G III APPAREL GROUP LTD /DE/

Previous wording

Each of Vilebrequin, KLH, Sonia Rykiel, Fabco and AWWG report results on a calendar year basis rather than on the January 31 fiscal year basis used by G-III. Accordingly, the results of Vilebrequin, KLH, Sonia Rykiel, Fabco and AWWG are included in the financial statements for the quarter ended or ending closest to G-III’s fiscal quarter end. For example, with respect to our results for the three-month period ended April 30, 2025, the results of Vilebrequin, KLH, Sonia Rykiel, Fabco and AWWG are included for the three-month period ended March 31, 2025. Our retail operations segment uses a 52/53-week fiscal year. For fiscal 2026 and 2025, the three-month periods for the retail operations segment were each 13-week periods and ended on May 3, 2025 and May 4, 2024, respectively.

Current wording

Each of Vilebrequin, KLH, Sonia Rykiel, AWWG and certain other subsidiaries report results on a calendar year basis rather than on the January 31 fiscal year basis used by G-III. Accordingly, the results of Vilebrequin, KLH, Sonia Rykiel, AWWG and certain other subsidiaries are included in the financial statements for the quarter ended or ending closest to G-III’s fiscal quarter end. For example, with respect to our results for the six-month period ended July 31, 2025, the results of Vilebrequin, KLH, Sonia Rykiel, AWWG and certain other subsidiaries are included for the six-month period ended June 30, 2025. Our retail operations segment reports on a 52/53 week fiscal year. For fiscal 2026 and 2025, the three and six-month periods for the retail operations segment were each 13-week and 26-week periods, respectively, and ended on August 2, 2025 and August 3, 2024, respectively.

Previous wording

our success. Although our portfolio of brands is aimed at diversifying our risks in this regard, misjudging shifts in consumer preferences could have a negative effect on our business. Our continued success depends on our ability to design products that are accepted in the marketplace, source the manufacture of our products on a competitive basis and continue to diversify our product portfolio and the markets we serve.

Current wording

We operate in fashion markets that are intensely competitive. Our ability to continuously evaluate and respond to changing consumer demands and tastes, across multiple market segments, distribution channels and geographic areas is critical to our success. Although our portfolio of brands is aimed at diversifying our risks in this regard, misjudging shifts in consumer preferences could have a negative effect on our business. Our continued success depends on our ability to design products that are accepted in the marketplace, source the manufacture of our products on a competitive basis and continue to diversify our product portfolio and the markets we serve.

Previous wording

Our retail operations segment consists primarily of direct sales to consumers through our company-operated stores and product sales through our digital sites for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H. Bass and Wilsons Leather brands. As of April 30, 2025, our retail operations segment consisted of 48 company-operated stores for our DKNY and Karl Lagerfeld Paris brands, substantially all of which are operated as outlet stores in North America.

Current wording

Our retail operations segment consists primarily of direct sales to consumers through our company-operated stores and product sales through our digital sites for the DKNY, Donna Karan, Karl Lagerfeld Paris, G.H. Bass and Wilsons Leather brands. As of July 31, 2025, our retail operations segment consisted of 47 company-operated stores for our DKNY and Karl Lagerfeld Paris brands, substantially all of which are operated as outlet stores in North America.

Previous wording

In April 2025, the United States imposed a minimum 10% tariff on most foreign imports into the United States and additional individualized reciprocal tariffs on imports from certain countries. The tariffs most relevant to us include, but are not limited to, (i) an additional 125% tariff on all imports from China resulting in a total incremental tariff of 145%, (ii) an additional 46% tariff on imports from Vietnam and (iii) an additional 32% tariff on imports from Indonesia. During fiscal 2025, approximately 76% of our product was sourced from China, Vietnam and Indonesia. Implementation of these reciprocal tariffs has been temporarily paused with partial tariffs levied. Tariffs levied on China have been reduced from 145% to 30% for a 90 day period beginning in May 2025, while all remaining countries on which tariffs have been imposed have a temporary tariff of 10% for a 90 day period that began in April 2025. We are continuing to monitor developments with respect to these policy changes and proposals, as well as exploring options to mitigate potential impacts of tariffs, including diversifying our sourcing mix, reducing product costs, and evaluating the potential for price increases.

Current wording

During fiscal 2025, approximately 76% of our product was sourced from China, Vietnam and Indonesia. In April 2025, the United States imposed a minimum 10% tariff on most foreign imports into the United States and additional individualized reciprocal tariffs on imports from certain countries. The tariffs most relevant to us included, but were not limited to, (i) an additional 125% tariff on all imports from China, (ii) an additional 46% tariff on imports from Vietnam and (iii) an additional 32% tariff on imports from Indonesia. In May 2025, the tariffs levied on China have been temporarily reduced to 30% and will remain reduced through November 2025. Reciprocal tariffs on countries other than China went into effect in August 2025. The current tariff rates for Vietnam and Indonesia are 20% and 19%, respectively.

