Shares of G-III Apparel Group, Ltd. (NASDAQ:GIII) were heading lower Thursday after the owner of brands like Donna Karan, Vilebrequin, and Andrew Marc offered disappointing guidance in its fourth-quarter earnings report. As a result, shares of the diversified apparel specialist were down 11.8% as of 2:41 p.m EDT.
G-III said overall revenue increased 18.5% in the quarter to $714.9 million, assisted by its acquisition last year of Donna Karan and topping estimates at $708 million. The wholesale side of the business remained strong, while it saw revenue declines in its legacy retail segment. On the bottom line, G-III posted adjusted earnings per share of $0.26, up from a loss of $0.16 the year before, which beat estimates at $0.17.
CEO Morris Goldfarb said, "We are pleased to have finished with better results than last year, particularly as a result of our power brands: Calvin Klein, Tommy Hilfiger, DKNY, Donna Karan and Karl Lagerfeld Paris. The strength of these businesses is enabling us to grow profitably despite the pressures of a persistently challenging environment."
In spite of the strong quarter, the stock fell due on weak guidance due in part to the bankruptcy of department-store chain Bon-Ton Stores, which is expected to cost G-III $100 million in sales. For fiscal 2019, the company forecasts revenue of about $2.94 billion, up from $2.81 billion last year and compared to estimates at $3.09 billion. On the bottom line, it expects adjusted earnings per share of $1.98 to $2.08, up from $1.60 last year but below analyst consensus at $2.13.
Goldfarb said the company is "focused on improving the results of our specialty retail operations," as the retail division seems to be weighing on overall performance. Still, the company expects to deliver strong earnings growth, which has been a challenge for many apparel retailers in today's environment.