What changed in this filing

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Item 1. Financial Statements

2024-12-10 compared with 2024-09-06 · 121 added, 119 removed, 443 unchanged (35% of the section changed)

40 unchanged sentences

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Retained earnings

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

(In thousands, except per share amounts)

2 unchanged sentences

Depreciation and amortization

Asset impairments

Operating profit

Other (loss) income

Other income (loss)

Interest and financing charges, net

8 unchanged sentences

Weighted average number of shares outstanding

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustments

Other comprehensive (loss) income

Other comprehensive income (loss)

Comprehensive income

1 unchanged sentence

Foreign currency translation adjustments

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to G-III Apparel Group, Ltd.

5 unchanged sentences

(In thousands)

Balance as of April 30, 2024

Equity awards vested, net

Balance as of July 31, 2024

Share-based compensation expense

Other comprehensive loss, net

Repurchases of common stock

Excise tax on stock repurchases

Reduction of noncontrolling interest

Other comprehensive income, net

Net income attributable to G-III Apparel Group, Ltd.

Balance as of October 31, 2024

Balance as of July 31, 2023

Balance as of April 30, 2023

Equity awards vested, net

1 unchanged sentence

Taxes paid for net share settlements

Other comprehensive income, net

Repurchases of common stock

Other comprehensive loss, net

Net income attributable to G-III Apparel Group, Ltd.

Balance as of July 31, 2023

Balance as of October 31, 2023

Balance as of January 31, 2024

2 unchanged sentences

Taxes paid for net share settlements

Other comprehensive loss, net

Other comprehensive income, net

Repurchases of common stock

2 unchanged sentences

Net income attributable to G-III Apparel Group, Ltd.

Balance as of July 31, 2024

Balance as of October 31, 2024

Balance as of January 31, 2023

2 unchanged sentences

Taxes paid for net share settlements

Other comprehensive income, net

Other comprehensive loss, net

Repurchases of common stock

Net income attributable to G-III Apparel Group, Ltd.

Balance as of July 31, 2023

Balance as of October 31, 2023

The accompanying notes are an integral part of these statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended July 31,

Nine Months Ended October 31,

(Unaudited, in thousands)

1 unchanged sentence

Net income attributable to G-III Apparel Group, Ltd.

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization

1 unchanged sentence

Non-cash operating lease costs

Equity loss in unconsolidated affiliates

Asset impairment

Extinguishment of deferred financing costs

Equity gain in unconsolidated affiliates

Change in fair value of equity securities

10 unchanged sentences

Accounts payable, accrued expenses and other liabilities

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities

10 unchanged sentences

Proceeds from borrowings - foreign facilities

Repayment of borrowings - senior secured notes

Payment of financing costs

24 unchanged sentences

Effective April 17, 2024, the Company acquired the remaining 25 % interest in Fabco that it did not previously own and, as a result, Fabco began being treated as a wholly-owned subsidiary.

AWWG Investments B.V.

(“AWWG”) is a Dutch corporation that was 12.1 % owned by the Company from May 3, 2024 through July 18, 2024 and was accounted for using the cost method.

Effective July 19, 2024, the Company acquired an additional 6.6 % minority interest in AWWG, increasing its total ownership interest to 18.7 % and, as a result, AWWG began being accounted for under the equity method of accounting.

All material intercompany balances and transactions have been eliminated.

Karl Lagerfeld Holding B.V.

(“KLH”), a Dutch limited liability company that is wholly-owned by the Company, Vilebrequin International SA (“Vilebrequin”), a Swiss corporation that is wholly-owned by the Company, Sonia Rykiel, a Swiss corporation that is wholly-owned by the Company, and Fabco report results on a calendar year basis rather than on the January 31 fiscal year basis used by the Company.

Accordingly, the results of KLH, Vilebrequin, Sonia Rykiel and Fabco are included in the financial statements for the quarter ended or ending closest to the Company’s fiscal quarter end.

For example, with respect to the Company’s results for the six-month period ended July 31, 2024, the results of KLH, Vilebrequin, Sonia Rykiel and Fabco are included for the six-month period ended June 30, 2024.