Previous wording

As a result of the tariffs levied on China, we had suspended substantially all shipments from China. With the current administration’s announcement that the tariffs on imports from China have been paused, we are resuming shipping from China on a selective basis. We anticipate that other importers are experiencing similar circumstances and, as a result, we expect challenges in shipping goods from China. Ocean carriers have cancelled sailings and have removed vessels from service resulting in limited capacity which may cause delays in booking and shipping product as well as elevated ocean freight charges.

Current wording

As a result of the initial tariffs levied on China, we had suspended substantially all shipments from China. With the administration’s announcement that the tariffs on imports from China had been paused, we resumed shipping from China. Ocean carriers, which had previously cancelled sailings and removed vessels from service, had returned to full capacity at the time shipping resumed, resulting in minimal disruption. Freight charges were negatively impacted for a short period of time but have since stabilized.

Previous wording

Additional tariffs imposed on imports from China are causing importers to shift production to lower tariff territories, further impacting ocean carrier’s capacities. The recent changes to tariffs are increasing costs for importers, impacting demand and affecting ocean container shipping due to limited alternatives for moving goods.

Current wording

Additional tariffs imposed on imports are causing importers to shift production, if possible, to lower tariff territories, impacting the importers’ ability to plan as well as the capacity of our ocean carriers. The recent changes to tariffs are increasing costs for importers, impacting demand and affecting ocean container shipping due to limited alternatives for moving goods.

Previous wording

We distribute our products through multiple channels, including online through retail partners such as macys.com, bloomingdales.com, nordstrom.com and dillards.com, each of which operates a significant online business. In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos. We also distribute apparel and other products directly to consumers through our own DKNY, Karl Lagerfeld and Vilebrequin retail stores, as well as through our digital sites for our DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H. Bass, Wilsons Leather and Sonia Rykiel brands. As sales of apparel through digital channels continue to increase, we are developing additional digital marketing initiatives on both our own web sites and third party web sites and through social media. We are investing in digital personnel, marketing, logistics, planning, distribution and other strategic opportunities to expand our digital footprint.

Current wording

We distribute our products through multiple channels, including online through retail partners such as macys.com, bloomingdales.com, nordstrom.com and dillards.com, each of which operates a significant online business. In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos. We also distribute apparel and other products directly to consumers through our own DKNY, Karl Lagerfeld and Vilebrequin retail stores, as well as through our digital sites for our DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H. Bass, Wilsons Leather and Sonia Rykiel brands. As sales of apparel through digital channels continue to increase, we are developing additional digital marketing initiatives on both our own websites and third party websites and through social media. We are investing in digital personnel, marketing, logistics, planning, distribution and other strategic opportunities to expand our digital footprint.

Previous wording

A number of retailers have experienced financial difficulties, which in some cases have resulted in bankruptcies, liquidations and/or store closings, such as the recent bankruptcy filing by Hudson’s Bay Company. The financial difficulties of a retail customer of ours could result in reduced business with that customer. We may also assume higher credit risk relating to receivables of a retail customer experiencing financial difficulty that could result in higher reserves for doubtful accounts or increased write-offs of accounts receivable. We attempt to mitigate credit risk from our customers by closely monitoring accounts receivable balances and shipping levels, as well as the ongoing financial performance and credit standing of customers.

Current wording

A number of retailers have experienced financial difficulties, which in some cases have resulted in bankruptcies, liquidations and/or store closings, such as the recent bankruptcy filing by Hudson’s Bay Company. The financial difficulties of a retail customer of ours could result in reduced business with that customer. We may also assume higher credit risk relating to receivables of a retail customer experiencing financial difficulty that could result in higher reserves for doubtful accounts or increased write-offs of accounts receivable. We attempt to mitigate credit risk from our customers by closely monitoring accounts receivable balances and shipping levels, as well as the ongoing financial performance and credit standing of customers. We may also obtain credit insurance in certain circumstances to further mitigate credit risk.

Previous wording

Our licenses for Calvin Klein and Tommy Hilfiger products began expiring on a staggered basis on December 31, 2024 and continue through December 31, 2027. We have the right to request an extension of the Calvin Klein and Tommy Hilfiger licenses for the women’s suits category through December 31, 2029. Unless we are able to increase the sales of our other products, acquire new businesses and/or enter into other license agreements covering different products, the staggered expirations of the Calvin Klein and Tommy Hilfiger license agreements will cause a significant decrease in our net sales and have a material adverse effect on our results of operations.

