G-III Apparel Sees Sales Dip Tariff Hit

G-III Apparel Group (NASDAQ:GIII) reported second quarter fiscal 2026 results on September 4, 2025, with net sales of $613 million, GAAP diluted EPS of $0.25, and healthy growth from core owned brands despite headwinds from expiring licenses and elevated tariff costs. Management issued updated full-year guidance of $3.02 billion in net sales and non-GAAP diluted EPS of $2.55 to $2.75, reflecting a 5% year-over-year sales decline driven by license exits and $75 million in unmitigated tariff impacts.

Gross margin declined 230 basis points year-over-year (YoY) to 40.8%, attributed to an accelerated flow of tariff-impacted inventory and unfavorable product mix, with wholesale margins at 38.9% and retail at 52.4%. Management expects the bulk of the approximately $75 million unmitigated tariff drag to weigh on the second half, with near-term absorption required due to the timing of retailer orders and limits on in-season pricing action.

This accelerated margin compression in FY2026 constrains current profitability but positions the company for future gross margin expansion as owned brands grow and low-margin licenses are sunsetted.

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Source Fool.com