G-III reports a profit of USD43.6 million

For the period ended Oct. 31, G-III reported a profit of $43.6 million (over Rs 226 crores), up from $42.7 million (Rs 221 crores) a year earlier. In words of the company, its profit edged higher in its fiscal third quarter, aided by stronger sales.

The results beat Wall Street expectations and its shares jumped more than 21per cent in aftermarket trading.

G-III Apparel Group Ltd.'s (GIII) fiscal third-quarter profit edged up a lower-than-expected 2 per cent as promotions and bad weather weakened the apparel maker's margins, reported the Wall Street Journal. G-III cut its full-year earnings guidance by 55 cents a share, to a range of $2.50 to $2.60 a share, while maintaining a revenue target of about $1.25 billion (Rs 6,491 crores).

"Our lower gross margin percentage in the third quarter reflected our higher costs and the promotional environment," Goldfarb said. "We expect these trends to continue to impact us in the fourth quarter." Chairman and Chief Executive Morris Goldfarb said the company had to use promotional strategies in the latest quarter to boost sales -- which exceeded the company's guidance -- given challenging market and weather conditions.

At the same time, the company unveiled a new deal with PVH Corp.'s (PVH) Calvin Klein to open women's sports apparel stores in the U.S. and China, building on deal signed in 2007 for the clothing line's wholesale wares. Terms of the latest deal were not disclosed. G-III, which makes licensed apparel for professional sports teams as well as brands such as Calvin Klein and Tommy Hilfiger, has seen rising materials costs continue to pressure its margins. In response, the company has bought some goods sooner to take advantage of lower prices.

Shares were halted after hours after closing at $20.36 Wednesday. The stock is off 42% this year.. On a per-share basis, the company earned $2.16, unchanged from the prior-year quarter. Revenue grew to 13 percent to $510 million (Rs 2,648 crores) from $450 million (Rs 2,337 crores) in the third quarter last year. Analysts' consensus forecast called for earnings of $2.12 on $497.5 million (about Rs 2,581 crores) in revenue, according to FactSet.

Management noted that challenging market conditions led the company to ramp up promotions during the quarter, which led to higher costs and lower profit margins. On the bright side, the company expects to see a positive impact next year from several growth initiatives, including the development of its handbag and luggage business, the addition of Kensie sportswear and the expansion of its license with the NFL.

G-III Apparel lowered its earnings per share outlook for the year ending Jan. 31 to a range of $2.50 to $2.60, down from an earlier estimate of earnings per share between $3.05 and $3.15. The company expects revenue will be $1.25 billion (Rs 5000 crores). Analysts are anticipating earnings of $2.78 per share on $1.23 billion (Rs 6,491 crores) in revenue.