(“KLH”), a Dutch limited liability company that is wholly-owned by the Company, Vilebrequin International SA (“Vilebrequin”), a Swiss corporation that is wholly-owned by the Company, Sonia Rykiel, a Swiss corporation that is wholly-owned by the Company, Fabco and AWWG report results on a calendar year basis rather than on the January 31 fiscal year basis used by the Company.

Accordingly, the results of KLH, Vilebrequin, Sonia Rykiel, Fabco and AWWG are included in the financial statements for the quarter ended or ending closest to the Company’s fiscal quarter end.

For example, with respect to the Company’s results for the nine-month period ended October 31, 2024, the results of KLH, Vilebrequin, Sonia Rykiel, Fabco and AWWG are included for the nine-month period ended September 30, 2024.

The Company’s retail operations segment reports on a 52/53 week fiscal year.

For fiscal 2025 and 2024, the three and six-month periods for the retail operations segment were each 13-week and 26-week periods, respectively, and ended on August 3, 2024 and July 29, 2023, respectively.

The results for the three and six months ended July 31, 2024 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business.

For fiscal 2025 and 2024, the three and nine-month periods for the retail operations segment were each 13-week and 39-week periods, respectively, and ended on November 2, 2024 and October 28, 2023, respectively.

The results for the three and nine months ended October 31, 2024 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business.

The accompanying financial statements included herein are unaudited.

11 unchanged sentences

Retail trade receivables primarily relate to amounts due from third-party credit card processors for the settlement of debit and credit card transactions and are typically collected within 3 to 5 days.

The Company’s accounts receivable and allowance for doubtful accounts as of July 31, 2024, July 31, 2023 and January 31, 2024 were:

July 31, 2024

The Company’s accounts receivable and allowance for doubtful accounts as of October 31, 2024, October 31, 2023 and January 31, 2024 were:

October 31, 2024

(In thousands)

2 unchanged sentences

Accounts receivable, net

July 31, 2023

October 31, 2023

(In thousands)

18 unchanged sentences

Accounts written off as uncollectible

Balance as of July 31, 2024

Balance as of October 31, 2024

Balance as of January 31, 2023

1 unchanged sentence

Accounts written off as uncollectible

Balance as of July 31, 2023

Balance as of October 31, 2023

Balance as of January 31, 2023

6 unchanged sentences

Substantially all of the Company’s inventories consist of finished goods.

The inventory return asset, which consists of the amount of goods that are anticipated to be returned by customers, was $ 6.5 million, $ 8.5 million and $ 16.5 million as of July 31, 2024, July 31, 2023 and January 31, 2024, respectively.

The inventory return asset, which consists of the amount of goods that are anticipated to be returned by customers, was $ 10.6 million, $ 15.6 million and $ 16.5 million as of October 31, 2024, October 31, 2023 and January 31, 2024, respectively.

The inventory return asset is recorded within prepaid expenses and other current assets on the condensed consolidated balance sheets.

Inventory held on consignment by the Company’s customers totaled $ 4.7 million, $ 7.9 million and $ 6.6 million at July 31, 2024, July 31, 2023 and January 31, 2024, respectively.

Inventory held on consignment by the Company’s customers totaled $ 5.6 million, $ 7.9 million and $ 6.6 million at October 31, 2024, October 31, 2023 and January 31, 2024, respectively.

The Company reflects this inventory on its condensed consolidated balance sheets.

14 unchanged sentences

Secured Notes

Revolving credit facility

Note issued to LVMH

3 unchanged sentences

The Company’s debt instruments are recorded at their carrying values in its condensed consolidated balance sheets, which may differ from their respective fair values.

The fair value of the Company’s secured notes is based on their current market price as of July 31, 2024.

The carrying amount of the Company’s variable rate debt approximates the fair value, as interest rates change with market rates.

Furthermore, the carrying value of all other financial instruments potentially subject to valuation risk (principally consisting of cash, accounts receivable and accounts payable) also approximates fair value due to the short-term nature of these accounts.

The fair value of the Company’s secured notes was based on their market price at each fiscal quarter end.

The Company redeemed the entire $ 400 million principal amount of its 7.875 % Senior Secured Notes due August 2025 (the “Notes”) at a redemption price equal to 100 % of the principal amount of the Notes plus accrued and unpaid interest in August 2024.

