G-III’s fourth quarter was marked by a notable revenue shortfall and a sharp contraction in operating margin, prompting a significant negative market reaction. Management attributed the revenue decline primarily to the exit of its Calvin Klein and Tommy Hilfiger licenses and a one-time hit from the Saks bankruptcy, which led to an unplanned bad debt expense. CEO Morris Goldfarb described the environment as “highly dynamic” and emphasized the company’s ongoing transition toward prioritizing its owned brands and navigating cost pressures, including tariffs and evolving retail conditions.
Is now the time to buy GIII? Find out in our full research report (it’s free for active Edge members).
G-III (GIII) Q4 CY2025 Highlights:
- Revenue: $771.5 million vs analyst estimates of $792 million (8.1% year-on-year decline, 2.6% miss)
- Adjusted EPS: $0.30 vs analyst expectations of $0.59 (49% miss)
- Adjusted EBITDA: $25.71 million vs analyst estimates of $46.13 million (3.3% margin, 44.3% miss)
- Adjusted EPS guidance for the upcoming financial year 2027 is $2.05 at the midpoint, missing analyst estimates by 30%
- EBITDA guidance for the upcoming financial year 2027 is $160 million at the midpoint, below analyst estimates of $214.2 million
- Operating Margin: -3.8%, down from 8.5% in the same quarter last year
- Locations: 48 at quarter end, down from 49 in the same quarter last year
- Market Capitalization: $1.10 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From G-III’s Q4 Earnings Call
- Robert Drbul (BTIG, LLC) asked about the visibility and order books for own brands as legacy licenses wind down. CEO Morris Goldfarb highlighted strong demand, increased points of sale for key brands, and a conscious effort to manage inventory levels to support full-price selling and protect premium positioning.
- Drbul (BTIG, LLC) also inquired about the progress of the Converse launch. Goldfarb explained that the brand is gaining traction, but ultimate growth is contingent on the licensor, Nike, setting and supporting the global brand strategy.
- Ashley Owens (KBCM) questioned the prioritization of acquisitions versus new licensing opportunities given G-III’s strong balance sheet. Goldfarb said both are actively pursued, with the decision determined by market opportunity rather than preference, and reinforced the company’s ability to manage either path.
- Owens (KBCM) asked which category expansions are furthest along in becoming meaningful revenue contributors. Goldfarb pointed to hospitality for Karl Lagerfeld and Vilebrequin, and consumer product expansion and new licensing markets for DKNY.
- Mauricio Serna (UBS) sought clarification on the growth outlook for owned brands versus licensed brands. CFO Neal Nackman confirmed that high single-digit growth is expected across the go-forward portfolio, with owned brands leading and recent licenses contributing incrementally.
Catalysts in Upcoming Quarters
Over the next few quarters, the StockStory team will be monitoring (1) the pace and sustainability of own brand growth as new points of sale and international markets are added, (2) the realization of planned gross margin improvements as the business mix shifts and tariff mitigation takes effect, and (3) the ability to control SG&A expenses in light of increased marketing and technology investment. The impact of cost-saving programs and progress in digital and direct-to-consumer channels will also be key indicators of execution.
G-III currently trades at $26.44, down from $29.57 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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