G-III Apparel Group, Ltd. (NASDAQ:GIII) Q3 2018 Earnings Conference Call Transcript
Dec 05, 2017 • 08:30 am ET
Welcome to the G-III Apparel Group Third Quarter Fiscal 2018 Earnings Conference Call. My name is Elaine, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) Please note that this conference is being recorded.
I will now turn the call over to Neal Nackman, CFO. Sir, you may begin.
Thank you. (Forward-Looking Cautionary Statements)
In addition, during the call, we will refer to non-GAAP net income, non-GAAP net income per share and to adjusted EBITDA, which are all non-GAAP financial measures. We have provided reconciliations of these non-GAAP financial measures to GAAP measures in our press release and on our website.
I will now turn the call over to our Chairman and CEO, Morris Goldfarb.
Good morning and thank you for joining us. With me today are Sammy Aaron, our Vice Chairman and President; Wayne Miller, our COO; Neal Nackman, our CFO; and Jeff Goldfarb, EVP.
We are pleased with our third quarter results which surpassed our plan. Our results were led by a double-digit increase in sales in our wholesale business and improved results in our own retail stores. Overall, we are positioned for a good fourth quarter as our products continue to sell well in stores throughout the country.
This is our key quarter for outerwear. We have great product that is selling at a very good pace as the weather seems to playing to our advantage this year. The early cold snap across most of the country helped to drive sell-through with healthy margins at retail. Overall, we're on pace to sustain good outerwear margins and to capture reorder opportunities through the remainder of the year.
That said, the most excitement in our business continues to revolve around each of our power brands, Calvin Klein, DKNY, Donna Karan, Tommy Hilfiger and Karl Lagerfeld.
Before I get into some of the brand level detail, I'd like to first provide an overview of our business with some highlights from our third quarter financial performance.
Net sales in the third quarter were up 16%, to a recorded $1,025 million, compared to last year's third quarter of $883 million. Our diluted net income per share in the third quarter was up 10% to a $1.65 compared to a $1.50 of last year. We're pleased with this better than expected performance. Given the strong quarter and a good near-term outlook, we are increasing our full year projections.
Each of our power brands is showing market-leading levels of performance. Our ability to differentiate and create compelling assortments is reflected by our establishment and consistent growth of numerous brands. Our market share across women's apparel and accessories, after starting from scratch a decade ago, has become dominant in the North American department store channel and we are still growing.
Calvin Klein remains one of our strongest brands and our wholesale business represents products that will equate to approximately $2.5 billion of retail sales this year. The