The 2 % note in the original principal amount of $ 125 million (the “LVMH Note”) issued to LVMH Moet Hennessy Louis Vuitton Inc.

(“LVMH”) in connection with the acquisition of DKNY and Donna Karan was recorded on the balance sheet at a discount of $ 40.0 million in accordance with ASC 820 – Fair Value Measurements (“ASC 820”).

(“LVMH”) in connection with the acquisition of DKNY and Donna Karan was recorded on the balance sheet at a discount of $ 40.0 million in accordance with Accounting Standards Codification (“ASC”) 820 – Fair Value Measurements (“ASC 820”).

For purposes of this fair value disclosure, the Company based its fair value estimate for the LVMH Note on the initial fair value as determined at the date of the acquisition of DKNY and Donna Karan and recorded amortization using the effective interest method over the term of the LVMH Note.

15 unchanged sentences

Several of the Company’s retail store leases include an option to terminate the lease based on failure to achieve a specified sales volume.

The exercise of lease renewal options is generally at the Company’s sole discretion.

The exercise of lease renewal options is generally at the

Company’s sole discretion.

The exercise of lease termination options is generally by mutual agreement between the Company and the lessor.

1 unchanged sentence

The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

The Company’s operating lease assets and liabilities as of July 31, 2024, July 31, 2023 and January 31, 2024 consist of the following:

The Company’s operating lease assets and liabilities as of October 31, 2024, October 31, 2023 and January 31, 2024 consist of the following:

Classification

July 31, 2024

July 31, 2023

October 31, 2024

October 31, 2023

January 31, 2024

6 unchanged sentences

Total lease liabilities

The Company recorded lease costs of $ 18.0 million and $ 36.2 million during the three and six months ended July 31, 2024.

The Company recorded lease costs of $ 18.3 million and $ 36.9 million during the three and six months ended July 31, 2023.

The Company’s operating lease assets and operating lease liabilities increased during fiscal 2025 primarily due to the renewal of the Company’s corporate office lease.

The Company recorded lease costs of $ 19.0 million and $ 55.2 million during the three and nine months ended October 31, 2024.

The Company recorded lease costs of $ 18.1 million and $ 55.1 million during the three and nine months ended October 31, 2023.

Lease costs are recorded within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income.

The Company recorded variable lease costs and short-term lease costs of $ 5.8 million and $ 11.1 million for the three and six months ended July 31, 2024.

The Company recorded variable lease costs and short-term lease costs of $ 5.5 million and $ 11.5 million for the three and six months ended July 31, 2023.

The Company recorded variable lease costs and short-term lease costs of $ 5.0 million and $ 16.1 million for the three and nine months ended October 31, 2024.

The Company recorded variable lease costs and short-term lease costs of $ 6.7 million and $ 18.1 million for the three and nine months ended October 31, 2023.

Short-term lease costs are immaterial.

As of July 31, 2024, the Company’s maturity of operating lease liabilities in the years ending up to January 31, 2029 and thereafter are as follows:

As of October 31, 2024, the Company’s maturity of operating lease liabilities in the years ending up to January 31, 2029 and thereafter are as follows:

Year Ending January 31,

2 unchanged sentences

Present value of lease liabilities

As of July 31, 2024, there are no material leases that are legally binding but have not yet commenced.

As of July 31, 2024, the weighted average remaining lease term related to operating leases is 4.9 years.

As of October 31, 2024, there are no material leases that are legally binding but have not yet commenced.

As of October 31, 2024, the weighted average remaining lease term related to operating leases is 6.7 years.

The weighted average discount rate related to operating leases is 6.8 %.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 38.0 million and $ 39.3 million during the six months ended July 31, 2024 and 2023, respectively.

Right-of-use assets obtained in exchange for lease obligations were $ 16.1 million and $ 18.1 million during the six months ended July 31, 2024 and 2023, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 58.9 million and $ 53.2 million during the nine months ended October 31, 2024 and 2023, respectively.

Right-of-use assets obtained in exchange for lease obligations were $ 108.7 million and $ 26.8 million during the nine months ended October 31, 2024 and 2023, respectively.

NOTE 6 – NET INCOME PER COMMON SHARE

1 unchanged sentence

Diluted net income per share, when applicable, is computed using the weighted average number of common shares and potential dilutive common shares, consisting of unvested restricted stock unit awards outstanding during the period.

