G-III Apparel Expects Fall In Q2 Profit, Backs Annual Sales View; Sees Add. $135 Mln Tariff Expenses

G-III Apparel Group anticipates a decline in Q2 fiscal 2026 earnings to $1-6 million ($0.02-0.12 per share) and sales to approximately $570 million, down from $24.2 million ($0.53 per share) and $644.8 million, respectively, in the prior year period, citing supply chain disruptions and program timing shifts. Due to tariff uncertainties and macroeconomic conditions, the company has withdrawn its full-year earnings outlook but reaffirmed its sales guidance of approximately $3.14 billion. The company expects $135 million in additional expenses from tariffs on goods imported into the U.S., which it intends to offset through various cost-saving measures.

Analysis

G-III Apparel Group (GII) has issued a notably cautious outlook, forecasting a significant decline in its second-quarter fiscal 2026 financial performance. The company expects net income to plummet to between $1 million and $6 million, or $0.02 to $0.12 per share, compared to $24.2 million, or $0.53 per share, in the prior-year period. Similarly, second-quarter sales are projected to decrease to approximately $570 million from $644.8 million. These anticipated downturns are attributed to ongoing supply chain challenges and the strategic shifting of certain program timings into the second half of the fiscal year. Significantly, G-III has withdrawn its full-year fiscal 2026 earnings guidance, previously announced on March 13, citing substantial uncertainty related to tariffs and prevailing macroeconomic conditions. While the company reaffirmed its full-year sales guidance at approximately $3.14 billion, this figure still represents a decline from the $3.18 billion recorded in fiscal 2025. Furthermore, G-III anticipates an additional $135 million in unmitigated tariff-related costs on U.S. imports, predominantly impacting the second half of the year, which it aims to offset through sourcing diversification, vendor discounts, selective price increases, and other cost-saving initiatives.

Key Decisions for Investors

• Given the projected sharp decline in Q2 fiscal 2026 earnings and sales, coupled with the withdrawal of the full-year earnings outlook due to tariff and macroeconomic uncertainties, investors should adopt a cautious stance towards G-III Apparel Group.
• Closely monitor the company's ability to effectively implement its stated mitigation strategies—including sourcing diversification, vendor discounts, and selective price increases—to offset the anticipated $135 million impact from tariffs, as this will be crucial for second-half profitability.
• Consider the heightened risk profile associated with GII due to ongoing supply chain disruptions, the direct financial impact of tariffs, and reduced earnings visibility, even as the company reaffirms a slightly lower full-year sales forecast.