Current wording

Our licenses for Calvin Klein and Tommy Hilfiger products began expiring on a staggered basis on December 31, 2024 and continue through December 31, 2027. Unless we are able to increase the sales of our other products, acquire new businesses and/or enter into other license agreements covering different products, the staggered expirations of the Calvin Klein and Tommy Hilfiger license agreements will cause a significant decrease in our net sales and have a material adverse effect on our results of operations.

Previous wording

In fiscal 2025, we experienced a $188.4 million decrease in net sales of Calvin Klein and Tommy Hilfiger licensed products which were more than offset by a $254.4 million increase in net sales of our DKNY, Donna Karan and Karl Lagerfeld products. In fiscal 2024, we experienced a $278.4 million decrease in net sales of Calvin Klein and Tommy Hilfiger

Current wording

In fiscal 2025, we experienced a $188.4 million decrease in net sales of Calvin Klein and Tommy Hilfiger licensed products which were more than offset by a $254.4 million increase in net sales of our DKNY, Donna Karan and Karl Lagerfeld products. In fiscal 2024, we experienced a $278.4 million decrease in net sales of Calvin Klein and Tommy Hilfiger licensed products which were partially offset by a $139.1 million increase in net sales of our DKNY and Karl Lagerfeld

Previous wording

licensed products which were partially offset by a $139.1 million increase in net sales of our DKNY and Karl Lagerfeld products. Our relaunch of our Donna Karan brand began in Spring 2024 and did not have a significant impact on net sales in fiscal 2024. We also recognize higher gross profit percentages on sales of products under our owned brands. While our recent ability to offset decreases in net sales of Calvin Klein and Tommy Hilfiger licensed products either in full or in part does not guarantee our ability to continue to do so in the future, we believe we will achieve strong growth of our owned brands. We will take strategic actions to mitigate the loss of this business by continuing to develop and expand our owned brands, such as DKNY, Donna Karan and Karl Lagerfeld, through new product lines, marketing initiatives, international growth and executing on digital channel business opportunities. We also seek to expand sales in our go-forward portfolio of licensed brands, including our team sports business, as well as through our recent licenses for the Nautica, Halston and Champion brands that launched in fiscal 2025 and the Converse and BCBG brands that will launch in fiscal 2026.

Current wording

products. Our relaunch of our Donna Karan brand began in Spring 2024. We also recognize higher gross profit percentages on sales of products under our owned brands. While our recent ability to offset decreases in net sales of Calvin Klein and Tommy Hilfiger licensed products either in full or in part does not guarantee our ability to continue to do so in the future, we believe we will achieve strong growth of our owned brands. We will take strategic actions to mitigate the loss of this business by continuing to develop and expand our owned brands, such as DKNY, Donna Karan and Karl Lagerfeld, through new product lines, marketing initiatives, international growth and executing on digital channel business opportunities. We also seek to expand sales in our go-forward portfolio of licensed brands, including our team sports business, as well as through our recent licenses for the Nautica, Halston and Champion brands that launched in fiscal 2025 and the Converse and BCBG brands that are launching in fiscal 2026.

Previous wording

Excluding licenses that we have the right to request a term extension, the Calvin Klein and Tommy Hilfiger licenses that expired in fiscal 2025 or have expiration dates in our fiscal 2026 through fiscal 2028 years contributed the following net sales to our total net sales in fiscal 2025:

Current wording

The Calvin Klein and Tommy Hilfiger licenses that expired in fiscal 2025 or have expiration dates in our fiscal 2026 through fiscal 2028 years contributed the following net sales to our total net sales in fiscal 2025:

Previous wording

Our consolidated operations are impacted by the relationships between our reporting currency, the U.S. dollar, and those of our non-United States subsidiaries whose functional/local currency is other than the U.S. dollar, primarily the Euro. Volatility in the global foreign currency exchange rates may have a negative impact on the reported results of certain of our non-United States subsidiaries in the future, when translated to the U.S. dollar.

Current wording

Our consolidated operations are impacted by the relationships between our reporting currency, the U.S. dollar, and those of our non-United States subsidiaries whose functional/local currency is other than the U.S. dollar, primarily the Euro. Volatility in the global foreign currency exchange rates may have a positive or negative impact on the reported results of certain of our non-United States subsidiaries in the future, when translated to the U.S. dollar.

Previous wording

The Federal Reserve increased interest rates several times in fiscal 2024 in response to concerns about inflation. The Federal Reserve began to decrease interest rates in fiscal 2025, however it is unclear whether the Federal Reserve will reduce, increase or maintain the current rates in the future. Higher interest rates increase the cost of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending. Volatility in interest rates may adversely affect our business or our customers. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, or at all.

