GIII 10-Q
G III Apparel Group Ltd /De/ (GIII)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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As of September 3, 2026, there were
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20 | ||
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2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
July 31, | July 31, | January 31, | |||||||
2026 | 2025 | 2026 | |||||||
| (Unaudited) | | (Unaudited) | | |||||
(In thousands, except per share amounts) | |||||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | | $ | | $ | | |||
Accounts receivable, net of allowance for doubtful accounts of $ | | | | ||||||
Inventories | | | | ||||||
Prepaid income taxes | | | | ||||||
Prepaid expenses and other current assets | | | | ||||||
Total current assets | | | | ||||||
Investments in unconsolidated affiliates | | | | ||||||
Property and equipment, net | | | | ||||||
Operating lease assets | | | | ||||||
Other assets, net | | | | ||||||
Other intangibles, net | | | | ||||||
Deferred income tax assets, net | | | | ||||||
Trademarks | | | | ||||||
Total assets | $ | | $ | | $ | | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities | |||||||||
Current portion of notes payable | $ | | $ | | $ | | |||
Accounts payable | | | | ||||||
Accrued expenses | | | | ||||||
Customer refund liabilities | | | | ||||||
Current operating lease liabilities | | | | ||||||
Income tax payable | | | | ||||||
Other current liabilities | — | | | ||||||
Total current liabilities | | | | ||||||
Notes payable | | | | ||||||
Deferred income tax liabilities, net | | | | ||||||
Noncurrent operating lease liabilities | | | | ||||||
Other noncurrent liabilities | | | | ||||||
Total liabilities | | | | ||||||
Stockholders' Equity | |||||||||
Preferred stock; | |||||||||
Common stock - $ | | | | ||||||
Additional paid-in capital | | | | ||||||
Accumulated other comprehensive income | | | | ||||||
Retained earnings | | | | ||||||
Common stock held in treasury, at cost - | ( | ( | ( | ||||||
Total stockholders' equity | | | | ||||||
Total liabilities and stockholders' equity | $ | | $ | | $ | | |||
The accompanying notes are an integral part of these statements.
3
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||
2026 | | 2025 | | 2026 | | 2025 | ||||||
(Unaudited) | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Net sales | $ | | $ | | $ | | $ | | ||||
Cost of goods sold | | | | | ||||||||
Gross profit | | | | | ||||||||
Selling, general and administrative expenses | | | | | ||||||||
Depreciation and amortization | | | | | ||||||||
Operating profit | | | | | ||||||||
Other income (loss) | ( | ( | ( | | ||||||||
Interest and financing charges, net | | | | ( | ||||||||
Income before income taxes | | | | | ||||||||
Income tax expense (benefit) | ( | | | | ||||||||
Net income | $ | | $ | | $ | | $ | | ||||
NET INCOME PER COMMON SHARE: | ||||||||||||
Basic: | ||||||||||||
Net income per common share | $ | | $ | | $ | | $ | | ||||
Weighted average number of shares outstanding | | | | | ||||||||
Diluted: | ||||||||||||
Net income per common share | $ | | $ | | $ | | $ | | ||||
Weighted average number of shares outstanding | | | | | ||||||||
Net income | $ | | $ | | $ | | $ | | ||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments | ( | | ( | | ||||||||
Other comprehensive income (loss) | ( | | ( | | ||||||||
Comprehensive income | $ | | $ | | $ | | $ | | ||||
The accompanying notes are an integral part of these statements.
4
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Accumulated | |||||||||||||||||||||
Additional | Other | Common Stock | |||||||||||||||||||
Common Stock | Paid-In | Comprehensive | Retained | Held In Treasury | |||||||||||||||||
Shares | Amount | | Capital | | Income (Loss) | | Earnings | | Shares | Amount | | Total | |||||||||
(Unaudited) | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Balance as of April 30, 2026 | | $ | | $ | | $ | | $ | | | $ | ( | $ | | |||||||
Equity awards vested, net | — | — | ( | — | — | ( | | — | |||||||||||||
Share-based compensation expense | — | — | | — | — | — | — | | |||||||||||||
Taxes paid for net share settlements | — | — | ( | — | — | — | — | ( | |||||||||||||
Other comprehensive loss, net | — | — | — | ( | — | — | — | ( | |||||||||||||
Repurchases of common stock | — | — | — | — | — | | ( | ( | |||||||||||||
Excise tax on stock repurchases | — | — | — | — | — | — | — | — | |||||||||||||
Cash dividends declared on common stock ($ | — | — | — | — | ( | — | — | ( | |||||||||||||
Net income | — | — | — | — | | — | — | | |||||||||||||
Balance as of July 31, 2026 | | $ | | $ | | $ | | $ | | | $ | ( | $ | | |||||||
Balance as of April 30, 2025 | | $ | | $ | | $ | ( | $ | | | $ | ( | $ | | |||||||
Equity awards vested, net | — | — | ( | — | — | ( | | — | |||||||||||||
Share-based compensation expense | — | — | | — | — | — | — | | |||||||||||||
Other comprehensive income, net | — | — | — | | — | — | — | | |||||||||||||
Repurchases of common stock | — | — | — | — | — | | ( | ( | |||||||||||||
Excise tax on stock repurchases | — | — | — | — | — | — | ( | ( | |||||||||||||
Net income | — | — | — | — | | — | — | | |||||||||||||
Balance as of July 31, 2025 | | $ | | $ | | $ | | $ | | | $ | ( | $ | | |||||||
Balance as of January 31, 2026 | | $ | | $ | | $ | | $ | | | $ | ( | $ | | |||||||
Equity awards vested, net | — | — | ( | — | — | ( | | ( | |||||||||||||
Share-based compensation expense | — | — | | — | — | — | — | | |||||||||||||
Taxes paid for net share settlements | — | — | ( | — | — | — | — | ( | |||||||||||||
Other comprehensive loss, net | — | — | — | ( | — | — | — | ( | |||||||||||||
Repurchases of common stock | — | — | — | — | — | | ( | ( | |||||||||||||
Cash dividends declared on common stock ($ | — | — | — | — | ( | — | — | ( | |||||||||||||
Net income | — | — | — | — | | — | — | | |||||||||||||
Balance as of July 31, 2026 | | $ | | $ | | $ | | $ | | | $ | ( | $ | | |||||||
Balance as of January 31, 2025 | | $ | | $ | | $ | ( | $ | | | $ | ( | $ | | |||||||
Equity awards vested, net | — | — | ( | — | — | ( | | — | |||||||||||||
Share-based compensation expense | — | — | | — | — | — | — | | |||||||||||||
Taxes paid for net share settlements | — | — | ( | — | — | — | — | ( | |||||||||||||
Other comprehensive income, net | — | — | — | | — | — | — | | |||||||||||||
Repurchases of common stock | — | — | — | — | — | | ( | ( | |||||||||||||
Excise tax on stock repurchases | — | — | — | — | — | — | ( | ( | |||||||||||||
Net income | — | — | — | — | | — | — | | |||||||||||||
Balance as of July 31, 2025 | | $ | | $ | | $ | | $ | | | $ | ( | $ | | |||||||
The accompanying notes are an integral part of these statements.
5
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended July 31, | ||||||
| 2026 | | 2025 | |||
(Unaudited, in thousands) | ||||||
Cash flows from operating activities | ||||||
Net income | $ | | $ | | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | | | ||||
Loss on disposal of fixed assets | | | ||||
Non-cash operating lease costs | | | ||||
Equity loss in unconsolidated affiliates | | | ||||
Share-based compensation | | | ||||
Deferred financing charges and debt discount amortization | | | ||||
Deferred income taxes | ( | | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable, net | | | ||||
Inventories | ( | ( | ||||
Income taxes, net | | ( | ||||
Prepaid expenses and other current assets | ( | ( | ||||
Other assets, net | | | ||||
Customer refund liabilities | ( | ( | ||||
Operating lease liabilities | ( | ( | ||||
Accounts payable, accrued expenses and other liabilities | | | ||||
Net cash provided by operating activities | | | ||||
Cash flows from investing activities | ||||||
Operating lease assets initial direct costs | — | ( | ||||
Investment in equity interest of private company | — | ( | ||||
Capital expenditures | ( | ( | ||||
Net cash used in investing activities | ( | ( | ||||
Cash flows from financing activities | ||||||
Repayment of borrowings - foreign facilities | ( | ( | ||||
Proceeds from borrowings - foreign facilities | | | ||||
Dividends paid on common stock | ( | — | ||||
Purchase of treasury shares | ( | ( | ||||
Taxes paid for net share settlements | ( | ( | ||||
Net cash used in financing activities | ( | ( | ||||
Foreign currency translation adjustments | ( | | ||||
Net increase in cash and cash equivalents | | | ||||
Cash and cash equivalents at beginning of period | | | ||||
Cash and cash equivalents at end of period | $ | | $ | | ||
Supplemental disclosures of cash flow information | ||||||
Cash payments: | ||||||
Interest, net | $ | | $ | | ||
Income tax payments, net | $ | | $ | | ||
Excise tax liability related to stock repurchases | $ | — | $ | | ||
The accompanying notes are an integral part of these statements.
6
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION
As used in these financial statements, the term “Company” or “G-III” refers to G-III Apparel Group, Ltd. and its subsidiaries. The Company designs, sources, distributes and markets an extensive range of apparel, including outerwear, dresses, sportswear, swimwear, women’s suits and women’s performance wear, as well as women’s handbags, footwear, small leather goods, cold weather accessories and luggage. The Company also operates retail stores and licenses its proprietary brands under several product categories.
The Company consolidates the accounts of its wholly-owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated. Investments in entities that the Company does not control but has the ability to exercise significant influence over are accounted for using the equity method of accounting. The Company’s condensed consolidated statements of income include its proportionate share of the net income or loss of these entities.
Karl Lagerfeld Holding B.V. (“KLH”), a Dutch limited liability company that is wholly-owned by the Company, Vilebrequin International SA (“Vilebrequin”), a Swiss corporation that is wholly-owned by the Company and certain other subsidiaries of the Company report results on a calendar year basis rather than on the January 31 fiscal year basis used by the Company. Accordingly, the results of KLH, Vilebrequin and certain other subsidiaries of the Company are included in the financial statements for the quarter ended or ending closest to the Company’s fiscal quarter end. For example, with respect to the Company’s results for the six-month period ended July 31, 2026, the results of KLH, Vilebrequin and certain other subsidiaries of the Company are included for the six-month period ended June 30, 2026. The Company’s retail operations segment reports on a 52/53 week fiscal year. For fiscal 2027 and 2026, the three and six-month periods for the retail operations segment were each 13-week and 26-week periods, respectively, and ended on August 1, 2026 and August 2, 2025, respectively.
The results for the three and six months ended July 31, 2026 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business. The accompanying financial statements included herein are unaudited. All adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim period presented have been reflected.
