G-III Apparel Group has reported a drop in profit in the third quarter of the year amid logistical issues at its distribution centers.
The Nasdaq-listed group posted net profit of 61.1 million dollars in the three months to October 31, down from 106.7 million dollars a year earlier.
Chief executive Morris Goldfarb said higher inventory levels in the quarter led to “logistical challenges” at the group’s distribution centers which resulted in significant one-time charges and a hit to the bottom line.
But he hailed the group’s revenue growth during the period, which was up 6.2 percent to 1.08 billion dollars and in line with expectations.
In June, G-III completed its acquisition of the namesake brand of the late Karl Lagerfeld. The group’s portfolio also includes brands DKNY and Donna Karan.
Looking ahead, the company said it expects to feel the impact of inflationary pressure on consumers and incremental costs associated with the supply chain conditions.
G-III reiterated its guidance of full-year net sales of approximately 3.15 billion dollars, but now expects net income of between 147 million dollars and 152 million dollars, down from its previous guidance of between 182 million dollars and 187 million dollars.
Goldfarb said the group is “actively pursuing a number of near-term growth initiatives across our current owned and licensed brands, as well as private label, including category, geographic and digital expansion”.
He added: “We are also directing resources toward new growth areas, including further leaning into building our own brands, broadening our European business, developing new licensing opportunities and continuing to acquire new businesses.”
G-III also announced this week it has extended its licence agreements with PVH brands Calvin Klein and Tommy Hilfiger from 2023 to 2025.