Current wording

The Federal Reserve increased interest rates several times in fiscal 2024 in response to concerns about inflation. The Federal Reserve decreased interest rates in fiscal 2025 and has maintained those rates in fiscal 2026, however it is unclear whether the Federal Reserve will reduce, increase or maintain the current rates in the future. Higher interest rates increase the cost of our borrowing under our revolving credit facility, may increase economic uncertainty and may negatively affect consumer spending. Volatility in interest rates may adversely affect our business or our customers. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, or at all.

Previous wording

The global supply chain continues to be negatively impacted by various factors, including the recent reciprocal tariffs imposed across all countries, the ongoing disruptions in the Red Sea, port congestion and capacity shortages in Asia.

Current wording

The global supply chain continues to be negatively impacted by various factors, including the recent reciprocal tariffs imposed across all countries and the ongoing disruptions in the Red Sea.

Previous wording

The imposition of tariffs by the U.S. government and certain foreign jurisdictions, along with geopolitical tensions, have created an uncertain environment for global trade. As the impact of new or increased tariffs, quotas, embargoes or other trade barriers that could impact our supply chain and cost structure is dependent on global trade negotiations, we continue to monitor these changing tariffs and trade restrictions. We source all of our products from a global network of independent, third-party manufacturers, primarily located in Asia. The United States announced a temporary reduction in tariffs on imports from China for a 90 day period beginning in May 2025. As importers seek to resume shipping activity during this period, we anticipate challenges in shipping goods from China due to limited capacity available on ocean carriers, resulting in delays in shipping product and elevated ocean freight charges.

Current wording

The imposition of tariffs by the U.S. government and certain foreign jurisdictions, along with geopolitical tensions, have created an uncertain environment for global trade. As the impact of new or increased tariffs, quotas, embargoes or other trade barriers that could impact our supply chain and cost structure is dependent on global trade negotiations, we continue to monitor these changing tariffs and trade restrictions. We source substantially all of our products from a global network of independent, third-party manufacturers, primarily located in Asia.

Previous wording

Although our business has not been significantly impacted by such disruptions, we have experienced shipping delays, impacting the timing of inventory receipts. These delays have not resulted in any significant losses of customer sales. We continue to monitor supply chain challenges and coordinate with our partners to divert or adjust routes and destinations accordingly to ensure timely delivery of our product.

Current wording

Conflicts in the Middle East continue to cause major disruptions to global supply chains by impacting critical shipping routes through the Suez Canal and Red Sea for cargo, adding time and cost to shipments. Although our business has not been significantly impacted by such disruptions, we have experienced shipping delays, impacting the timing of inventory receipts. These delays have not resulted in any significant losses of customer sales. We continue to monitor supply chain challenges and coordinate with our partners to divert or adjust routes and destinations accordingly to ensure timely delivery of our product.

Previous wording

Net sales for the three months ended April 30, 2025 decreased to $583.6 million from $609.7 million in the same period last year. Net sales of our segments are reported before intercompany eliminations.

Current wording

Net sales for the three months ended July 31, 2025 decreased to $613.3 million from $644.8 million in the same period last year. Net sales of our segments are reported before intercompany eliminations.

Previous wording

Net sales of our wholesale operations segment decreased to $562.6 million for the three months ended April 30, 2025 from $597.8 million in the comparable period last year. We sell a broad range of products at varying price points and deliver newly designed products each year. In addition, we have certain revenues, primarily from royalty revenues, that are not based on our shipping units of product. In total, our decrease in sales was driven by a decrease in the number of units we shipped. The decrease in net sales of our wholesale operations segment was primarily the result of decreases in net sales of $58.1 million of our Calvin Klein and Tommy Hilfiger licensed products as well as third-party private label products. These decreases were partially offset by increases in net sales of $40.9 million of our DKNY, Donna Karan and Karl Lagerfeld products. The increase in sales of DKNY products was primarily related to jeanswear categories. The increase

Current wording

Net sales of our wholesale operations segment decreased to $589.0 million for the three months ended July 31, 2025 from $620.3 million in the comparable period last year. We sell a broad range of products at varying price points and deliver newly designed products each year. In addition, we have certain revenues, primarily from royalty revenues, that are not based on our shipping units of product. In total, our decrease in sales was driven by a decrease in the number of units we shipped. The decrease in net sales of our wholesale operations segment was primarily the result of decreases in net sales of $48.8 million of our Calvin Klein and Guess licensed products, due in part to several expired licenses that are not part of our go-forward business, as well as third-party private label products. These decreases were partially offset by increases in net sales of $20.2 million of our Karl Lagerfeld products. The increase in sales of Karl Lagerfeld products was primarily related to handbags and sportswear categories.

