G-III, The US Apparel Purchasing And Distribution Giant, Wants Three Parties To Jointly Pay For Customs Duties.

G-III Apparel Group Ltd. (NASDAQ:G-III), a clothing buyer and seller in the US, has a poor performance in the first quarter.

As the group purchases a large number of products from China for its brands and customers, the chairman and CEO Morris Goldfarb said in the earnings report that "the retail industry is experiencing unprecedented disruption", but the group still has confidence in its ability to cope with challenges, and continues to expect significant growth in the next few years.

Investors are more worried about the impact of tariffs than on G-III Apparel Group Ltd. (NASDAQ:G-III). In the past two trading days, the stock has fallen 13.5%, making it close to a 23.34 year low of nearly two years.

G-III Apparel Group Ltd. achieved $633 million 600 thousand in the first quarter, less than $650 million expected by the market, up 3.6% over the same period last year.

Net profit rose 21.8% to 12 million dollars, EPS also rose from $0.20 to $0.24, adjusted EPS to $0.25, better than FactSet's expected $0.22.

The group reaffirmed its annual revenue of $3 billion 280 million in the 2020 fiscal year and the outlook for adjusted US $EPS3.25-3.35, and said that the outlook has taken into account the impact of China's imports of $200 billion on the group related business at present, but does not include an additional 300 billion US dollar impact on the potential tariff adjustment of China's imports of us products.

The tariff environment at the present stage has damaged the handbag business of G-III Apparel Group Ltd.. The first round of the 10% tariff which began last year has seriously affected several successive seasons. The 25% tariff, which came into effect in May 10th, is expected to increase the cost of 6 million US dollars in the 2020 fiscal year.

Morris Goldfarb revealed at a conference call of analysts that since the Sino US sweater exhibition, they succeeded in obtaining concessions from Chinese suppliers, and some of the US customers also agreed to raise prices, and the parties agreed to share the potential tariff costs of other categories.

He also believes that department stores consumers are willing to pay for the price increase.

"We have been working hard to diversify the procurement network and pull some production lines out of China," Morris Goldfarb told analysts. "We recognize that we must further reduce our products in China."

At the same time, he complained that people were talking about tariffs, raising prices and pferring procurement places while ignoring the losses faced by importers who were forced to pfer the supply chain seamlessly at an unsuitable time after 30-40 years of development in a country.

He said that the pfer of all Chinese production lines is "very easy", but "we will not give up 40 years of efforts and quality products, and take risks in entering new fields". Therefore, even if the profit margins suffer, the purchase of China will remain the best solution for the group.

G-III Apparel Group Ltd.'s revenue growth in the first quarter continued to be boosted by the wholesale business of the five major global brands, Calvin Klein, Tommy Hilfiger, DKNY, DonnaKaran and Karl.

Morris Goldfarb revealed that last year, the biggest brand Calvin Klein, which brought over $1 billion to the group, has performed well in the first quarter. G-III ApparelGroup Ltd. also recently obtained the agency from the PVH Corp. (NYSE:PVH) for the annual sales of about $250 million of the women's jeans business.

Tommy Hilfiger has achieved a rapid growth of more than 50%. The DKNY and Donna Karan brands, which sell for us $400 million in the fiscal year, continue to be the main engine of growth in the group, with double-digit growth in the first quarter.