The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the Securities and Exchange Commission (the “SEC”).
Assets and liabilities of the Company’s foreign operations, where the functional currency is not the U.S. dollar (reporting currency), are translated from the foreign currency into U.S. dollars at period-end rates, while income and expenses are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income (loss) within stockholders’ equity.
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NOTE 2 – ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Company’s financial instruments consist of trade receivables arising from revenue transactions in the ordinary course of business. The Company considers its trade receivables to consist of
The Company’s accounts receivable and allowance for doubtful accounts as of July 31, 2026, July 31, 2025 and January 31, 2026 were:
July 31, 2026 | |||||||||
| Wholesale | | Retail | | Total | ||||
(In thousands) | |||||||||
Accounts receivable, gross | $ | | $ | | $ | | |||
Allowance for doubtful accounts | ( | ( | ( | ||||||
Accounts receivable, net | $ | | $ | | $ | | |||
July 31, 2025 | |||||||||
Wholesale | | Retail | | Total | |||||
(In thousands) | |||||||||
Accounts receivable, gross | $ | | $ | | $ | | |||
Allowance for doubtful accounts | ( | ( | ( | ||||||
Accounts receivable, net | $ | | $ | | $ | | |||
January 31, 2026 | |||||||||
Wholesale | | Retail | | Total | |||||
(In thousands) | |||||||||
Accounts receivable, gross | $ | | $ | | $ | | |||
Allowance for doubtful accounts | ( | ( | ( | ||||||
Accounts receivable, net | $ | | $ | | $ | | |||
The allowance for doubtful accounts for wholesale trade receivables is estimated based on several factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (such as in the case of bankruptcy filings (including potential bankruptcy filings), extensive delay in payment or substantial downgrading by credit rating agencies), a specific reserve for bad debt is recorded against amounts due from that customer to reduce the net recognized receivable to the amount reasonably expected to be collected. For all other wholesale customers, an allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the end of the reporting period for financial statements, assessments of collectability based on historical trends and an evaluation of the impact of economic conditions. The Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts.
The allowance for doubtful accounts for retail trade receivables is estimated at the credit card chargeback rate applied to the previous 90 days of credit card sales. In addition, the Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts.
During the six months ended July 31, 2026, accounts receivable balances of $
8
The Company had the following activity in its allowance for doubtful accounts:
| Wholesale | | Retail | | Total | ||||
(In thousands) | |||||||||
Balance as of January 31, 2026 | $ | ( | $ | ( | $ | ( | |||
Provision for credit losses, net | | — | | ||||||
Accounts written off as uncollectible | | — | | ||||||
Balance as of July 31, 2026 | $ | ( | $ | ( | $ | ( | |||
Balance as of January 31, 2025 | $ | ( | $ | ( | $ | ( | |||
Provision for credit losses, net | ( | — | ( | ||||||
Accounts written off as uncollectible | | — | | ||||||
Balance as of July 31, 2025 | $ | ( | $ | ( | $ | ( | |||
Balance as of January 31, 2025 | $ | ( | $ | ( | $ | ( | |||
Provision for credit losses, net | ( | — | ( | ||||||
Accounts written off as uncollectible | | — | | ||||||
Balance as of January 31, 2026 | $ | ( | $ | ( | $ | ( | |||
NOTE 3 – INVENTORIES
Wholesale inventories, which comprise a significant portion of the Company’s inventory, are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Retail and Vilebrequin inventories are stated at the lower of cost (determined by the weighted average method) or net realizable value. Substantially all of the Company’s inventories consist of finished goods.
The inventory return asset, which consists of the amount of goods that are anticipated to be returned by customers, was $
Inventory held on consignment by the Company’s customers totaled $
NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS
Generally Accepted Accounting Principles establish a three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy for a particular asset or liability depends on the inputs used in its valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally-derived (unobservable). A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:
| ● | Level 1 — inputs to the valuation methodology based on quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 — inputs to the valuation methodology based on quoted prices for similar assets or liabilities in active markets for substantially the full term of the financial instrument; quoted prices for identical or similar instruments in markets that are not active for substantially the full term of the financial instrument; and model-derived valuations whose inputs or significant value drivers are observable. |
| ● | Level 3 — inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement. |
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The following table summarizes the carrying values and the estimated fair values of the Company’s debt instruments:
Carrying Value | Fair Value | |||||||||||||||||||
| July 31, | July 31, | January 31, | | July 31, | July 31, | January 31, | |||||||||||||
Financial Instrument | Level | 2026 | 2025 | 2026 | 2026 | 2025 | 2026 | |||||||||||||
(In thousands) | ||||||||||||||||||||
Unsecured loans | 2 | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Overdraft facilities | 2 | | | | | | | |||||||||||||
Foreign credit facilities | 2 | | | | | | | |||||||||||||
The Company’s debt instruments are recorded at their carrying values in its condensed consolidated balance sheets, which may differ from their respective fair values. The carrying amount of the Company’s variable rate debt approximates the fair value, as interest rates change with market rates. Furthermore, the carrying value of all other financial instruments potentially subject to valuation risk (principally consisting of cash, accounts receivable and accounts payable) also approximates fair value due to the short-term nature of these accounts.
Non-Financial Assets and Liabilities
The Company’s non-financial assets that are measured at fair value on a nonrecurring basis include long-lived assets, which consist primarily of property and equipment and operating lease assets. The Company reviews these assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable. For assets that are not recoverable, an impairment loss is recognized equal to the difference between the carrying amount of the asset or asset group and its estimated fair value. For operating lease assets, the Company determines the fair value of the assets by discounting the estimated market rental rates over the remaining term of the lease. These fair value measurements are considered level 3 measurements in the fair value hierarchy.
NOTE 5 – LEASES
The Company leases retail stores, warehouses, distribution centers, office space and certain equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.
Most leases are for a term of to
Certain of the Company’s lease agreements include contingent rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Contingent rent is accrued each period as the liabilities are incurred. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.
The Company’s operating lease assets and liabilities as of July 31, 2026, July 31, 2025 and January 31, 2026 consist of the following:
Leases | Classification | July 31, 2026 | July 31, 2025 | January 31, 2026 | |||||||
(In thousands) | |||||||||||
Assets | |||||||||||
Operating | $ | | $ | | $ | | |||||
Liabilities | |||||||||||
Current operating | $ | | $ | | $ | | |||||
Noncurrent operating | | | | ||||||||
Total lease liabilities | $ | | $ | | $ | | |||||
10
The Company recorded lease costs of $
As of July 31, 2026, the Company’s maturities of operating lease liabilities in the years ending up to January 31, 2031 and thereafter are as follows:
Year Ending January 31, | Amount | ||
(In thousands) | |||
2027 | $ | | |
2028 | | ||
2029 | | ||
2030 | | ||
2031 | | ||
After 2031 | | ||
Total lease payments | $ | | |
Less: Interest | | ||
Present value of lease liabilities | $ | | |
As of July 31, 2026, the weighted average remaining lease term related to operating leases is
Cash paid for amounts included in the measurement of operating lease liabilities was $
NOTE 6 – NET INCOME PER COMMON SHARE
Basic net income per common share has been computed using the weighted average number of common shares outstanding during each period. Diluted net income per share, when applicable, is computed using the weighted average number of common shares and potential dilutive common shares, consisting of unvested restricted stock unit awards outstanding during the period. Approximately
11
The following table reconciles the numerators and denominators used in the calculation of basic and diluted net income per share:
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | |||||
(In thousands, except share and per share amounts) | ||||||||||||
Net income | $ | | $ | | $ | | $ | | ||||
Basic net income per share: | ||||||||||||
Basic common shares | | | | | ||||||||
Basic net income per share | $ | | $ | | $ | | $ | | ||||
Diluted net income per share: | ||||||||||||
Basic common shares | | | | | ||||||||
Dilutive restricted stock unit awards and stock options | | | | | ||||||||
Diluted common shares | | | | | ||||||||
Diluted net income per share | $ | | $ | | $ | | $ | | ||||
NOTE 7 – NOTES PAYABLE
Long-term debt consists of the following:
| July 31, 2026 | | July 31, 2025 | | January 31, 2026 | ||||
(In thousands) | |||||||||
Unsecured loans | $ | | $ | | $ | | |||
Overdraft facilities | | | | ||||||
Foreign credit facilities | | | | ||||||
Subtotal | | | | ||||||
Less: Current portion of long-term debt | ( | ( | ( | ||||||
Total | $ | | $ | | $ | | |||
Third Amended and Restated ABL Credit Agreement
On June 4, 2024, the Company’s subsidiaries, G-III Leather Fashions, Inc., Riviera Sun, Inc., AM Retail Group, Inc. and The Donna Karan Company Store LLC (collectively, the “Borrowers”), entered into the third amended and restated credit agreement (the “Third ABL Credit Agreement”) with the lenders named therein and with JPMorgan Chase Bank, N.A., as administrative agent. The Third ABL Credit Agreement is a
The Third ABL Credit Agreement amends and restates the Second Amended Credit Agreement, dated as of August 7, 2020 (as amended, supplemented or otherwise modified from time to time prior to June 4, 2024, the “Second Credit Agreement”), by and among the Borrowers and the Guarantors, the lenders from time-to-time party thereto, and JPMorgan Chase Bank, N.A., in its capacity as the administrative agent thereunder. The Second Credit Agreement provided for borrowings of up to $
Amounts available under the Third ABL Credit Agreement are subject to borrowing base formulas and overadvances as specified in the Third ABL Credit Agreement. Borrowings bear interest, at the Borrowers’ option, at Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus a margin of
12
The Third ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors. In addition to paying interest on any outstanding borrowings under the Third ABL Credit Agreement, the Company is required to pay a commitment fee to the lenders under the credit agreement with respect to the unutilized commitments. The commitment fee accrues at a tiered rate equal to
The Third ABL Credit Agreement contains covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt; incur liens; sell or dispose of certain assets; merge with other companies; liquidate or dissolve the Company; acquire other companies; make loans, advances, or guarantees; and make certain investments. In certain circumstances, the revolving credit facility also requires the Company to maintain a fixed charge coverage ratio, as defined in the agreement, not less than
As of July 31, 2026, the Company had
The Company has a total of $
Unsecured Loans
Several of the Company’s foreign entities borrow funds under various unsecured loans to provide funding for operations in the normal course of business. In the aggregate, the Company is currently required to make quarterly installment payments of principal in the amount of €
Overdraft Facilities
Certain of the Company’s foreign entities entered into overdraft facilities that allow for applicable bank accounts to be in a negative position up to a certain maximum overdraft. These uncommitted overdraft facilities with HSBC Bank allow for an aggregate maximum overdraft of €
Foreign Credit Facilities
KLH has a credit agreement with ABN AMRO Bank N.V. with a credit limit of €
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NOTE 8 – SUPPLY CHAIN FINANCE PROGRAM
The Company has a voluntary supply chain finance program (the “SCF Program”) administered through a third-party platform. The Company’s payment obligations confirmed under the SCF Program are due to a financial intermediary that will remit payment to the Company’s suppliers. The SCF Program also provides participating suppliers with the option to sell their receivables due from the Company, at their sole discretion, to a third-party financial institution at terms negotiated between the supplier and the financial institution. The Company is not a party to the agreements between the suppliers and the financial institution. The Company’s payment obligations to its suppliers, including the amounts due and payment terms, which generally do not exceed
The Company’s outstanding payment obligations under its SCF Program are recorded within accounts payable in the Company’s condensed consolidated balance sheets and the corresponding payments are reflected in cash flows from operating activities within the Company’s condensed consolidated statements of cash flows. The Company had $
NOTE 9 – REVENUE RECOGNITION
Disaggregation of Revenue
In accordance with ASC 606 – Revenue from Contracts with Customers, the Company discloses its revenues by segment. Each segment presents its own characteristics with respect to the timing of revenue recognition and the type of customer. In addition, disaggregating revenues using a segment basis is consistent with how the Company’s Chief Operating Decision Maker manages the Company. The Company has identified the wholesale operations segment and the retail operations segment as distinct sources of revenue.