Previous wording

Net sales of our retail operations segment increased to $36.4 million for the three months ended April 30, 2025 from $30.5 million in the same period last year. The number of retail stores operated by us decreased from 52 at April 30, 2024 to 48 at April 30, 2025. The increase in sales in our retail operations segment was the result of increased sales at our Karl Lagerfeld Paris and DKNY stores. Comparable store sales, which include both stores and digital channels, increased at our Karl Lagerfeld Paris and DKNY stores compared to the same period in the prior year.

Current wording

Net sales of our retail operations segment increased to $41.1 million for the three months ended July 31, 2025 from $37.2 million in the same period last year. The number of retail stores operated by us decreased from 50 at July 31, 2024 to 47 at July 31, 2025. The increase in sales in our retail operations segment was the result of increased sales at our Karl Lagerfeld Paris stores. Comparable store sales, which include both stores and digital channels, increased at our Karl Lagerfeld Paris and DKNY stores compared to the same period in the prior year.

Previous wording

Depreciation and amortization was $6.6 million for the three months ended April 30, 2025 compared to $8.8 million in the same period last year. This decrease primarily results from lower depreciation related to fixturing costs at department stores and assets related to digital e-commerce platforms.

Current wording

Depreciation and amortization was $7.3 million for the three months ended July 31, 2025 compared to $5.4 million in the same period last year. This increase primarily results from higher depreciation related to fixturing costs at department stores.

Previous wording

Other income was $3.5 million in the three months ended April 30, 2025 compared to other loss of $0.2 million in the same period last year. Other income in the current period consisted of $1.9 million of foreign currency income during the current year period compared to $0.6 million of foreign currency income in the same period last year. Additionally, other income in the current period consisted of $1.6 million of income from unconsolidated affiliates during the current year period compared to $0.9 million of losses from unconsolidated affiliates in the same period last year.

Current wording

Other loss was $0.7 million in the three months ended July 31, 2025 compared to other loss of $3.0 million in the same period last year. Other loss in the current period consisted of $2.0 million of losses from unconsolidated affiliates during the current period compared to $2.2 million of losses from unconsolidated affiliates in the same period last year. Additionally, other loss in the current period consisted of $1.3 million of foreign currency income during the current year period compared to $1.3 million of foreign currency loss in the same period last year.

Previous wording

Income tax expense was $3.7 million for the three months ended April 30, 2025 compared to $2.3 million for the same period last year. Our effective tax rate increased to 32.4% in the current year’s quarter from 29.3% in last year’s comparable quarter. The higher effective tax rate in the current year period was due to the impact of permanent tax adjustments on the annual effective tax rate and discrete items in the quarter.

Current wording

Income tax expense was $5.0 million for the three months ended July 31, 2025 compared to $9.4 million for the same period last year. Our effective tax rate increased to 31.2% in the current year’s quarter from 28.1% in last year’s comparable quarter. The higher effective tax rate in the current year period was due to the impact of permanent tax adjustments on the annual effective tax rate and discrete items in the quarter.

Previous wording

Gross profit was $246.5 million, or 42.2% of net sales, for the three months ended April 30, 2025, compared to $258.9 million, or 42.5% of net sales, in the same period last year. The gross profit percentage in our wholesale operations segment was 40.4% in the three months ended April 30, 2025 compared to 40.9% in the same period last year. The gross profit percentage in the current year period decreased due to product mix, partially offset by an increased proportion ofsales of product related to our owned brands which have no royalty costs. The gross profit percentage in our retail operations segment was 53.5% for the three months ended April 30, 2025 compared to 47.0% for the same period last year. The gross profit percentage in the current year period was positively impacted from a better product assortment as well as increased digital sales of our Donna Karan products which have higher average unit retail prices.

Current wording

Gross profit was $497.0 million, or 41.5% of net sales, for the six months ended July 31, 2025, compared to $534.8 million, or 42.6% of net sales, in the same period last year. The gross profit percentage in our wholesale operations segment was 39.6% in the six months ended July 31, 2025 compared to 41.1% in the same period last year. The gross profit percentage in the current period decreased due to the impact of tariffs and product mix. The gross profit percentage in our retail operations segment was 52.9% for the six months ended July 31, 2025 compared to 51.1% for the same period last year. The gross profit percentage in the current period was positively impacted from a better product assortment as well as increased digital sales of our Donna Karan products which have higher average unit retail prices.