A nominal amount of shares of common stock have been excluded from the diluted net income per share

calculation for the three and six months ended July 31, 2024.

Approximately 106,000 and 312,500 shares of common stock have been excluded from the diluted net income per share calculation for the three and six months ended July 31, 2023.

There were no shares of common stock excluded from the diluted net income per share calculation for the three and nine months ended October 31, 2024.

Approximately 8,200 and 59,200 shares of common stock have been excluded from the diluted net income per share calculation for the three and nine months ended October 31, 2023.

All share-based payments outstanding that vest based on the achievement of performance conditions, and for which the respective performance conditions have not been achieved, have been excluded from the diluted per share calculation.

The following table reconciles the numerators and denominators used in the calculation of basic and diluted net income per share:

Three Months Ended July 31,

Six Months Ended July 31,

Three Months Ended October 31,

Nine Months Ended October 31,

(In thousands, except share and per share amounts)

10 unchanged sentences

Long-term debt consists of the following:

July 31, 2024

July 31, 2023

October 31, 2024

October 31, 2023

January 31, 2024

1 unchanged sentence

Secured Notes

Revolving credit facility

Unsecured loans

4 unchanged sentences

Current portion of long-term debt

(1) Does not include debt issuance costs, net of amortization, totaling $ 5.4 million, $ 3.2 million and $ 2.4 million as of July 31, 2024, July 31, 2023 and January 31, 2024, respectively, related to the revolving credit facility.

(1) Does not include debt issuance costs, net of amortization, totaling $ 5.2 million, $ 2.8 million and $ 2.4 million as of October 31, 2024, October 31, 2023 and January 31, 2024, respectively, related to the revolving credit facility.

These debt issuance costs have been deferred and are classified in assets in the accompanying condensed consolidated balance sheets in accordance with ASC 835.

Senior Secured Notes

In August 2020, the Company completed a private debt offering of $ 400 million aggregate principal amount of its 7.875 % Senior Secured Notes due August 2025 (the “Notes”).

The terms of the Notes are governed by an indenture (the “Indenture”), among the Company, the guarantors party thereto and U.S.

Bank, National Association, as trustee and collateral agent (the “Collateral Agent”).

The net proceeds of the Notes were used (i) to repay the $ 300 million that was outstanding under the Company’s prior term loan facility due 2022 (the “Term Loan”), (ii) to pay related fees and expenses and (iii) for general corporate purposes.

The Notes bear interest at a rate of 7.875 % per year payable semi-annually in arrears on February 15 and August 15 of each year.

The Notes are unconditionally guaranteed on a senior-priority secured basis by the Company’s current and future wholly-owned domestic subsidiaries that guarantee any of the Company’s credit facilities, including the Company’s ABL facility (the “ABL Facility”) pursuant to the ABL Credit Agreement, or certain future capital markets indebtedness of the Company or the guarantors.

The Notes and the related guarantees are secured by (i) first priority liens on the Company’s Cash Flow Priority Collateral (as defined in the Indenture), and (ii) a second-priority lien on the Company’s ABL Priority Collateral (as defined in the Indenture), in each case subject to permitted liens described in the Indenture.

In connection with the issuance of the Notes and execution of the Indenture, the Company and the Guarantors entered into a pledge and security agreement (the “Pledge and Security Agreement”), among the Company, the Guarantors and the Collateral Agent.

The Notes are subject to the terms of the intercreditor agreement which governs the relative rights of the secured parties in respect of the ABL Facility and the Notes (the “Intercreditor Agreement”).

The Intercreditor Agreement restricts the actions permitted to be taken by the Collateral Agent with respect to the Collateral on behalf of the holders of the Notes.

The Company may redeem some or all of the Notes at any time and from time to time at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

If the Company experiences a Change of Control (as defined in the Indenture), the Company is required to offer to repurchase the Notes at 101 % of the principal amount of such Notes plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

The Indenture contains covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to incur or guarantee additional indebtedness, pay dividends or make other restricted payments, make certain investments, incur restrictions on the ability of the Company’s restricted subsidiaries that are not guarantors to pay dividends or make certain other payments, create or incur certain liens, sell assets and subsidiary stock, impair the security interests, transfer all or substantially all of the Company’s assets or enter into merger or consolidation transactions, and enter into transactions with affiliates.

The Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest, breach of other agreements in the Indenture, failure to pay certain other indebtedness, failure of certain guarantees to be enforceable, failure to perfect certain collateral securing the Notes, failure to pay certain final judgments, and certain events of bankruptcy or insolvency.

The Company incurred debt issuance costs totaling $ 8.5 million related to the Notes.

In accordance with ASC 835, the debt issuance costs have been deferred and are presented as a contra-liability, offsetting the outstanding balance of the Notes, and are amortized over the remaining life of the Notes.

The Company had previously completed a private debt offering of $ 400 million aggregate principal amount of the Notes.

In August 2024, the Company used cash on hand and borrowings from its revolving credit facility to make a $ 400.7 million payment to voluntarily redeem the entire $ 400 million principal amount of the Notes at a redemption price equal to 100 %

of the principal amount of the Notes plus accrued and unpaid interest.

At the date of redemption, the Company had unamortized debt issuance costs of $ 1.6 million associated with the Notes.

These debt issuance costs were fully extinguished and charged to interest expense in the Company’s results of operations.

Third Amended and Restated ABL Credit Agreement

9 unchanged sentences

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.

As of October 31, 2024, interest under the Third ABL Credit Agreement was being paid at an average rate of 6.57 % per annum.

The Third ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors.

9 unchanged sentences

In certain circumstances, the revolving credit facility also requires the Company to maintain a fixed charge coverage ratio, as defined in the agreement, not less than 1.00 to 1.00 for each period of twelve consecutive fiscal months of the Company.

As of July 31, 2024, the Company was in compliance with these covenants.

As of July 31, 2024, the Company had no borrowings outstanding under the Third ABL Credit Agreement.

As of October 31, 2024, the Company was in compliance with these covenants.

As of October 31, 2024, the Company had $ 210.1 million 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, 2024, there were outstanding trade and standby letters of credit amounting to $ 6.3 million and $ 2.9 million, respectively.

As of October 31, 2024, there were outstanding trade and standby letters of credit amounting to $ 6.2 million and $ 2.9 million, respectively.

At the date of the refinancing of the Second ABL Credit Agreement, the Company had $ 1.9 million of unamortized debt issuance costs remaining from the Second ABL Credit Agreement.

12 unchanged sentences

Interest on the outstanding principal amount of the unsecured 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, 2024, the Company had an aggregate outstanding balance of € 7.2 million ($ 7.8 million) under these unsecured loans.

As of October 31, 2024, the Company had an aggregate outstanding balance of € 6.0 million ($ 7.3 million) under these unsecured loans.

Overdraft Facilities

4 unchanged sentences

As part of a COVID-19 relief program, certain of the Company’s foreign entities entered into several state backed 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, 2024, the Company had an aggregate of € 7.4 million ($ 7.9 million) drawn under these various facilities.

As of October 31, 2024, the Company had an aggregate of € 4.1 million ($ 4.6 million) drawn under these various facilities.

Foreign Credit Facility

2 unchanged sentences

Borrowings bear interest at the Euro Interbank Offered Rate plus a margin of 1.7 %.

As of July 31, 2024, KLH had no borrowings outstanding under this credit facility.

As of October 31, 2024, KLH had an aggregate outstanding balance of € 2.0 million ($ 2.2 million) borrowings outstanding under this credit facility.

NOTE 8 – REVENUE RECOGNITION

8 unchanged sentences

The Company considers control to have been transferred when the Company has transferred physical possession of the product, the Company has a right to payment for the product, the customer has legal title to the product and the customer has the significant risks and rewards of the product.

Wholesale revenues are adjusted by variable consideration arising from implicit or explicit obligations.

Wholesale revenues are adjusted by variable

consideration arising from implicit or explicit obligations.

Wholesale revenues also include revenues from license agreements related to the DKNY, Donna Karan, Karl Lagerfeld, G.H.

11 unchanged sentences

In some of its retail concepts, the Company also offers a limited loyalty program where customers accumulate points redeemable for cash discount certificates that expire 90 days after issuance.

Total contract liabilities were $ 5.1 million, $ 4.6 million and $ 5.2 million at July 31, 2024, July 31, 2023 and January 31, 2024, respectively.