Wholesale Operations Segment. Wholesale revenues include sales of products to retailers under owned, licensed and private label brands, as well as sales related to the Karl Lagerfeld and Vilebrequin businesses, including from retail stores operated by Karl Lagerfeld and Vilebrequin, other than sales of product under the Karl Lagerfeld Paris brand generated by the Company’s retail stores and digital platforms. Wholesale revenues from sales of products are recognized when control transfers to the customer. The Company considers control to have been transferred when the Company has transferred physical possession of the product, the Company has a right to payment for the product, the customer has legal title to the product and the customer has the significant risks and rewards of the product. Wholesale revenues are adjusted by variable consideration arising from implicit or explicit obligations. Wholesale revenues also include revenues from license agreements related to trademarks associated with the Company’s owned brands. As of July 31, 2026, revenues from license agreements related to trademarks associated with the Company’s owned brands represented an insignificant portion of wholesale revenues.
Retail Operations Segment. Retail store revenues are generated by direct sales to consumers through company operated stores and product sales through the Company’s digital channels for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H. Bass and Wilsons Leather businesses. Retail stores primarily consist of DKNY and Karl Lagerfeld Paris retail stores, substantially all of which are operated as outlet stores in North America. Retail operations segment revenues are recognized at the point of sale when the customer takes possession of the goods and tenders payment. Digital revenues primarily consist of sales to consumers through the Company’s digital platforms. Digital revenue is recognized when a customer takes possession of the goods. Retail sales are recorded net of applicable sales tax.
Contract Liabilities
The Company’s contract liabilities, which are recorded within accrued expenses in the accompanying condensed consolidated balance sheets, primarily consist of gift card liabilities and advance payments from licensees. Total contract
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liabilities were $
NOTE 10 – SEGMENTS
The Company’s reportable segments are business units that offer products through different channels of distribution. The Company has
The Company determines its operating segments based on how the Chief Operating Decision Maker (“CODM”) views and analyzes each segment’s operations and performance. The Company’s CODM is its Chief Executive Officer. The CODM utilizes operating profit or loss as the measure of segment profit or loss. The CODM uses operating profit or loss to determine resource allocation and operational decisions for matters including, but not limited to, compensation, advertising and facilities needs.
The following segment information is presented for the three month periods indicated below:
Three Months Ended July 31, 2026 | ||||||||||||
| Wholesale | | Retail | | Elimination (1) | | Total | |||||
(In thousands) | ||||||||||||
Net sales | $ | | $ | | $ | ( | $ | | ||||
Cost of goods sold | | (2) | | ( | | |||||||
Gross profit | | | — | | ||||||||
Selling, general and administrative expenses: | ||||||||||||
Compensation | | | — | | ||||||||
Facility fees | | | — | | ||||||||
Advertising | | | — | | ||||||||
Other segment items(3) | | | — | | ||||||||
Total selling, general and administrative expenses | | | — | | ||||||||
Depreciation and amortization | | | — | | ||||||||
Operating profit (loss) | $ | | $ | ( | $ | — | $ | | ||||
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Three Months Ended July 31, 2025 | ||||||||||||
| Wholesale | | Retail | | Elimination (1) | | Total | |||||
(In thousands) | ||||||||||||
Net sales | $ | | $ | | $ | ( | $ | | ||||
Cost of goods sold | | | ( | | ||||||||
Gross profit | | | — | | ||||||||
Selling, general and administrative expenses: | ||||||||||||
Compensation | | | — | | ||||||||
Facility fees | | | — | | ||||||||
Advertising | | | — | | ||||||||
Other segment items(3) | | | — | | ||||||||
Total selling, general and administrative expenses | | | — | | ||||||||
Depreciation and amortization | | | — | | ||||||||
Operating profit (loss) | $ | | $ | ( | $ | — | $ | | ||||
Six Months Ended July 31, 2026 | ||||||||||||
| Wholesale | | Retail | | Elimination (1) | | Total | |||||
(In thousands) | ||||||||||||
Net sales | $ | | $ | | $ | ( | $ | | ||||
Cost of goods sold | | (2) | | ( | | |||||||
Gross profit | | | — | | ||||||||
Selling, general and administrative expenses: | ||||||||||||
Compensation | | | — | | ||||||||
Facility fees | | | — | | ||||||||
Advertising | | | — | | ||||||||
Other segment items(3) | | | — | | ||||||||
Total selling, general and administrative expenses | | | — | | ||||||||
Depreciation and amortization | | | — | | ||||||||
Asset impairments | — | — | — | — | ||||||||
Operating profit (loss) | $ | | $ | ( | $ | — | $ | | ||||
Six Months Ended July 31, 2025 | ||||||||||||
| Wholesale | | Retail | | Elimination (1) | | Total | |||||
(In thousands) | ||||||||||||
Net sales | $ | | $ | | $ | ( | $ | | ||||
Cost of goods sold | | | ( | | ||||||||
Gross profit | | | — | | ||||||||
Selling, general and administrative expenses: | ||||||||||||
Compensation | | | — | | ||||||||
Facility fees | | | — | | ||||||||
Advertising | | | — | | ||||||||
Other segment items(3) | | | — | | ||||||||
Total selling, general and administrative expenses | | | — | | ||||||||
Depreciation and amortization | | | — | | ||||||||
Operating profit (loss) | $ | | $ | ( | $ | — | $ | | ||||
| (1) | Represents intersegment sales to the Company’s retail operations segment. |
| (2) | The wholesale operations segment includes reductions of $ |
| (3) |
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The total net sales by licensed and proprietary product sales for each of the Company’s reportable segments are as follows:
Three Months Ended | Six Months Ended | |||||||||||
| July 31, 2026 | | July 31, 2025 | | July 31, 2026 | | July 31, 2025 | |||||
(In thousands) | ||||||||||||
Licensed brands | $ | | $ | | $ | | $ | | ||||
Proprietary brands | | | | | ||||||||
Wholesale net sales | $ | | $ | | $ | | $ | | ||||
Proprietary brands | $ | | $ | | $ | | $ | | ||||
Retail net sales | $ | | $ | | $ | | $ | | ||||
The Company allocates overhead to its business segments on various bases, which include units shipped, space utilization, inventory levels and relative sales levels, among other factors. The method of allocation has been applied consistently on a period-to-period basis.
The total assets for each of the Company’s reportable segments, as well as assets not allocated to a segment, are as follows:
| July 31, 2026 | | July 31, 2025 | | January 31, 2026 | ||||
(In thousands) | |||||||||
Wholesale | $ | | $ | | $ | | |||
Retail | | | | ||||||
Corporate | | | | ||||||
Total assets | $ | | $ | | $ | | |||
Capital expenditures during the six months ended July 31, 2026 for the wholesale operations segment and retail operations segment were $
NOTE 11 – STOCKHOLDERS’ EQUITY
For the three months ended July 31, 2026, the Company issued
Dividends
On
On
NOTE 12 – IEEPA TARIFF REFUND
In February 2026, the Supreme Court of the United States ruled against the current administration’s use of the International Emergency Economic Powers Act (“IEEPA”) to impose certain tariffs levied since February 2025. Pursuant to a court order on March 4, 2026 from the U.S. Court of International Trade (“CIT”) directing the refund of such tariffs, including applicable interest, on April 20, 2026, U.S. Customs and Border Protection (“CBP”) launched the Consolidated
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Administration and Processing of Entries (“CAPE”) system to facilitate refund claims, to which the Company successfully submitted its refund claim.
In April 2026, the Company assessed that the recovery of previously paid IEEPA tariffs was probable and reasonably estimable in accordance with the cost recovery accounting guidance, based on the Supreme Court ruling, the CIT order and actions taken by CBP regarding the refund process and other available information, including offers from third-party financial institutions to acquire the Company’s tariff refund claim. Accordingly, during the first quarter of fiscal 2027, the Company recorded a receivable of approximately $
The accounting for the IEEPA tariff refund reflects the original treatment of the underlying tariff costs. During the six months ended July 31, 2026, the Company recognized a $
During the second quarter of fiscal 2027, the Company received approximately $
The timing of cash receipts for the remaining tariff refund claim remains dependent upon the processing of refund claims by CBP and the U.S. Department of Treasury.
NOTE 13 – LITIGATION AND OTHER MATTERS
Litigation with PVH Corp.
On June 13, 2025, the Company filed a complaint against . and
The Company believes that Calvin Klein, Inc. and Tommy Hilfiger Licensing LLC’s complaint and counterclaims are without merit, and the Company intends to vigorously defend against these actions. Due to the uncertainty inherent in any litigation, the Company is unable to estimate any reasonably possible loss, or range of loss, with respect to this matter.
AWWG Brand Agency Termination
In fiscal 2025, the Company entered into agreements for AWWG to act as the official agent for DKNY, Donna Karan and Karl Lagerfeld across Spain and Portugal, as well as for the Company’s licensed Converse products in select countries. In
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June 2026, the Company and AWWG agreed to terminate the brand agency agreements as well as certain related service agreements and are working toward an orderly transition of the affected operations with termination effective as of December 31, 2026.
NOTE 14 – RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS
Recently Adopted Accounting Guidance
There was no accounting guidance adopted during the three months ended July 31, 2026.
Issued Accounting Guidance Being Evaluated for Adoption
In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The ASU requires public entities to disclose more detailed information about certain costs and expenses presented in the income statement, including inventory purchases, employee compensation, selling expenses, depreciation and intangible asset amortization. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments in this ASU should be applied prospectively; however, retrospective application is permitted. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures.
