings, and fiscal 2027 outlook
G-III ended fiscal 2026 with $407 million in cash and more than $900 million in total liquidity. Inventories were down 4% year-over-year to $460 million, with unit decreases down high single digits. The company said it returned over $50 million to shareholders through share repurchases and a new cash dividend, which it initiated in December.
Looking ahead, management guided to fiscal 2027 net sales of approximately $2.71 billion, reflecting about a $470 million reduction from expiring Calvin Klein and Tommy Hilfiger volume, partially offset by expected high single-digit growth in the go-forward portfolio. Non-GAAP earnings per diluted share are expected to be between $2.00 and $2.10, with adjusted EBITDA expected between $158 million and $162 million.
For the first quarter of fiscal 2027, the company expects net sales of approximately $530 million and a non-GAAP net loss of $13 million to $18 million, or $0.30 to $0.40 per share, citing higher marketing spend timing. Nackman said guidance reflects tariff rates effective prior to a recent Supreme Court ruling and assumes recent 2025 IEPA trade policies, without anticipating tariff policy changes or refunds.
Management said it has identified $25 million of cost savings expected to be realized on a run-rate basis in fiscal 2028, spanning supply chain, organizational structure, and discretionary expenses.
About G-III Apparel Group (NASDAQ:GIII)
G-III Apparel Group, Ltd. is a global fashion company engaged in the design, sourcing, marketing and distribution of women’s and men’s apparel, outerwear, footwear, handbags and fashion accessories. Founded in 1956 and headquartered in New York City, the company has grown from an importer of ladies’ apparel into a diversified apparel business with a portfolio of owned and licensed brands.
The company’s product offerings span a broad spectrum of price points and styles, including formal and casual outerwear, sportswear, performance wear and contemporary fashion.