The Company recognized $ 3.4 million in revenue for the three months ended July 31, 2024 related to contract liabilities that existed at April 30, 2024.

The Company recognized $ 4.0 million in revenue for the six months ended July 31, 2024 related to contract liabilities that existed at

January 31, 2024.

There were no contract assets recorded as of July 31, 2024, July 31, 2023 and January 31, 2024.

Substantially all of the advance payments from licensees as of July 31, 2024 are expected to be recognized as revenue within the next twelve months.

Total contract liabilities were $ 4.6 million, $ 3.3 million and $ 5.2 million at October 31, 2024, October 31, 2023 and January 31, 2024, respectively.

The Company recognized $ 3.6 million in revenue for the three months ended October 31, 2024 related to contract liabilities that existed at July 31, 2024.

The Company recognized $ 4.5 million in revenue for the nine months ended October 31, 2024 related to contract liabilities that existed at January 31, 2024.

There were no contract assets recorded as of October 31, 2024, October 31, 2023 and January 31, 2024.

Substantially all of the advance payments from licensees as of October 31, 2024 are expected to be recognized as revenue within the next twelve months.

NOTE 9 – SEGMENTS

8 unchanged sentences

Substantially all DKNY and Karl Lagerfeld Paris stores are operated as outlet stores.

The following segment information is presented for the three and six month periods indicated below:

Three Months Ended July 31, 2024

The following segment information is presented for the three and nine month periods indicated below:

Three Months Ended October 31, 2024

Elimination (1)

4 unchanged sentences

Operating profit (loss)

Three Months Ended July 31, 2023

Three Months Ended October 31, 2023

Elimination (1)

3 unchanged sentences

Depreciation and amortization

Asset impairments

Operating profit (loss)

Six Months Ended July 31, 2024

Nine Months Ended October 31, 2024

Elimination (1)

4 unchanged sentences

Operating profit (loss)

Six Months Ended July 31, 2023

Nine Months Ended October 31, 2023

Elimination (1)

3 unchanged sentences

Depreciation and amortization

Asset impairments

Operating profit (loss)

2 unchanged sentences

Three Months Ended

Six Months Ended

July 31, 2024

July 31, 2023

July 31, 2024

July 31, 2023

Nine Months Ended

October 31, 2024

October 31, 2023

October 31, 2024

October 31, 2023

(In thousands)

5 unchanged sentences

Retail net sales

The total assets for each of the Company’s reportable segments, as well as assets not allocated to a segment, are as follows:

October 31, 2024

October 31, 2023

January 31, 2024

(In thousands)

NOTE 10 – STOCKHOLDERS’ EQUITY

For the three months ended July 31, 2024, the Company issued no shares of common stock and utilized 99,585 shares of treasury stock in connection with the vesting of equity awards.

For the three months ended July 31, 2023, the Company issued no shares of common stock and utilized 601,907 shares of treasury stock in connection with the vesting of equity awards.

For the six months ended July 31, 2024, the Company issued no shares of common stock and utilized 366,714 shares of treasury stock in connection with the vesting of equity awards.

For the six months ended July 31, 2023, the Company issued no shares of common stock and utilized 603,971 shares of treasury stock in connection with the vesting of equity awards.

For the three months ended October 31, 2024, the Company issued no shares of common stock and utilized no shares of treasury stock in connection with the vesting of equity awards.

For the three months ended October 31, 2023, the Company issued no shares of common stock and utilized 4,354 shares of treasury stock in connection with the vesting of equity awards.

For the nine months ended October 31, 2024, the Company issued no shares of common stock and utilized 366,714 shares of treasury stock in connection with the vesting of equity awards.

For the nine months ended October 31, 2023, the Company issued no shares of common stock and utilized 608,325 shares of treasury stock in connection with the vesting of equity awards.

NOTE 11 – FABCO

3 unchanged sentences

As settlement of a portion of the outstanding payables, the Company issued a non-interest bearing promissory note to Amlon in the principal amount of $ 0.6 million of which $ 0.4 million of the principal amount is due and payable on April 17, 2025 and $ 0.2 million of the principal amount is due and payable on April 17, 2026.

The promissory note is classified in notes payable in the Company’s condensed consolidated balance sheet as of July 31, 2024.