Previous wording

Selling, general and administrative expenses decreased to $231.5 million in the three months ended April 30, 2025 from $236.6 million in the same period last year. Selling, general and administrative expenses of our wholesale operations segment decreased to $209.7 million from $215.6 million in the comparable period last year. The decrease in expenses was primarily due to decreases of (i) $5.8 million in advertising expenses, primarily due to the relaunch of the Donna Karan brand and higher spending on the DKNY brand in the prior year’s period and reduced royalty advertising expenses resulting from lower net sales of licensed product in the current period and (ii) $3.4 million in compensation expenses, primarily due to a decrease in bonus expense accruals and share based compensation. These decreases were partially offset by an increase of $2.9 million in bad debt expense primarily related to allowances recorded against the outstanding receivables of certain customers due to bankruptcy, including Hudson’s Bay Company. Selling, general and administrative expenses of our retail operations segment increased to $21.8 million from $21.0 million in the comparable period last year. The increase in expenses is primarily due to an increase of $1.2 million in advertising expenses that were partially offset by a $0.8 million decrease in third party warehouse and facility expenses.

Current wording

Selling, general and administrative expenses decreased to $458.3 million in the six months ended July 31, 2025 from $465.7 million in the same period last year. Selling, general and administrative expenses of our wholesale operations segment decreased to $415.6 million from $423.0 million in the comparable period last year. The decrease in expenses was primarily due to decreases of (i) $10.4 million in compensation expenses, primarily due to a decrease in bonus expense accruals and (ii) $7.3 million in advertising expenses, primarily due to the relaunch of the Donna Karan brand and higher spending on the DKNY brand in the prior year’s period and reduced royalty advertising expenses resulting from lower net sales of licensed product in the current period. These decreases were partially offset by increases of (i) $3.2 million in third-party warehouse and facility expenses and (ii) $2.8 million in bad debt expense primarily related to allowances recorded against the outstanding receivables of certain customers due to bankruptcy, including Hudson’s Bay Company. Selling, general and administrative expenses of our retail operations segment increased to $42.7 million from $42.6 million in the comparable period last year.

Previous wording

Interest and financing charges, net, for the three months ended April 30, 2025 were $0.5 million compared to $5.4 million in the same period last year. The decrease in interest and financing charges was primarily due to a $7.9 million decrease in interest charges resulting from the redemption of the entire $400 million principal amount of the Senior Secured Notes due 2025 in August 2024 that was partially offset by a $4.1 million decrease in investment income from having a larger cash position in the prior year’s period compared to the current period.

Current wording

Interest and financing charges, net, for the six months ended July 31, 2025 were $0.2 million compared to $10.3 million in the same period last year. The decrease in interest and financing charges was primarily due to a $15.8 million decrease in interest charges resulting from the redemption of the entire $400 million principal amount of the Senior Secured Notes due 2025 in August 2024 that was partially offset by a $7.5 million decrease in investment income from having a larger cash position in the prior year’s period compared to the current period.

Previous wording

As of April 30, 2025, we had cash and cash equivalents of $257.8 million and availability under our revolving credit facility of approximately $480 million. As of April 30, 2025, we were in compliance with all covenants under our revolving credit facility.

Current wording

As of July 31, 2025, we had cash and cash equivalents of $301.8 million and availability under our revolving credit facility of approximately $530 million. As of July 31, 2025, we were in compliance with all covenants under our revolving credit facility.

Previous wording

Amounts available under the Third ABL Credit Agreement are subject to borrowing base formulas and overadvances as specified in the Third ABL Credit Agreement. Borrowings bear interest, at the Borrowers’ option, at Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.50% to 2.00%, or the alternate base rate plus a margin of 0.50% to 1.00% (defined as the greatest of (i) the “prime rate” of JPMorgan Chase Bank, N.A. from time to time, (ii) the federal funds rate plus 0.5% and (iii) SOFR for a borrowing with an interest period of one month plus 1.00%), with the applicable margin determined based on the Borrowers’ average daily availability under the Third ABL Credit Agreement. The Third ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors. As of April 30, 2025, interest under the Third ABL Credit Agreement was being paid at an average rate of 8.0% per annum.

Current wording

Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.50% to 2.00%, or the alternate base rate plus a margin of 0.50% to 1.00% (defined as the greatest of (i) the “prime rate” of JPMorgan Chase Bank, N.A. from time to time, (ii) the federal funds rate plus 0.5% and (iii) SOFR for a borrowing with an interest period of one month plus 1.00%), with the applicable margin determined based on the Borrowers’ average daily availability under the Third ABL Credit Agreement. The Third ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors. As of July 31, 2025, interest under the Third ABL Credit Agreement was being paid at an average rate of 8.0% per annum.

Previous wording

As of April 30, 2025, we had no borrowings outstanding under the Third ABL Credit Agreement. The Third ABL Credit Agreement also includes amounts available for letters of credit. As of April 30, 2025, there were no outstanding trade letters of credit and $2.6 million of standby letters of credit.