NOTE 15 – MARC JACOBS ACQUISITION
On May 14, 2026, the Company entered into certain agreements relating to the acquisition of the Marc Jacobs business from LVMH Moet Hennessy Louis Vuitton Inc. and its affiliates (“LVMH”), which was completed as of September 1, 2026 (the “Closing Date”). The transaction was structured such that (i) MJ Topco, LLC (“IPCo”), a newly formed joint venture in which a subsidiary of the Company owns
The license agreement, entered into on the Closing Date by IPCo and certain subsidiaries of the Company, granted an exclusive right to use the Marc Jacobs brand in the United States, Canada, Mexico and Western Europe for the distribution, promotion and sale of specified product categories, including women’s and men’s apparel, handbags, footwear, swim, small leather goods, luggage and cold weather accessories, through wholesale channels, branded retail stores and branded e-commerce sites. The initial term of the license agreement is from the Closing Date through December 2041, and we have
Due to the limited time since the Closing Date, the initial accounting for the Marc Jacobs acquisition is incomplete as of the date of this filing. As such, it is impracticable for the Company to make certain business combination disclosures required by ASC 805 – Business Combinations at this time. The Company is unable to provide i) the allocation of the preliminary purchase price to the fair value of assets acquired and liabilities assumed and ii) supplemental pro forma revenue and earnings of the combined entity. The Company will provide this information in its quarterly report on Form 10-Q for the quarter ending October 31, 2026.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Unless the context otherwise requires, “G-III,” “us,” “we” and “our” refer to G-III Apparel Group, Ltd. and its subsidiaries. References to fiscal years refer to the year ended or ending on January 31 of that year. For example, our fiscal year ending January 31, 2027 is referred to as “fiscal 2027.”
Each of Vilebrequin, KLH and certain other subsidiaries report results on a calendar year basis rather than on the January 31 fiscal year basis used by G-III. Accordingly, the results of Vilebrequin, KLH and certain other subsidiaries are included in the financial statements for the quarter ended or ending closest to G-III’s fiscal quarter end. For example, with respect to our results for the six-month period ended July 31, 2026, the results of Vilebrequin, KLH and certain other subsidiaries are included for the six-month period ended June 30, 2026. Our retail operations segment reports on a 52/53 week fiscal year. For fiscal 2027 and 2026, the three and six-month periods for the retail operations segment were each 13-week and 26-week periods and ended on August 1, 2026 and August 2, 2025, respectively.
Various statements contained in this Quarterly Report on Form 10-Q, in future filings by us with the SEC, in our press releases and in oral statements made from time to time by us or on our behalf constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations and are indicated by words or phrases such as “anticipate,” “estimate,” “expect,” “will,” “project,” “believe,” “envision,” “forecast” and similar words or phrases and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed in or implied by such forward-looking statements. Forward-looking statements also include representations of our expectations or beliefs concerning future events that involve risks and uncertainties, including, but not limited to, the following:
| ● | the failure to maintain or renew our material license agreements could cause us to lose significant revenues and have a material adverse effect on our results of operations; |
| ● | our dependence on the strategies and reputation of our licensors; |
| ● | risks associated with our wholesale operations including risks relating to the image of our proprietary brands and business practices of our customers; |
| ● | our use of social media and our collaborations with influencers; |
| ● | risks associated with customers changing buying patterns, requesting additional allowances, developing private-label brands, or entering exclusive agreements with national brand manufacturers; |
| ● | our significant customer concentration, and the risk that the loss of one of our largest customers could adversely affect our business; |
| ● | risks relating to our retail operations segment; |
| ● | dependence on existing management; |
| ● | our ability to make strategic acquisitions and investments and possible disruptions from acquisitions (including our acquisition of the Marc Jacobs business and our joint venture with WHP Global that holds the Marc Jacobs intellectual property) and the risks associated with our ability to maintain an effective internal control environment; |
| ● | risks relating to our acquisition of the Marc Jacobs business, including our ability to transition the Marc Jacobs business and to realize the anticipated benefits of the acquisition on a timely basis, the expenses related to the acquisition and the transition of the business, and our ability to operate the Marc Jacobs business being dependent on a license agreement that is terminable under certain circumstances; |
| ● | seasonal nature of our business and effect of unseasonable or extreme weather on our business; |
| ● | possible adverse effects from disruptions to the worldwide supply chain; |
| ● | price, availability and quality of materials used in our products; |
| ● | the need to protect our trademarks and other intellectual property; |
| ● | risk that our partners may not generate expected sales or maintain the value of our brands; |
| ● | the impact of the current economic and credit environment on us, our customers, suppliers and vendors, including without limitation, the effects of inflationary cost pressures and higher interest rates; |
| ● | consolidation, bankruptcy or liquidation of major department, mass merchant and specialty store chains; |
| ● | effects of war, acts of terrorism, natural disasters or public health crises could adversely affect our business and results of operations, including the conflicts in Ukraine and the Middle East; |
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| ● | our ability to anticipate and respond to changing customer preferences and shifts in fashion and industry trends in a timely manner; |
| ● | our dependence on foreign manufacturers and arrangements with them, exposing us to potential import restrictions, duties and tariffs; |
| ● | risks of expansion into foreign markets, conducting business internationally and exposures to foreign currencies; |
| ● | risks associated with evolving privacy laws that impose additional limits on how we collect or use customer information; |
| ● | our ability to comply with rules relating to the processing of credit card payments; |
| ● | possible adverse effects of data security or privacy breaches; |
| ● | risks related to use of artificial intelligence; |
| ● | changes in trade policies and tariffs imposed by the United States government and the governments of other nations; |
| ● | the impact on our business of the imposition of tariffs by the United States government and the escalation of trade tensions between countries; |
| ● | changes in tax legislation or exposure to additional tax liabilities that could impact our business; |
| ● | the effect of regulations applicable to us as a U.S. public company; |
| ● | fluctuations in the price of our common stock; |
| ● | potential effect on the price of our stock if actual results are worse than financial forecasts or if we are unable to provide financial forecasts; |
| ● | impairment of our trademarks or other intangibles may require us to record charges against earnings; |
| ● | our ability to pay dividends on our common stock; |
| ● | the impact our indebtedness may have on our financial condition and our ability to obtain financing in the future; and |
| ● | the operating and financial restrictions related to our ABL credit agreement that may limit our current and future operating flexibility. |
Any forward-looking statements are based largely on our expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control. A detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations is described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended January 31, 2026. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Overview
G-III is a global leader in fashion with expertise in design, sourcing, distribution and marketing, which enables us to fuel growth across a portfolio of over 30 globally recognized owned and licensed brands, anchored by our key owned brands, DKNY, Donna Karan, Karl Lagerfeld and Vilebrequin. We develop products across a diverse range of lifestyle categories which include outerwear, dresses, sportswear, suit separates, athleisure, jeans, swimwear, as well as handbags, footwear, small leather goods, cold weather accessories and luggage. Our brands are positioned to sell at various price points with global distribution across a diverse mix of channels and geographies to reach a broad range of consumers.
Our owned brands include DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Eliza J, Jessica Howard, Andrew Marc, G.H. Bass, Wilsons Leather and Sonia Rykiel. We have an extensive portfolio of well-known licensed brands, including Calvin Klein, Tommy Hilfiger, BCBG, Converse, French Connection, Halston, Levi’s, Champion, Nautica, Starter and major national sports leagues, among others. Through our licensed team sports business, we have partnerships with the National Football League, National Basketball Association, Major League Baseball, National Hockey League and over 150 U.S. colleges and universities. We also source and sell products to major retailers for their own private label programs.
Our products are sold through a cross section of leading retailers such as Macy’s, Bloomingdale’s, Dillard’s, Nordstrom, El Cortes Ingles, Kohl’s, TJ Maxx, Marshall’s, Ross Stores, Burlington and Costco. We also sell our products using digital channels through retail partners such as macys.com, bloomingdales.com, nordstrom.com and dillards.com, each of which operates significant digital businesses. In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos.
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We also distribute apparel and other products directly to consumers through our own DKNY, Karl Lagerfeld, Karl Lagerfeld Paris and Vilebrequin retail stores, as well as through our digital sites for our DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin and Wilsons Leather brands.
We operate in fashion markets that are intensely competitive. Our ability to continuously evaluate and respond to changing consumer demands and tastes, across multiple market segments, distribution channels and geographic areas is critical to our success. Although our portfolio of brands is aimed at diversifying our risks in this regard, misjudging shifts in consumer preferences could have a negative effect on our business. Our continued success depends on our ability to design products that are accepted in the marketplace, source the manufacture of our products on a competitive basis and continue to diversify our product portfolio and the markets we serve.
We believe that consumers prefer to buy brands they know, and we have continually sought to increase the portfolio of name brands we can offer through different tiers of retail distribution, for a wide array of products at a variety of price points. We have increased the portfolio of brands we offer through licenses, acquisitions and joint ventures. It is our objective to continue to expand our product offerings and we are continually discussing new licensing opportunities with brand owners and seeking to acquire established brands.
Recent Developments
Marc Jacobs Acquisition and License
On May 14, 2026, we entered into certain agreements relating to the acquisition of the Marc Jacobs business (the “Marc Jacobs Acquisition”) from LVMH Moet Hennessy Louis Vuitton Inc. and its affiliates (“LVMH”), which was completed as of September 1, 2026 (the “Closing Date”). The transaction was structured such that (i) MJ Topco, LLC (“IPCo”), a newly formed joint venture in which a subsidiary of the Company owns 50% of the membership interests and an affiliate of WHP Global (“WHP”) owns the remaining 50%, acquired all of the issued and outstanding units of Marc Jacobs Holdings, LLC through a wholly-owned indirect subsidiary, Majestic AcqCo, LLC, (ii) following such acquisition, we acquired 100% of the Marc Jacobs operating business through our subsidiaries, and (iii) IPCo retained the Marc Jacobs intellectual property and certain other retained assets. We funded our approximately $500 million investment using cash on hand and borrowings under our revolving credit facility. We operate the business pursuant to a license from IPCo.
The license agreement, entered into on the Closing Date by IPCo and certain subsidiaries of the Company, granted an exclusive right to use the Marc Jacobs brand in the United States, Canada, Mexico and Western Europe for the distribution, promotion and sale of specified product categories, including women’s and men’s apparel, handbags, footwear, swim, small leather goods, luggage and cold weather accessories, through wholesale channels, branded retail stores and branded e-commerce sites. The initial term of the license agreement is from the Closing Date through December 2041, and we have 10 successive options to renew the license agreement for periods of 5 years.
French Connection License Agreement
Effective February 2026, we entered into a license agreement with French Connection Limited to design and produce women’s and men’s apparel (subject to certain exclusions), women’s and men’s outerwear, handbags and men’s footwear under the French Connection brand. The license agreement includes an initial term of five-years with an option to renew for an additional five-year term. The products produced under this license agreement are expected to be distributed in North America through our diversified distribution network, including premier department stores, digital channels, as well as other channels. First deliveries of our French Connection product began in February 2026 for Spring 2026. We believe that significant opportunity exists in the categories subject to this license agreement where we have strong expertise, and the products expected to be produced align with G-III’s core competencies.
