G-III’s third quarter results were marked by a 9% year-over-year sales decline, missing Wall Street’s revenue expectations but delivering stronger than expected non-GAAP profitability. The positive market reaction reflected management’s ability to drive margin resilience despite industry-wide tariff pressures and ongoing declines in the PVH-licensed Calvin Klein and Tommy Hilfiger businesses. CEO Morris Goldfarb credited the quarter’s outperformance to strong growth in owned brands like Donna Karan and Karl Lagerfeld, accelerated full-price selling, and disciplined inventory management. He highlighted, “Our teams replaced more than 70% of the lost sales volume through organic growth of our go-forward owned and licensed portfolio.”
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G-III (GIII) Q3 CY2025 Highlights:
- Revenue: $988.6 million vs analyst estimates of $1.01 billion (9% year-on-year decline, 2.3% miss)
- Adjusted EPS: $1.90 vs analyst estimates of $1.61 (17.9% beat)
- Adjusted EBITDA: $123.5 million vs analyst estimates of $111 million (12.5% margin, 11.2% beat)
- The company dropped its revenue guidance for the full year to $2.98 billion at the midpoint from $3.02 billion, a 1.3% decrease
- Management raised its full-year Adjusted EPS guidance to $2.85 at the midpoint, a 7.5% increase
- EBITDA guidance for the full year is $210.5 million at the midpoint, above analyst estimates of $203.7 million
- Operating Margin: 11.4%, down from 15.3% in the same quarter last year
- Locations: 48 at quarter end, down from 52 in the same quarter last year
- Market Capitalization: $1.34 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From G-III’s Q3 Earnings Call
- Robert Drbul (BTIG) asked how G-III plans to manage gross margin in light of tariff impacts and whether price increases can fully offset these costs in the future. CFO Neal Nackman responded that the company intends to incorporate tariff costs into pricing going forward and expects margins to normalize as owned brand mix improves.
- Ashley Owens (KeyBanc) questioned how quickly the decline in PVH-licensed sales would result in a cleaner, more profitable base and whether this accelerates the transformation timeline. CEO Morris Goldfarb indicated that while the PVH exit is ahead of schedule, owned brand growth is helping offset the drag, and new international opportunities are emerging.
- Mauricio Serna (UBS) asked for details on newly launched licenses such as Nautica, Halston, and BCBG, and their early market performance. Goldfarb described Nautica’s growth as exceeding expectations and said Halston and BCBG are scaling, with long-term potential but still early in development.
- Mauricio Serna (UBS) also inquired about the gross margin outlook for next spring, given Q4’s expected contraction. Nackman explained that tariff pressures will ease after Q4, and gross margins should improve as the mix shifts to owned brands and new pricing takes hold.
- Dana Telsey (Telsey Advisory Group) probed the incremental impact of new product launches, expanded sizing, and direct retail on both top-line and margin. Goldfarb stated that all new initiatives, especially in Donna Karan and Karl Lagerfeld, are expected to deliver organic growth and higher profitability as they scale.
Catalysts in Upcoming Quarters
Looking forward, our team will watch for (1) the pace at which owned brands like Donna Karan and Karl Lagerfeld continue gaining share and expanding into new categories; (2) the company’s ability to mitigate margin pressures as tariff impacts roll off and pricing strategies are implemented; and (3) progress in scaling direct-to-consumer and international operations. The trajectory of new licenses and the success of category launches will also be key signposts.
G-III currently trades at $31.82, up from $29.67 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
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