Current wording

As of July 31, 2025, we had no borrowings outstanding under the Third ABL Credit Agreement. The Third ABL Credit Agreement also includes amounts available for letters of credit. As of July 31, 2025, there were $0.6 million outstanding trade letters of credit and $2.6 million of standby letters of credit.

Previous wording

Several of the Company’s foreign entities borrow funds under various unsecured loans to provide funding for operations in the normal course of business. In the aggregate, the Company is currently required to make quarterly installment payments of principal in the amount of €0.8 million under these loans. Interest on the outstanding principal amount of the loans accrues at a fixed rate equal to 0% to 5.0% per annum, payable on either a quarterly or monthly basis. As of April 30, 2025, the Company had an aggregate outstanding balance of €4.9 million ($5.3 million) under these unsecured loans.

Current wording

Several of the Company’s foreign entities borrow funds under various unsecured loans to provide funding for operations in the normal course of business. In the aggregate, the Company is currently required to make quarterly installment payments of principal in the amount of €0.8 million under these loans. Interest on the outstanding principal amount of the loans accrues at a fixed rate equal to 0% to 5.0% per annum, payable on either a quarterly or monthly basis. As of July 31, 2025, the Company had an aggregate outstanding balance of €4.4 million ($5.2 million) under these unsecured loans.

Previous wording

Certain of our foreign entities entered into overdraft facilities that allow for applicable bank accounts to be in a negative position up to a certain maximum overdraft. These uncommitted overdraft facilities with HSBC Bank allow for an aggregate maximum overdraft of €10 million. Interest on drawn balances accrues at a rate equal to the EURIBOR plus a margin of 1.75% per annum, payable quarterly. The facility may be cancelled at any time by us or HSBC Bank. Certain of our foreign entities have also entered into overdraft facilities with UBS Bank in Switzerland for an aggregate of CHF 4.7 million at varying interest rates of 0% to 0.5%. As of April 30, 2025, the Company had an aggregate of €7.4 million ($8.0 million) drawn under these various facilities.

Current wording

Certain of our foreign entities entered into overdraft facilities that allow for applicable bank accounts to be in a negative position up to a certain maximum overdraft. These uncommitted overdraft facilities with HSBC Bank allow for an aggregate maximum overdraft of €10 million. Interest on drawn balances accrues at a rate equal to the EURIBOR plus a margin of 1.75% per annum, payable quarterly. The facility may be cancelled at any time by us or HSBC Bank. Certain of our foreign entities have also entered into overdraft facilities with UBS Bank in Switzerland for an aggregate of CHF 4.7 million at varying interest rates of 0% to 0.5%. As of July 31, 2025, the Company had an aggregate of €3.5 million ($4.1 million) drawn under these various facilities.

Previous wording

KLH has a credit agreement with ABN AMRO Bank N.V. with a credit limit of €15.0 million which is secured by specified assets of KLH. Borrowings bear interest at the EURIBOR plus a margin of 1.7%. A subsidiary of Vilebrequin has a credit agreement with CIC Bank with a credit limit of €5.0 million. Borrowings bear interest at the Euro Short-Term Rate plus a margin of 1.75%. As of April 30, 2025, we had an aggregate balance of €5.0 million ($5.4 million) in borrowings outstanding under these credit facilities.

Current wording

KLH has a credit agreement with ABN AMRO Bank N.V. with a credit limit of €15.0 million which is secured by specified assets of KLH. Borrowings bear interest at the EURIBOR plus a margin of 1.7%. A subsidiary of Vilebrequin has a credit agreement with CIC Bank with a credit limit of €5.0 million. Borrowings bear interest at the Euro Short-Term Rate plus a

Previous wording

We had no borrowings outstanding under our Third ABL Credit Agreement at April 30, 2025 and 2024, respectively. We redeemed the entire $400 million principal amount of the Notes in August 2024. We had $400 million in borrowings outstanding under the Notes at April 30, 2024. Our contingent liability under open letters of credit was approximately $2.6 million and $7.6 million at April 30, 2025 and 2024, respectively. We had an aggregate of €4.9 million ($5.3 million) and

Current wording

We had no borrowings outstanding under our Third ABL Credit Agreement at July 31, 2025 and 2024, respectively. We redeemed the entire $400 million principal amount of the Notes in August 2024. We had $400 million in borrowings outstanding under the Notes at July 31, 2024. Our contingent liability under open letters of credit was approximately $3.3 million and $9.1 million at July 31, 2025 and 2024, respectively. We had an aggregate of €4.4 million ($5.2 million) and €7.2 million ($7.8 million) outstanding under our various unsecured loans as of July 31, 2025 and 2024, respectively. We had €3.5 million ($4.1 million) and €7.4 million ($7.9 million) outstanding under our overdraft facilities as of July 31, 2025 and 2024, respectively. We had €5.3 million ($6.2 million) outstanding under our foreign credit facilities as of July 31, 2025. We had no borrowings outstanding under our foreign credit facilities as of July 31, 2024.

