Financial Performance and Market Reaction
G-III Apparel Group, Ltd. (NASDAQ: GIII) experienced a significant surge in its stock price on December 9, 2025. This upward movement followed the company’s third quarter fiscal 2026 earnings release and a series of positive announcements. The apparel manufacturer reported profitability for the third quarter that exceeded expectations, raised its guidance for full-year earnings, and launched its inaugural quarterly dividend program.
During market hours, shares traded at $31.25, marking an increase of $1.58 or 5.34%. This climb continued into pre-market trading, reaching $32.02, which represented a 7.92% gain. This strong performance was attributed by CEO Morris Goldfarb to the robustness of the company’s owned brand portfolio and the effectiveness of its strategies for mitigating tariff impacts.
Earnings Performance and Strategic Initiatives
G-III Apparel announced impressive results for the third quarter, ending October 31, 2025. Non-GAAP earnings per share reached $1.90, surpassing analyst estimates by $0.29. However, net sales for the quarter were $988.6 million, a 9% decrease from $1.09 billion in the same quarter of the previous year. Revenue also fell short of expectations by $21.35 million. The company reported GAAP net income of $80.6 million, or $1.84 per diluted share, a decrease from $114.8 million, or $2.55 per diluted share, in the prior year's third quarter.
CEO Morris Goldfarb highlighted that gross margins and earnings significantly exceeded projections. This outperformance was driven by the strength of the company’s current product offerings, particularly its owned brands such as DKNY, Donna Karan, and Karl Lagerfeld.
The company also benefited from a favorable sales mix of full-price items and successful efforts to manage tariff-related costs. G-III estimates the gross impact of tariffs to be approximately $135 million based on current rates. This impact has been partially offset through vendor collaboration, adjustments in sourcing strategies, and strategic price increases, leaving an unmitigated impact of roughly $65 million.
G-III Apparel maintained a robust financial standing, with total debt reduced by 95% to $10.6 million, down from $224.2 million in the previous year. The company concluded the quarter with a net cash position of $173.5 million, a significant improvement from a net debt position of $119.5 million in the comparable period last year. Inventories saw a modest increase of 3% to $547.1 million. The company continued its capital allocation strategy, repurchasing 209,851 shares for $5.4 million during the third quarter.
Revised Guidance and Dividend Program Launch
G-III Apparel substantially increased its profitability forecast for fiscal year 2026, while making a slight adjustment to its revenue expectations. The company now projects non-GAAP net income to be between $125.0 million and $130.0 million, an increase from the previous guidance of $113.0 million to $123.0 million. Diluted earnings per share are now anticipated to be in the range of $2.80 to $2.90, compared to the prior guidance of $2.55 to $2.75.
This updated earnings per share guidance compares favorably to the consensus analyst estimate of $2.70. The company expects GAAP net income to fall between $121.0 million and $126.0 million, translating to $2.72 to $2.82 per diluted share. Adjusted EBITDA guidance was raised to $208.0 million to $213.0 million, up from the previous range of $198.0 million to $208.0 million. Net sales guidance was revised to approximately $2.98 billion, down slightly from the prior expectation of $3.02 billion. This adjustment reflects a cautious assessment of the current consumer environment and anticipated tariff effects.
Despite the revised revenue outlook, the enhanced profitability guidance underscores the company’s operational efficiency and effective margin management. The projected tax rate for fiscal year 2026 is estimated at 29.5%, with net interest expense expected to be around $1.5 million.
In a significant capital allocation decision, G-III’s Board of Directors has approved the company’s first-ever quarterly dividend program. The initial dividend is set at $0.10 per share and is scheduled to be paid on December 29, 2025, to shareholders of record as of December 15, 2025.
CEO Goldfarb commented that the company’s strong financial foundation allows it to return capital directly to shareholders through the new dividend program, while simultaneously continuing to pursue strategic growth initiatives. This move signals management's confidence in the business's prospects and its capacity to generate consistent cash flow in the future.