AWWG Brand Agency Termination
In fiscal 2025, we entered into agreements for AWWG Investments B.V. (“AWWG”) to act as the official agent for DKNY, Donna Karan and Karl Lagerfeld across Spain and Portugal, as well as for our licensed Converse products in select countries. In June 2026, the Company and AWWG agreed to terminate the brand agency agreements as well as certain
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related service agreements and are working toward an orderly transition of the affected operations, with termination effective as of December 31, 2026.
Segments
We report based on two segments: wholesale operations and retail operations.
Our wholesale operations segment includes sales of products to retailers under owned, licensed and private label brands, as well as sales related to the Vilebrequin and Karl Lagerfeld businesses, including from retail stores operated by Vilebrequin and Karl Lagerfeld, other than sales of product under the Karl Lagerfeld Paris brand generated by our retail stores and digital sites. Wholesale revenues also include royalty revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Karl Lagerfeld, G.H. Bass, Andrew Marc, Vilebrequin and Sonia Rykiel in product categories we do not produce ourselves.
Our retail operations segment consists primarily of direct sales to consumers through our company operated stores and product sales through our digital sites for the DKNY, Donna Karan, Karl Lagerfeld Paris and Wilsons Leather brands. As of July 31, 2026, our retail operations segment consisted of 47 company operated stores for our DKNY and Karl Lagerfeld Paris brands, substantially all of which are operated as outlet stores in North America.
Trends Affecting Our Business
Tariffs
Beginning in April 2025, the United States announced additional tariffs on goods imported into the United States, with incremental tariffs on products imported from many countries, including China, Vietnam and Bangladesh, and the potential for further increases and revisions or terminations to existing trade agreements. In response, some countries have announced, or are otherwise considering, retaliatory tariffs on United States exports and other trade restrictions. These actions have led to significant volatility and uncertainty in global markets. During fiscal 2026, approximately 71.6% of our product was sourced from China, Vietnam and Bangladesh.
In February 2026, the Supreme Court of the United States ruled against the current administration’s use of the International Emergency Economic Powers Act (“IEEPA”) to impose certain tariffs levied since February 2025. Pursuant to a court order on March 4, 2026 from the U.S. Court of International Trade (“CIT”) directing the refund of such tariffs, including applicable interest, on April 20, 2026, U.S. Customs and Border Protection (“CBP”) launched the Consolidated Administration and Processing of Entries (“CAPE”) system to facilitate refund claims, to which we have successfully submitted our refund claim. We received approximately $129.7 million in tariff refunds from the U.S. Department of Treasury during the second quarter of fiscal 2027. As of July 31, 2026, we have a tariff refund receivable remaining of approximately $9.8 million, which is included within prepaid expenses and other current assets in our condensed consolidated balance sheets. The timing of cash receipts for our remaining tariff refund claim remains dependent upon the processing of refund claims by CBP and the U.S. Department of Treasury.
Following the Supreme Court ruling, the current administration imposed a global tariff of 10% effective February 24, 2026, under Section 122 of the Trade Act of 1974. The Section 122 tariff expired on July 24, 2026 following the expiration of the 150-day period authorized under Section 122. On May 7, 2026, the CIT ruled that the Section 122 tariffs exceeded the President’s authority. The government appealed the CIT’s decision, and the U.S. Court of Appeals for the Federal Circuit stayed the CIT’s judgment pending resolution of the appeal.
Effective July 24, 2026, the Office of the United States Trade Representative (“USTR”) imposed additional tariffs under Section 301 of the Trade Act of 1974 on products imported from numerous countries. Subject to certain product exemptions, these tariffs include additional duties of 12.5% on products from China and Vietnam and 10% on products from Bangladesh. USTR also continues to pursue other Section 301 investigations involving various countries, including China, Vietnam and Bangladesh, which could result in additional tariffs or other trade restrictions.
While the elimination of IEEPA tariffs is expected to have a favorable impact on gross margin, the Section 301 tariffs that became effective in July 2026, as well as any additional tariffs or trade restrictions that may be imposed in the future, may
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offset such benefits and could adversely affect our financial results. We continue to monitor these changing tariffs and trade restrictions. We are taking steps to mitigate the impact of new and increased tariffs by working with our long-standing vendors to participate in the increased costs, increasing prices where possible and continuing to look for alternative sourcing options.
Industry Trends
Significant trends that affect the apparel industry include retail chains closing unprofitable stores, an increased focus by retail chains and others on expanding digital sales and providing convenience-driven fulfillment options, the continued consolidation of retail chains and the desire on the part of retailers to consolidate vendors supplying them.
We distribute our products through multiple channels, including online through retail partners such as macys.com, bloomingdales.com, nordstrom.com and dillards.com, each of which operates a significant online business. In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos. We also distribute apparel and other products directly to consumers through our own DKNY, Karl Lagerfeld and Vilebrequin retail stores, as well as through our digital sites for our DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin and Wilsons Leather brands. As sales of apparel through digital channels continue to increase, we are developing additional digital marketing initiatives on both our own websites and third party websites and through social media. We are investing in digital personnel, marketing, logistics, planning, distribution and other strategic opportunities to expand our digital footprint.
A number of retailers have experienced financial difficulties, which in some cases have resulted in bankruptcies, liquidations and/or store closings, such as the recent bankruptcy filing by Saks Global. The financial difficulties of a retail customer of ours could result in reduced business with that customer. We may also assume higher credit risk relating to receivables of a retail customer experiencing financial difficulty that could result in higher reserves for doubtful accounts or increased write-offs of accounts receivable. We attempt to mitigate credit risk from our customers by closely monitoring accounts receivable balances and shipping levels, as well as the ongoing financial performance and credit standing of customers. We may also obtain credit insurance in certain circumstances to further mitigate credit risk.
Retailers are seeking to differentiate their offerings by devoting more resources to the development of exclusive products, whether by focusing on their own private label products or on products produced exclusively for a retailer by a national brand manufacturer. Exclusive brands are only made available to a specific retailer. As a result, customers loyal to their brands can only find them in the stores of that retailer.
We have attempted to respond to general trends in our industry by continuing to focus on selling products with recognized brand equity, by attention to design, quality and value and by improving our sourcing capabilities. We have also pursued several strategic opportunities, such as (i) our purchase of the interests not previously owned by us that resulted in Karl Lagerfeld becoming our wholly-owned subsidiary, (ii) new license agreements entered into by us, such as our recent license agreements for the Halston, Champion, Converse, BCBG and French Connection brands and (iii) our formation of a joint venture with WHP which acquired Marc Jacobs Holdings, LLC. Our actions added to our portfolio of licensed and proprietary brands and helped diversify our business by adding new product lines and expanding distribution channels. We believe that our broad distribution capabilities help us to respond to the various shifts by consumers between distribution channels and that our operational capabilities will enable us to continue to be a vendor of choice for our retail partners.
Calvin Klein and Tommy Hilfiger Licenses
The sale of licensed products is an important part of our business. Net sales of products under the Calvin Klein and Tommy Hilfiger brands constituted approximately 28.0% of our net sales in fiscal 2026 and approximately 34.0% of our net sales in fiscal 2025.
Our licenses for Calvin Klein and Tommy Hilfiger products expire on a staggered basis, with expirations that began on December 31, 2024 and continue through December 31, 2026. Unless we are able to increase the sales of our other products, acquire new businesses and/or enter into other license agreements covering different products, the staggered
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expirations of the Calvin Klein and Tommy Hilfiger license agreements will cause a significant decrease in our net sales and have a material adverse effect on our results of operations.
We continue to take strategic actions to mitigate the loss of this business by continuing to develop and expand our owned brands, such as DKNY, Donna Karan and Karl Lagerfeld, through new product lines, marketing initiatives, international growth, executing on digital channel business opportunities and our recent formation of a joint venture with WHP which acquired Marc Jacobs Holdings, LLC. Additionally, we also recognize higher gross profit percentages on sales of our owned brands. We also seek to expand sales in our go-forward portfolio of licensed brands, including our team sports business, as well as through our recent licenses for the Halston and Champion brands that launched in fiscal 2025, the Converse and BCBG brands that launched in fiscal 2026 and the French Connection brand that launched in fiscal 2027.
The Calvin Klein and Tommy Hilfiger licenses that expired in fiscal 2026 or have expirations in our fiscal 2027 year contributed the following net sales to our total net sales in fiscal 2026:
Portion of Total G-III Fiscal 2026 Net Sales | ||||||
$ | % | |||||
(in thousands, except for percentages) | ||||||
Calvin Klein and Tommy Hilfiger license expirations by date: | ||||||
December 31, 2025 | 435,642 | 15 | % | |||
December 31, 2026 | 391,561 | 14 | % | |||
Litigation with PVH Corp.
On June 13, 2025, the Company filed a complaint against PVH Corp. and two of its subsidiaries (“Defendants”) in the New York County Commercial Division of the Supreme Court of the State of New York for breach of contract, breach of the implied covenant of good faith and fair dealing, and tortious interference with contract arising out of the unreasonable denial of the Company’s request to extend the Calvin Klein and Tommy Hilfiger licenses for the women’s suits category for an additional three-year period and other actions taken by Defendants that undermined the Company’s ability to perform under Calvin Klein and Tommy Hilfiger license agreements and subjected the Company to contractual penalties. On July 30, 2025, Calvin Klein, Inc. and Tommy Hilfiger Licensing LLC filed their own complaint against G-III in the same court alleging breaches of the license agreements between the parties. On April 30, 2026, in response to the Company’s amended complaint, Defendants filed counterclaims alleging breaches of the license agreements. The Company has moved to dismiss those counterclaims. On June 18, 2026, the Company filed a motion seeking leave to file a second amended complaint to add allegations that the PVH parties tortiously interfered with the Company’s subsidiaries’ agreements with AWWG, and that the PVH parties breached the confidentiality provisions in the license agreements between the parties.
The Company believes that Calvin Klein, Inc. and Tommy Hilfiger Licensing LLC’s complaint and counterclaims are without merit, and the Company intends to vigorously defend against these actions. Due to the uncertainty inherent in any litigation, the Company is unable to estimate any reasonably possible loss, or range of loss, with respect to this matter.
Tax Laws and Regulations
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The legislation has multiple effective dates, with certain provisions becoming effective in 2025 and others implemented through 2029. The OBBBA makes key elements of the Tax Cuts and Jobs Act permanent, including 100% bonus depreciation, and makes modifications to the international tax framework. We recognized the impact of the OBBBA in our second fiscal quarter ended July 31, 2025, the period in which the legislation was enacted. The impact of the OBBBA was immaterial to our provision for income taxes for the three and six months ended July 31, 2026 and our condensed consolidated balance sheet as of July 31, 2026.