The remaining $ 0.6 million of payables due to Amlon was forgiven, resulting in the Company recognizing a gain of $ 0.6 million within other (loss) income in the Company’s condensed consolidated statements of income and comprehensive income.

The promissory note is classified in notes payable in the Company’s condensed consolidated balance sheet as of October 31, 2024.

The remaining $ 0.6 million of payables due to Amlon was forgiven, resulting in the Company recognizing a gain of $ 0.6 million within other income (loss) in the Company’s condensed consolidated statements of income and comprehensive income.

Since the Company controlled Fabco prior to this transaction and continues to control Fabco after the transaction, the Company accounted for the change in its ownership interest in Fabco as an equity transaction, which was reflected as a reduction of the noncontrolling interest with a corresponding decrease to additional paid in capital as a result of losses incurred by Fabco.

1 unchanged sentence

NOTE 12 – AWWG INVESTMENT

In May 2024, the Company acquired a 12.1 % minority interest in AWWG Investments B.V.

(“AWWG”) for € 50 million ($ 53.6 million).

In May 2024, the Company acquired a 12.1 % minority interest in AWWG for € 50 million ($ 53.6 million).

AWWG is a global fashion group and premier platform for international brands.

AWWG owns a portfolio of brands including Hackett, Pepe Jeans and Façonnable.

The Company intends to leverage AWWG’s expertise with AWWG becoming the agent for Karl Lagerfeld, DKNY and Donna Karan in Spain and Portugal.

This investment is intended to accelerate several of the Company’s priorities including expanding its international business and identifying opportunities for growth of its owned brands.

As of July 31, 2024, the Company accounts for its investment in AWWG using the cost method.

Investments recorded using the cost method will be assessed for any decrease in value that has occurred that is other than temporary and the other than temporary decrease shall be recognized.

The Company will continue to evaluate its ability to significantly influence operational and financial policy to establish a basis for converting the investment accounted for using the cost method to the equity method of valuation in accordance with ASC 323.

The investment is classified in other assets, net in the Company’s condensed consolidated balance sheet as of July 31, 2024.

This investment is intended to leverage AWWG’s expertise and provide for synergies to support the Company’s international expansion priority through the development of its operational platform in Europe.

In July 2024, the Company acquired an additional 6.6 % minority interest in AWWG for € 27.1 million ($ 29.1 million), increasing its total ownership interest to 18.7 %.

2 unchanged sentences

reports results on a calendar year basis rather than on the January 31 fiscal year basis used by the Company.

Accordingly, the AWWG investment will be accounted for under the equity method of accounting in the Company’s fiscal quarter ending October 31, 2024.

The additional investment is classified in other assets, net in the Company’s condensed consolidated balance sheet as of July 31, 2024.

Prior to the additional investment made in July 2024, the Company accounted for its investment in AWWG using the cost method and the investment was classified in other assets, net in the Company’s condensed consolidated balance sheet.

As of the date of the additional investment made in July 2024, the Company determined it has significant influence in accordance with ASC 323 and, as a result, converted the accounting for the investment from the cost method to the equity method of accounting.

The investment is classified in investments in unconsolidated affiliates in the Company’s condensed consolidated balance sheet as of October 31, 2024.

NOTE 13 – RECENT ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Guidance

There was no accounting guidance adopted during the three months ended July 31, 2024.

There was no accounting guidance adopted during the three months ended October 31, 2024.

Issued Accounting Guidance Being Evaluated for Adoption

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The Company is currently evaluating the standard and determining the extent of additional disclosures that may be required.

NOTE 14 – SUBSEQUENT EVENTS

Senior Secured Notes Redemption

In August 2024, the Company used cash on hand and borrowings from its revolving credit facility to make a $ 400.7 million voluntary payment to redeem the entire $ 400 million principal amount of its Senior Secured Notes due August 2025 at a redemption price equal to 100 % of the principal amount of the Notes plus accrued interest.

In November 2024, the FASB issued ASU 2024-03 , “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses”.

The ASU requires public entities to disclose more detailed information about certain costs and expenses presented in the income statement, including inventory purchases, employee compensation, selling expenses, depreciation and intangible asset amortization.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The amendments in this ASU should be applied prospectively;

however, retrospective application is permitted.

The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements