Shares of G-III Apparel Group (NASDAQ:GIII), whose portfolio includes iconic brands like Calvin Klein and Tommy Hilfiger, popped on Monday after the company announced financial results for the first quarter of its fiscal 2022 and issued guidance for the remainder of the year. The market liked these developments and, as a result, the stock was up 7% as of noon EDT. It had been up 14% earlier in the session.
G-III's fiscal quarter covered February through the end of April. During Q1, the company's net sales grew 28.3% year over year to almost $520 million. While that double-digit growth rate looks impressive on the surface, investors should remember that this was an easy comparison. Last year, G-III's sales fell 36%. Therefore, looking back two years, the company's sales still haven't fully recovered. Two years ago, it had first-quarter net sales of almost $634 million.
That said, not all of G-III's decline in sales is due to the COVID-19 pandemic. Last year, the company decided to restructure its business, resulting in the closure of 200 stores for its Wilsons Leather and G.H. Bass brands. So some of its sales are down because of this. There was also around $100 million in expenses related to this restructuring. However, in Q1, G-III got back to profitability, with $26 million in net income. This certainly has the market reacting positively today.
The market was also likely encouraged by G-III's forward guidance. For its full fiscal 2022, the company expects revenue of $2.57 billion and earnings of $2.60 per share to $2.70 per share. Management said that its guidance assumes brick-and-mortar stores won't face new restrictions from the COVID-19 pandemic. Considering vaccinations are on the rise, this seems like a reasonable assumption. Therefore, I'd say investors should expect this apparel stock to achieve its guidance for the year.