In December 2022, the Council of the European Union (“EU”) announced that EU member states reached an agreement to implement the minimum tax component of the Organization for Economic Co-operation and Development’s (“OECD”) international tax reform initiative, known as Pillar Two. The Pillar Two Model Rules provide for a global minimum tax of 15% for multinational enterprise groups (“MNEs”) and were effective beginning fiscal 2025. In January 2026, the OECD
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introduced a side-by-side agreement in which U.S.-parented MNEs are exempt from certain aspects of the global minimum tax. This agreement is effective for our fiscal year ending January 31, 2027, but is subject to adoption by each jurisdiction. While these rules are not expected to have a material impact on our effective tax rate or financial results for fiscal 2027, we continue to monitor our operations and evolving tax legislation in the jurisdictions in which we operate.
Inflation and Interest Rates
Inflationary pressures have impacted the entire economy, including our industry. Recent high rates of inflation, including increased fuel and food prices and the enactment of additional tariffs by the United States government, have led to a softening of consumer demand, increased promotional activity in the apparel categories we sell and higher pricing of our products. Ongoing inflation may lead to further challenges to increase our sales and may also negatively impact our cost structure and labor costs in the future.
Interest rates in the United States and certain international markets remain elevated, continuing to influence consumer borrowing costs and discretionary spending patterns. Higher interest rates increase the cost of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending. Volatility in interest rates may adversely affect our business or our customers. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, or at all.
Foreign Currency Fluctuation
Our consolidated operations are impacted by the relationships between our reporting currency, the U.S. dollar, and those of our non-United States subsidiaries whose functional/local currency is other than the U.S. dollar, primarily the euro. Volatility in the global foreign currency exchange rates may have a negative impact on the reported results of certain of our non-United States subsidiaries in the future, when translated to the U.S. dollar.
International Conflicts
We are monitoring the direct and indirect impacts from the military conflicts in Ukraine and the Middle East. These international conflicts and the continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest have disrupted commerce and intensified concerns regarding the United States and world economies. The imposition of additional sanctions by the United States and/or foreign governments, as well as the sanctions already in place, could lead to restrictions related to sales and our supply chain for which the financial impact is uncertain. In addition, the continuation or escalation of these international conflicts, including the potential for additional countries to declare war against each other, may lead to further, broader unfavorable macroeconomic conditions, including unfavorable foreign exchange rates, increases in fuel prices, food shortages, a weakening of the worldwide economy, lower consumer demand and volatility in financial markets. The possible effects of these international conflicts could have a material adverse effect on our business and our results of operations.
Supply Chain
The global supply chain continues to be negatively impacted by various factors, including the ongoing disruptions in the Middle East, the various tariffs imposed across all countries and recent typhoon activity in Asia. The latest developments related to Iran have added further uncertainty to our supply chain operations. Conflicts in the Middle East continue to cause major disruptions to global supply chains by impacting critical shipping routes through the Suez Canal and Red Sea for cargo, adding time and cost to shipments. To date, our business has not been significantly impacted by such disruptions; however, we have experienced shipping delays impacting the timing of inventory receipts. These delays have not resulted in a significant loss of customer sales. If there is further escalation of these conflicts, it may negatively impact the timely receipt of inventory as well as increase our shipping costs.
The imposition of tariffs by the U.S. government and certain foreign jurisdictions, along with geopolitical tensions, has created an uncertain environment for global trade. As the impact of new or increased tariffs, quotas, embargoes or other trade barriers that could impact our supply chain and cost structure is dependent on global trade negotiations, we continue to monitor these changing tariffs and trade restrictions. We source substantially all of our products from a global network of independent, third-party manufacturers, primarily located in Asia.
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Recent typhoon activity across China and Vietnam has created significant disruption to ocean shipping throughout Asia. Repeated port closures and temporary terminal suspensions have interrupted vessel schedules, reduced terminal productivity and created vessel and container backlogs at several major export gateways. Shanghai and Ningbo have been particularly affected, as has the Hai Phong region of Vietnam. The series of typhoons has reduced schedule reliability across ocean shipping networks in Asia and is expected to result in longer transit times, an increased risk of cargo rollover, equipment and space constraints and downstream delays at destination ports as displaced vessel schedules move through the global network. Recovery at the most congested Chinese ports could take several weeks.
We will continue to monitor supply chain challenges and coordinate with our partners to divert or adjust routes and destinations accordingly to ensure timely delivery of our product.
Results of Operations
Three months ended July 31, 2026 compared to three months ended July 31, 2025
Net sales for the three months ended July 31, 2026 decreased to $554.1 million from $613.3 million in the same period last year. Net sales of our segments are reported before intercompany eliminations.
Net sales of our wholesale operations segment decreased to $530.8 million for the three months ended July 31, 2026 from $589.0 million in the comparable period last year. We sell a broad range of products at varying price points and deliver newly designed products each year. In addition, we have certain revenues, primarily from royalty revenues, that are not based on our shipping units of product. In total, our decrease in sales was driven by a decrease in the number of units we shipped, partially offset by higher average prices. The decrease in net sales of our wholesale operations segment was primarily the result of decreases in net sales of $95.2 million of our Calvin Klein and Tommy Hilfiger licensed products, due in part to several expired licenses that are not part of our go-forward business. These decreases were partially offset by increases in net sales of $28.9 million of our Donna Karan products and our BCBG, Converse and French Connection licensed products. The increase in sales of Donna Karan products was primarily related to the dresses, suits and sportswear categories.
Net sales of our retail operations segment decreased to $39.5 million for the three months ended July 31, 2026 from $41.1 million in the same period last year. The decrease in net sales in our retail operations segment was primarily the result of the transition of our G.H. Bass digital business to a licensee during the current fiscal year. The number of retail stores operated by us was 47 at both July 31, 2026 and 2025. Comparable store sales, which include both stores and digital channels, increased for Donna Karan and DKNY compared to the same period in the prior year.
Gross profit was $250.4 million, or 45.2% of net sales, for the three months ended July 31, 2026, compared to $250.5 million, or 40.8% of net sales, in the same period last year. The gross profit percentage in our wholesale operations segment was 43.3% in the three months ended July 31, 2026 compared to 38.9% in the same period last year. The gross profit percentage in the current year period was positively impacted by price increases as well as a shift in product mix to owned brands in which we recognize higher gross profit percentages compared to licensed brands. Additionally, the gross profit percentage in the prior year period was negatively impacted by increased tariffs. The gross profit percentage in our retail operations segment was 50.6% for the three months ended July 31, 2026 compared to 52.4% for the same period last year. The gross profit percentage in the current year period was negatively impacted by increased promotional activity.
Selling, general and administrative expenses increased to $231.4 million in the three months ended July 31, 2026 from $226.8 million in the same period last year. Selling, general and administrative expenses of our wholesale operations segment increased to $210.4 million in the three months ended July 31, 2026 from $205.9 million in the comparable period last year. The increase in expenses was primarily due to increases of (i) $6.3 million in professional fees related to our strategic joint venture to acquire the Marc Jacobs operating business as well as legal fees related to other matters and (ii) $5.1 million in compensation expenses, primarily due to an increase in salaries and share-based compensation expense. These increases were partially offset by a decrease of $6.9 million in third-party warehouse expenses resulting from shipping fewer units of inventory. Selling, general and administrative expenses of our retail operations segment were $21.0 million in the three months ended July 31, 2026 compared to $20.9 million in the same period last year.
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Depreciation and amortization was $8.2 million for the three months ended July 31, 2026 compared to $7.3 million in the same period last year.
Other loss was $2.7 million in the three months ended July 31, 2026 compared to other loss of $0.7 million in the same period last year. Other loss in the current period consisted of $0.9 million of foreign currency loss during the current year period compared to $1.3 million of foreign currency income in the same period last year. Our foreign currency income and losses are primarily related to the euro. Additionally, other loss in the current period consisted of a $2.4 million loss from unconsolidated affiliates during the current year period compared to $2.0 million of losses from unconsolidated affiliates in the same period last year.
Interest and financing charges, net, for the three months ended July 31, 2026 resulted in income of $6.0 million compared to income of $0.3 million in the same period last year. The increase in interest income was primarily due to $4.2 million of interest income received from refunded IEEPA tariffs and a $1.3 million increase in investment income from having a larger cash position in the current period compared to the prior year’s period.
Income tax benefit was $6.1 million for the three months ended July 31, 2026 compared to income tax expense of $5.0 million for the same period last year. We recognized a negative effective tax rate of 43.5% in the current year’s quarter compared to a positive effective tax rate of 31.2% in last year’s comparable quarter. The negative effective tax rate in the current year period was driven by discrete items in the quarter, principally the release of a valuation allowance related to prior year impairments that have been determined to be deductible for tax purposes.
Six months ended July 31, 2026 compared to six months ended July 31, 2025
Net sales for the six months ended July 31, 2026 decreased to $1.09 billion from $1.20 billion in the same period last year. Net sales of our segments are reported before intercompany eliminations.
Net sales of our wholesale operations segment decreased to $1.05 billion for the six months ended July 31, 2026 from $1.15 billion in the comparable period last year. We sell a broad range of products at varying price points and deliver newly designed products each year. In addition, we have certain revenues, primarily from royalty revenues, that are not based on our shipping units of product. In total, our decrease in sales was driven by a decrease in the number of units we shipped, partially offset by higher average prices. The decrease in net sales of our wholesale operations segment was primarily the result of decreases in net sales of $186.3 million of our Calvin Klein and Tommy Hilfiger licensed products, due in part to several expired licenses that are not part of our go-forward business, as well as in DKNY products. These decreases were partially offset by increases in net sales of $71.8 million of our Donna Karan products and our BCBG, Converse and French Connection licensed products. The increase in sales of Donna Karan products was primarily related to the dresses, suits and sportswear categories.
Net sales of our retail operations segment increased to $80.1 million for the six months ended July 31, 2026 from $77.4 million in the same period last year. The increase in sales in our retail operations segment was the result of increased sales through our Karl Lagerfeld Paris stores, DKNY stores and Donna Karan website. The number of retail stores operated by us was 47 at both July 31, 2026 and 2025. Comparable store sales, which include both stores and digital channels, increased for Karl Lagerfeld Paris, Donna Karan and DKNY compared to the same period in the prior year.
Gross profit was $598.1 million, or 54.9% of net sales, for the six months ended July 31, 2026, compared to $497.0 million, or 41.5% of net sales, in the same period last year. The gross profit percentage in our wholesale operations segment was 53.4% in the six months ended July 31, 2026 compared to 39.6% in the same period last year. The gross profit percentage in the current year period was positively impacted by a benefit of $102.8 million recognized in cost of goods sold related to the recovery of previously incurred IEEPA tariffs on inventory sold in the prior year. Excluding the impact of the IEEPA tariff benefit, the gross profit percentage in our wholesale operations segment was 43.6% for the six months ended July 31, 2026, which was positively impacted by price increases as well as a shift in product mix to owned brands in which we recognize higher gross profit percentages compared to licensed brands. The gross profit percentage in our retail operations segment was 49.3% for the six months ended July 31, 2026 compared to 52.9% for the same period last year. The gross profit percentage in the current year period was negatively impacted by increased promotional activity.
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Selling, general and administrative expenses increased to $486.7 million in the six months ended July 31, 2026 from $458.3 million in the same period last year. Selling, general and administrative expenses of our wholesale operations segment increased to $444.8 million in the six months ended July 31, 2026 from $415.6 million in the comparable period last year. The increase in expenses was primarily due to increases of (i) $22.5 million in compensation expenses, primarily due to an increase in incentive compensation, salaries and share-based compensation expense and (ii) $12.7 million in professional fees related to our strategic joint venture to acquire the Marc Jacobs operating business as well as legal fees related to other matters. These increases were partially offset by a decrease of $11.2 million in third-party warehouse expenses resulting from shipping fewer units of inventory. Selling, general and administrative expenses of our retail operations segment were $41.9 million during the six months ended July 31, 2026 compared to $42.7 million in the same period last year.
Depreciation and amortization was $15.4 million for the six months ended July 31, 2026 compared to $13.9 million in the same period last year.
Other loss was $3.5 million in the six months ended July 31, 2026 compared to other income of $2.8 million in the same period last year. Other loss in the current period consisted of $1.6 million of foreign currency loss during the current year period compared to $3.2 million of foreign currency income in the same period last year. Our foreign currency income and losses are primarily related to the euro. Additionally, other loss in the current period consisted of $2.4 million of losses from unconsolidated affiliates during the current year period compared to $0.4 million of losses from unconsolidated affiliates in the same period last year.
Interest and financing charges, net, for the six months ended July 31, 2026 resulted in income of $7.1 million compared to expense of $0.2 million in the same period last year. The increase in interest income was primarily due to $4.2 million of interest income received from refunded IEEPA tariffs and a $2.5 million increase in investment income from having a larger cash position in the current period compared to the prior year’s period.
Income tax expense was $13.0 million for the six months ended July 31, 2026 compared to $8.7 million for the same period last year. Our effective tax rate decreased to 13.0% in the current year’s period from 31.7% in last year’s comparable period. The lower effective tax rate in the current year period was driven by discrete items in the period, principally the tariff refund that was taxed at a lower rate and the release of a valuation allowance related to prior year impairments that have been determined to be deductible for tax purposes.
Liquidity and Capital Resources
Cash Availability
We rely on our cash flows generated from operations, cash and cash equivalents and the borrowing capacity under our revolving credit facility to meet the cash requirements of our business. The cash requirements of our business are primarily related to the seasonal buildup in inventories, compensation paid to employees, occupancy, payments to vendors in the normal course of business, capital expenditures, interest payments on debt obligations, payments of cash dividends, income tax payments and acquisitions. We have also used cash to repurchase our shares and make strategic investments.
As of July 31, 2026, we had cash and cash equivalents of $529.2 million and availability under our revolving credit facility of approximately $470.0 million. As of July 31, 2026, we were in compliance with all covenants under our revolving credit facility.
On August 18, 2026, our Board of Directors declared a cash dividend of $0.10 per share. The dividend will be paid on September 29, 2026 to all stockholders of record as of September 15, 2026.
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Tariff Refund
During the second quarter of fiscal 2027, we received approximately $129.7 million from the U.S. Department of Treasury related to our IEEPA tariff refund claim and approximately $4.2 million of statutory interest. As of July 31, 2026, approximately $9.8 million of our original tariff refund claim remains outstanding and is expected to be processed as part of CBP’s Phase 2 refund process.
Third Amended and Restated ABL Credit Agreement
On June 4, 2024, our subsidiaries, G-III Leather Fashions, Inc., Riviera Sun, Inc., AM Retail Group, Inc. and The Donna Karan Company Store LLC (collectively, the “Borrowers”), entered into the third amended and restated credit agreement (the “Third ABL Credit Agreement”) with the lenders named therein and with JPMorgan Chase Bank, N.A., as administrative agent. The Third ABL Credit Agreement is a five-year senior secured asset-based revolving credit facility providing for borrowings in an aggregate principal amount of up to $700.0 million. We and certain of our wholly-owned domestic subsidiaries, as well as G-III Apparel Canada ULC (collectively, the “Guarantors”), are guarantors under the Third ABL Credit Agreement.
The Third ABL Credit Agreement amends and restates the Second Amended Credit Agreement, dated as of August 7, 2020 (as amended, supplemented or otherwise modified from time to time prior to June 4, 2024, the “Second Credit Agreement”), by and among the Borrowers and the Guarantors, the lenders from time-to-time party thereto, and JPMorgan Chase Bank, N.A., in its capacity as the administrative agent thereunder. The Second Credit Agreement provided for borrowings of up to $650 million and was due to expire on August 7, 2025. The Third ABL Credit Agreement extends the maturity date to June 2029, subject to a springing maturity date as defined within the credit agreement.
Amounts available under the Third ABL Credit Agreement are subject to borrowing base formulas and overadvances as specified in the Third ABL Credit Agreement. Borrowings bear interest, at the Borrowers’ option, at Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.50% to 2.00%, or the alternate base rate plus a margin of 0.50% to 1.00% (defined as the greatest of (i) the “prime rate” of JPMorgan Chase Bank, N.A. from time to time, (ii) the federal funds rate plus 0.5% and (iii) SOFR for a borrowing with an interest period of one month plus 1.00%), with the applicable margin determined based on the Borrowers’ average daily availability under the Third ABL Credit Agreement. The Third ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors. As of July 31, 2026, interest under the Third ABL Credit Agreement was being paid at an average rate of 7.25% per annum.
In addition to paying interest on any outstanding borrowings under the Third ABL Credit Agreement, we are required to pay a commitment fee to the lenders under the credit agreement with respect to the unutilized commitments. The commitment fee accrues at a tiered rate equal to 0.375% per annum on the average daily amount of the available commitments when the average usage is less than 50% of the total available commitments and decreases to 0.25% per annum on the average daily amount of the available commitments when the average usage is greater than or equal to 50% of the total available commitments.
The Third ABL Credit Agreement contains covenants that, among other things, restrict our ability to, subject to specified exceptions, incur additional debt; incur liens; sell or dispose of certain assets; merge with other companies; liquidate or dissolve the Company; acquire other companies; make loans, advances, or guarantees; and make certain investments. In certain circumstances, the revolving credit facility also requires us to maintain a fixed charge coverage ratio, as defined in the agreement, not less than 1.00 to 1.00 for each period of twelve consecutive fiscal months. As of July 31, 2026, we were in compliance with these covenants.
As of July 31, 2026, we had no borrowings outstanding under the Third ABL Credit Agreement. The Third ABL Credit Agreement also includes amounts available for letters of credit. As of July 31, 2026, there were no outstanding trade letters of credit and $2.5 million of standby letters of credit.
We have a total of $6.3 million in debt issuance costs related to our Third ABL Credit Agreement. As permitted under ASC 835, the debt issuance costs have been deferred and are presented as an asset which is amortized ratably over the term of the Third ABL Credit Agreement. Total debt issuance costs, net of amortization, were $3.6 million, $4.8 million and $4.2 million as of July 31, 2026, July 31, 2025 and January 31, 2026, respectively.
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Unsecured Loans
Several of the Company’s foreign entities borrow funds under various unsecured loans to provide funding for operations in the normal course of business. In the aggregate, the Company is currently required to make quarterly installment payments of principal in the amount of €0.8 million under these loans. Interest on the outstanding principal amount of the unsecured loans accrues at a fixed rate equal to 0% to 5.0% per annum, payable on either a quarterly or monthly basis. As of July 31, 2026, we had an aggregate outstanding balance of €1.9 million ($2.2 million) under these various unsecured loans.
Overdraft Facilities
Certain of our foreign entities entered into overdraft facilities that allow for applicable bank accounts to be in a negative position up to a certain maximum overdraft. These uncommitted overdraft facilities with HSBC Bank allow for an aggregate maximum overdraft of €10 million. Interest on drawn balances accrues at a rate equal to the EURIBOR plus a margin of 1.75% per annum, payable quarterly. The facility may be cancelled at any time by us or HSBC Bank. Certain of our foreign entities have also entered into several state backed overdraft facilities with UBS Bank in Switzerland for an aggregate of CHF 4.7 million at varying interest rates of 0% to 0.5%. As of July 31, 2026, we had an aggregate outstanding balance of €0.9 million ($1.0 million) under these various facilities.
Foreign Credit Facilities
KLH has a credit agreement with ABN AMRO Bank N.V. with a credit limit of €15.0 million which is secured by specified assets of KLH. Borrowings bear interest at the EURIBOR plus a margin of 1.7%. A subsidiary of Vilebrequin has a credit agreement with CIC Bank with a credit limit of €5.0 million. Borrowings bear interest at the Euro Short-Term Rate plus a margin of 1.75%. As of July 31, 2026, we had an aggregate outstanding balance of €4.0 million ($4.6 million) in borrowings outstanding under these credit facilities.
Outstanding Borrowings
Our primary operating cash requirements are to fund our seasonal buildup in inventories and accounts receivable, primarily during the second and third fiscal quarters each year. The primary sources to meet our operating cash requirements have been borrowings under the revolving credit facility and cash generated from operations.
We had no borrowings outstanding under our Third ABL Credit Agreement at July 31, 2026 and 2025, respectively. Our contingent liability under open letters of credit was approximately $2.5 million and $3.3 million at July 31, 2026 and 2025, respectively. We had an aggregate of €1.9 million ($2.2 million) and €4.4 million ($5.2 million) outstanding under our various unsecured loans as of July 31, 2026 and 2025, respectively. We had €0.9 million ($1.0 million) and €3.5 million ($4.1 million) outstanding under our overdraft facilities as of July 31, 2026 and 2025, respectively. We had €4.0 million ($4.6 million) and €5.3 million ($6.2 million) outstanding under our foreign credit facilities as of July 31, 2026 and 2025, respectively.
Supply Chain Finance Program
We have a voluntary supply chain finance program (the “SCF Program”) administered through a third-party platform. Our payment obligations confirmed under the SCF Program are due to a financial intermediary that will remit payment to our suppliers. The SCF Program also provides participating suppliers with the option to sell their receivables due from us, at their sole discretion, to a third-party financial institution at terms negotiated between the supplier and the financial institution. We are not a party to the agreements between the suppliers and the financial institution and have no economic interest in a supplier’s decision to sell a receivable. Our payment obligations to our suppliers, including the amounts due and payment terms, which generally do not exceed 75 days, are not impacted by a supplier’s participation in the SCF Program. See Note 8 – “Supply Chain Finance Program” in the Notes to Condensed Consolidated Financial Statements for further discussion of the SCF Program.
