Shares of G-III Apparel (NASDAQ:GIII) have popped today, up by 12% as of 1 p.m. EDT, after the company reported first-quarter earnings. The apparel specialist also said it would restructure its retail operations.
Revenue in the fiscal first quarter came in at $405.1 million, missing the consensus estimate of $407.8 million in sales. That translated into an adjusted net loss of $36 million, or $0.75 per share. Analysts were expecting the apparel maker to lose $0.67 per share on an adjusted basis.
"We took proactive steps in response to the COVID-19 outbreak," CEO Morris Goldfarb said in a statement. "We reduced our inventory exposure, furloughed a large portion of our employee base and implemented significant temporary reductions in pay for our senior management and employees."
G-III is not providing any guidance due to macroeconomic risks related to the coronavirus outbreak. However, investors cheered the company's efforts to cut costs by restructuring its retail segment. G-III will close 110 Wilsons Leather and 89 G.H. Bass locations, hiring Hilco Global to assist in liquidating the stores.
Goldfarb believes that the move will allow G-III to reduce its losses while shifting focus to the company's wholesale business, which generated $2.9 billion in net sales last fiscal year. "Our wholesale business, anchored by our five global power brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld, will continue to be the primary growth and profit engine for the Company," the chief executive added.
G-III expects to incur $100 million in restructuring charges related to lease terminations, severance costs, and other related expenses.