G-III Apparel Group (GIII 20.05, -2.87) is down 12.4% after missing fourth quarter estimates and guiding below market expectations. Including today's decline, the stock is down 32.2% for the year, trading at levels not seen since April 2013.
The apparel company reported a wider than expected loss of $0.16 per share on a 14.4% year-over-year increase in revenue to $603.30 million, which was also shy of expectations.
Gross margin declined to 32.8% from 33.9% one year ago.
G-III's revenue increase was driven by strength in the non-outerwear wholesale business, new product launches, and the inclusion of $29.00 million of net sales generated by the DKI business in the last two months of the quarter. This growth was partially offset by lower net sales in G-III's retail businesses.
The company hopes to build on the strength of its non-outerwear unit, expecting to initiate multiple product launches in the comping year. The company will re-launch DKNY and Donna Karan brands around the middle of the year and expects those brands to become cornerstones alongside Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld.
Although the company expects to see some tailwinds in the second half of its fiscal year, a soft start is expected. G-III expects to record a first quarter loss between $0.35 and $0.45 per share, which is well below current market expectations. First quarter revenue is expected to be around $500 million, which is also shy of analysts' estimates. For the full year, G-III expects to generate below-consensus earnings between $0.99 and $1.09 per share on revenue of $2.73 billion. The company's revenue guidance is shy of current expectations.