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Share Repurchase Program
In April 2026, our Board of Directors authorized an increase in the number of shares covered by our share repurchase program to an aggregate amount of 10,000,000 shares. Pursuant to this program, during the six months ended July 31, 2026, we acquired 236,724 shares of our common stock for an aggregate purchase price of $7.9 million, excluding excise tax. The timing and actual number of shares repurchased, if any, will depend on a number of factors, including market conditions and prevailing stock prices, and are subject to compliance with certain covenants contained in our loan agreement. Share repurchases may take place on the open market, in privately negotiated transactions or by other means, and would be made in accordance with applicable securities laws. As of July 31, 2026, we had 9,763,276 shares remaining that are authorized for purchase under this program. As of September 3, 2026, we had 42,876,508 shares of common stock outstanding.
Cash from Operating Activities
We generated $178.7 million in cash from operating activities during the six months ended July 31, 2026, representing an increase of $9.9 million from $168.9 million of cash generated from operating activities during the six months ended July 31, 2025. This increase was primarily driven by an increase in our net income of $68.0 million, which includes the $126.4 million reduction in cost of goods sold and $4.2 million of interest income related to the IEEPA tariff refund, partially offset by a change in operating assets and liabilities of $53.2 million. The $53.2 million decrease in changes in operating assets and liabilities balances was primarily driven by the following:
| ● | Accounts payable, accrued expenses and other liabilities increased $50.6 million in the current year period compared to an increase of $170.5 million in the same period last year as a result of decreased inventory purchases and accrued royalties in the current year period due to expired licenses, partially offset by a higher bonus accrual in the current year period. Additionally, accounts payable increased in the prior year due to the implementation of our SCF program which extended payment terms to our suppliers. |
| ● | Accounts receivable decreased $133.6 million in the current year period compared to a decrease of $149.8 million in the same period last year as a result of a decline in net sales in the current year compared to the prior year resulting from expired licenses. |
| ● | Inventories increased $95.0 million in the current year period compared to an increase of $161.7 million in the prior year period as a result of decreased inventory purchases in the current year period due to expired licenses. |
Cash from Investing Activities
We used $17.6 million of cash in investing activities during the six months ended July 31, 2026 as a result of capital expenditures primarily related to leasehold improvements and computer software expenditures.
Cash from Financing Activities
Net cash used in financing activities was $36.4 million during the six months ended July 31, 2026 primarily as a result of $16.3 million of taxes paid in connection with net share settlements of vested stock grants, $8.5 million of cash dividends paid to common stockholders, $7.9 million used to repurchase 236,724 shares of our common stock under our share repurchase program, excluding excise tax and net repayments of $3.7 million under our various foreign credit facilities.
Critical Accounting Policies
Our discussion of results of operations and financial condition relies on our consolidated financial statements that are prepared based on certain critical accounting policies that require management to make judgments and estimates that are subject to varying degrees of uncertainty. We believe that investors need to be aware of these policies and how they impact our financial statements as a whole, as well as our related discussion and analysis presented herein. While we believe that these accounting policies are based on sound measurement criteria, actual future events can, and often do, result in outcomes that can be materially different from these estimates or forecasts.
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The accounting policies and related estimates described in our Annual Report on Form 10-K for the year ended January 31, 2026 are those that depend most heavily on these judgments and estimates. As of July 31, 2026, there have been no material changes to our critical accounting policies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There are no material changes to the disclosure made with respect to these matters in our Annual Report on Form 10-K for the year ended January 31, 2026.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed only to provide “reasonable assurance” that the controls and procedures will meet their objectives. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.
As of the end of the period covered by this report, our management, including our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, because of a material weakness in the Company’s internal control over financial reporting as described below, our disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure, were not effective in making known to them material information relating to G-III required to be included in this report.
Material Weakness in Internal Control
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis.
Within the KLH subsidiary, which represented approximately 9% of the total net sales of the Company for fiscal 2026, the Company identified a material weakness in the operating effectiveness of controls related to information technology general controls (“ITGCs”) over business applications that support the Company’s financial reporting processes. Automated and manual business process controls that are dependent on the affected ITGCs were also deemed ineffective because they rely upon information and configurations from the affected IT systems.
We concluded that the material weakness did not result in any material misstatements in our financial statements or disclosures in the current year. Based on additional procedures and post-closing review, management concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.
Remediation Measures
Management, with oversight from the Audit Committee of the Board of Directors, is performing remedial actions and has developed a full plan designed to remediate these deficiencies. This plan includes, among other items, additional risk assessment procedures over information technology, enhancements to controls, and additional training related to the
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operational effectiveness of control procedures. These deficiencies will not be considered remediated until the remediation plan is complete, and controls have been operational for a sufficient period of time and successfully tested.
Changes in Internal Control over Financial Reporting
Other than the material weakness described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended July 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1A. Risk Factors.
In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors contained in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended January 31, 2026 (the “Annual Report”), which could materially affect our business, financial condition and/or future results. Other than the risk factors set forth below relating to our acquisition of the Marc Jacobs business, which was completed on September 1, 2026, there have been no material changes in our risk factors from those set forth in the Annual Report. The risks described in the Annual Report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or future results.
Our interest in the Marc Jacobs intellectual property is held through a non-controlled joint venture, and our ability to operate the Marc Jacobs business depends on a license agreement that is terminable under certain circumstances.
The Marc Jacobs Acquisition was structured through IPCo, a joint venture in which we own 50% of the membership interests and an affiliate of WHP Global (“WHP”) owns the remaining 50%. IPCo retained ownership of the Marc Jacobs intellectual property. We operate the Marc Jacobs business pursuant to a license from IPCo that grants an exclusive right to use the Marc Jacobs brands in the United States, Canada, Mexico and Western Europe for specified product categories. The initial term of the license agreement runs through December 2041, and we have 10 successive options to renew the license agreement for periods of 5 years. The license agreement is terminable by IPCo if we fail to make required payments or otherwise materially breach the agreement, in each case subject to an opportunity to cure within a specified period of time.
IPCo is governed by a board of managers initially consisting of five managers, with two managers appointed by us and three appointed by WHP, which is subject to change in the future based on the relative ownership percentages of us and WHP in IPCo, and other circumstances provided in the amended and restated operating agreement of IPCo entered into at the closing. Subject to those potential changes or circumstances, WHP controls the board of IPCo. Certain significant decisions, including amendments to the operating agreement, mergers, acquisitions, dispositions, incurrence of indebtedness above certain thresholds, related party transactions and bankruptcy, require approval of both members for so long as they continue to own certain ownership percentages. Disagreements with WHP regarding the management or direction of IPCo or the Marc Jacobs intellectual property could adversely affect our ability to operate the Marc Jacobs business effectively. In addition, we and WHP generally may not transfer our membership interests in IPCo prior to the third anniversary of the closing, other than to permitted transferees or with the prior written consent of the other member, and any transfer after the third anniversary is subject to a right of first offer and tag along right in favor of the other party, which may limit our ability to exit or monetize our investment on favorable terms.
We may be unable to successfully transition and operate the Marc Jacobs business, and we may not realize the anticipated benefits of the Marc Jacobs Acquisition.
We are required to transition the Marc Jacobs operating business away from the infrastructure and support systems historically provided by LVMH. Pursuant to a Transition Services Agreement entered into at the closing, LVMH and/or third-party providers will provide certain transition services to Marc Jacobs International, L.L.C. and its subsidiaries for a limited period following the closing. Under the Transition Services Agreement, we have guaranteed the due, prompt and full performance by Marc Jacobs International and its subsidiaries of all of their payment and indemnification obligations
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thereunder. Our ability to realize the expected benefits of the Marc Jacobs Acquisition is subject to a number of risks, including:
| ● | our ability to build standalone operational capabilities for functions historically provided by LVMH prior to the expiration of the transition services; and |
| ● | difficulties in retaining key creative, design and management personnel who may be critical to the brand’s identity and market position. |
We have incurred, and expect to continue to incur, substantial expenses in connection with the Marc Jacobs Acquisition and the transition of the business. Even if we are able to successfully transition and operate the Marc Jacobs business, the anticipated benefits may not be realized fully, or at all, or may take longer to realize than expected, which could adversely impact our business, results of operations and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table provides information with respect to the Company’s common stock that the Company repurchased during the three months ended July 31, 2026. Included in this table are shares withheld during the three months ended July 31, 2026 to satisfy tax withholding requirements in connection with stock awards.
Date Purchased | Total Number of Shares Purchased (1) | Average Price Paid Per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Program (2) | Maximum Number of Shares that may yet be Purchased Under the Program (2) | ||||||
May 1 - May 31, 2026 | — | $ | — | — | 10,000,000 | |||||
June 1 - June 30, 2026 | 552,871 | 34.43 | 82,644 | 9,917,356 | ||||||
July 1 - July 31, 2026 | 154,080 | 33.59 | 154,080 | 9,763,276 | ||||||
706,951 | $ | 34.25 | 236,724 | 9,763,276 | ||||||
| (1) | Included in this table are 470,227 shares withheld during June 2026 in connection with the settlement of vested restricted stock units to satisfy tax withholding requirements. Our 2015 Long-Term Incentive Plan provides that shares withheld are valued at the closing price per share on the date withheld. |
| (2) | In April 2026, our Board of Directors reapproved our previously authorized share repurchase program and increased the number of shares remaining under that program to 10,000,000 shares. This program has no expiration date. Repurchases under the program may be made from time to time through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as we deem appropriate. |
Item 5. Other Information
During the three months ended July 31, 2026,
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Item 6. Exhibits.
3.1 | Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, dated November 3, 1989). |
3.1(a) | |
3.1(b) | |
3.1(c) | |
3.2 | |
10.1 | |
10.2 | |
10.3 | |
10.4 | |
31.1* | |
31.2* | |
32.1** | |
32.2** | |
101.INS* | Inline XBRL Instance Document. |
101.SCH* | Inline XBRL Schema Document. |
101.CAL* | Inline XBRL Calculation Linkbase Document. |
101.DEF* | Inline XBRL Extension Definition. |
101.LAB* | Inline XBRL Label Linkbase Document. |
101.PRE* | Inline XBRL Presentation Linkbase Document. |
104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** This certification is deemed furnished, and not filed, for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
+ Indicates a management contract.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
G-III APPAREL GROUP, LTD. | ||
Date: September 8, 2026 | By: | /s/ Morris Goldfarb |
Morris Goldfarb | ||
Chief Executive Officer | ||
Date: September 8, 2026 | By: | /s/ Neal S. Nackman |
Neal S. Nackman | ||
Chief Financial Officer | ||
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