Previous wording

In August 2023, our Board of Directors authorized an increase in the number of shares covered by our share repurchase program to an aggregate amount of 10,000,000 shares. Pursuant to this program, during the three months ended April 30, 2025, we acquired 807,437 of our shares of common stock for an aggregate purchase price of $19.7 million, excluding excise tax. The timing and actual number of shares repurchased, if any, will depend on a number of factors, including market conditions and prevailing stock prices, and are subject to compliance with certain covenants contained in our loan agreement. Share repurchases may take place on the open market, in privately negotiated transactions or by other means, and would be made in accordance with applicable securities laws. As of April 30, 2025, we had remaining 6,982,731 shares that are authorized for purchase under this program. As of June 3, 2025, we had 43,305,811 shares of common stock outstanding.

Current wording

In August 2023, our Board of Directors authorized an increase in the number of shares covered by our share repurchase program to an aggregate amount of 10,000,000 shares. Pursuant to this program, during the six months ended July 31, 2025, we acquired 1,948,425 of our shares of common stock for an aggregate purchase price of $44.3 million, excluding excise tax. The timing and actual number of shares repurchased, if any, will depend on a number of factors, including market conditions and prevailing stock prices, and are subject to compliance with certain covenants contained in our loan agreement. Share repurchases may take place on the open market, in privately negotiated transactions or by other means, and would be made in accordance with applicable securities laws. As of July 31, 2025, we had remaining 5,841,743 shares that are authorized for purchase under this program. As of September 3, 2025, we had 42,215,473 shares of common stock outstanding.

Previous wording

We generated $93.8 million in cash from operating activities during the three months ended April 30, 2025, primarily as a result of our net income of $7.8 million and decreases of $143.7 million in accounts receivable and $21.6 million in inventories. We also generated cash from operating activities as a result of non-cash charges relating primarily to depreciation and amortization of $6.6 million and share-based compensation of $5.5 million. These items were offset, in part, by decreases of $67.6 million in accounts payable and accrued expenses and $20.2 million in customer refund liabilities.

Current wording

We generated $168.9 million in cash from operating activities during the six months ended July 31, 2025, primarily as a result of our net income of $18.7 million, an increase of $170.5 million in accounts payable and accrued expenses and a decrease of $149.8 million in accounts receivable. We also generated cash from operating activities as a result of non-cash charges relating primarily to depreciation and amortization of $13.9 million and share-based compensation of $11.0 million. These items were offset, in part, by an increase of $161.7 million in inventories and a decrease of $19.3 million in customer refund liabilities.

Previous wording

The changes in operating cash flow items are consistent with our seasonal pattern. Our accounts receivable, inventory and customer refund liabilities decreased because we experience lower sales levels in our first and second quarters than in our third and fourth quarters. The decrease in accounts payable and accrued expenses is primarily attributable to vendor payments related to inventory purchases and the payment of year-end bonuses in our first fiscal quarter.

Current wording

The changes in operating cash flow items are consistent with our seasonal pattern of building up inventory for the fall shipping season resulting in the increase in inventory and accounts payable. Our accounts receivable and customer refund liabilities decreased because we experience lower sales in our first and second quarters than in our third and fourth quarters.

Previous wording

We used $8.8 million of cash in investing activities during the three months ended April 30, 2025. We had $8.1 million in capital expenditures primarily related to information technology expenditures.

Current wording

We used $19.2 million of cash in investing activities during the six months ended July 31, 2025. We had $18.4 million in capital expenditures primarily related to leasehold improvement expenditures.

Previous wording

Net cash used by financing activities was $12.6 million during the three months ended April 30, 2025 primarily as a result of $19.7 million of cash used to repurchase 807,437 shares of our common stock under our share repurchase program, excluding excise tax, and $4.9 million for taxes paid in connection with net share settlements of stock grants that vested. These items were offset, in part, by net proceeds of $12.0 million under our various foreign facilities.

Current wording

Net cash used by financing activities was $41.3 million during the six months ended July 31, 2025 primarily as a result of $44.3 million of cash used to repurchase 1,948,425 shares of our common stock under our share repurchase program, excluding excise tax, and $4.9 million for taxes paid in connection with net share settlements of stock grants that vested. These items were offset, in part, by net proceeds of $8.0 million under our various foreign facilities.