G-III Apparel Group Ltd (GIII) 2011 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. And thank you for standing by. Welcome to the G-III Apparel Group Ltd. first quarter 2011 earnings conference call. Today's call is being recorded. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like you now to turn the conference over to Mr. Neal Nackman, Chief Financial Officer. Please go ahead.

Thank you. Before we begin, I would like to remind participants that certain statements made on today's call and the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees and actual results may differ materially from those expressed or implied in forward-looking statements. Important factors that could cause actual results of operations of the financial condition of the Company to differ are discussed in the documents filed by the Company with the SEC. The Company undertakes no duty to update any forward-looking statement. In addition, during the call we will refer to EBITDA, which is a non-GAAP number. We have provided a reconciliation of EBITDA to our net income according to GAAP in our press release and on our website. I will now turn the call over to our Chairman and Chief Executive Officer, Morris Goldfarb.

Good morning. And thank you for joining us today. With me are Sammy Aaron, our Vice Chairman, Wayne Miller, our Chief Operating Officer, and Neal Nackman, our Chief Financial Officer. I'm pleased to report that we had an excellent first quarter, with each area of our business contributing to our continued progress.

Here are the financial highlights from the quarter compared to last year's first quarter. Net sales increased by 43% from $107 million to $154 million. Our revenue growth in our first quarter, traditionally our lowest sales quarter, was primarily the result of continued success in our dress and sportswear businesses. Our gross margin increased to 31.8%, compared to 29% last year. Our operating loss of $1.9 million in the first quarter was a dramatic improvement from the year-ago level of $11.1 million. We had a net loss of $0.07 per share, compared to $0.41 per share in the same quarter last year.

Our results for the quarter are a big improvement over last year, and were better than we had anticipated. We have an excellent suite of brands and private label programs. We're executing well, and we expect to continue to take market share as we go forward. Our order book is considerably higher as compared to last year, and we expect continued growth in sales and profit. We are increasingly confident in our ability to have another record-breaking year.

We are continuing to expand the range of our opportunities and are excited about the following new initiatives. First, we're expanding our Andrew Marc licensing base. We just recently announced the licensing partnership with Jones New York for Men's Andrew Marc, Marc New York and Marc Moto jeanswear consisting of denim and related sportswear targeted and better specialty and department store tiers. This is an exciting initiative, as Jones New York is clearly an excellent partner in the jeanswear category. This currently is Jones' only men's denim initiative.

The collection is expected to debut in the fourth quarter with product under Marc Moto. Andrew Marc and Marc Jeanswear are expected to debut in 2011. We believe this will open the door to additional categories. To support the development of a true lifestyle brand, we've determined that now is the time to increase the awareness of Andrew Marc brand and are pursuing a significantly stronger marketing presence beginning this fall.

A second new initiative is to diversify into new product categories as demonstrated by our recent signing of two new licenses with Calvin Klein. One for women's handbags and small leather goods and a second for luggage. We expect to start shipping these products in 2011. We're very proud of the fact that Calvin Klein and Phillips-Van Heusen have the confidence and trust in us to execute across multiple categories and we're really thankful to the team at Calvin Klein, led by Tom Murray and PVH led by Manny Terico.

In addition to our new initiatives, we remain focused on executing and growing our existing portfolio of businesses. Our products continue to deliver good margins for our retail customers across a number of important categories. This is helping us capture incremental orders in every category, including outerwear, dresses, women's sportswear, women's suits, as well as within our sports license business. In particular, I should call out the ongoing strength of our women's dress and sportswear businesses. After only three years, we are one of the country's largest wholesalers of women's dresses and we still have only a handful of brands in our portfolio for this category.

We're selling through well with great product in every season across several tiers of distribution and our development efforts are continuing. The business is anchored by Calvin Klein, which has grown at an exceptional rate. Jessica Howard, Eliza J and other businesses are also making significant contributions to our dress growth. Our women's Calvin Klein sportswear business is growing dramatically.

We will more than double our door count this year. Spring has been strong and we're increasingly confident in our opportunity for the back half of the year. I should also mention our sports license business is on a very good track. The addition of the NFL Sportswear Collection and the expansion in the core outerwear portion of that business should drive significant growth both in top line sales as well as bottom line profit.

Regarding our retail segment, our comps are up, our margins are up, and we are planning for 5 to 10 new stores opening this year. We're confident in our ability to continue to move this business forward profitably, through a combination of better sales per square foot and higher gross margins. The product is right. The prices are right and the management team is right. We now have retail under control and on track.

Lastly, our thoughts on acquisitions. Our acquisitions over the past several years have increased our portfolio of licensed and proprietary brands. They've deepened our expertise, expanded the breadth of our business and given us new core competencies, as well as provided us with a degree of scale that benefits ourselves, our customers, as well as our licensors. We have the resources and the capabilities to do nearly anything in the apparel industry we set our minds to. We've taken a difficult challenge in difficult times and we've succeeded.

We continue to evaluate potential transactions. We think there's an excellent opportunity for us to continue to complete accretive transactions that will generate value for our shareholders. And we have the resources to do so. I'll reserve some additional comments for closing but we'll now turn the call over to Neal Nackman, our Chief Financial Officer.

Thank you, Morris. Our diversification into non-outerwear categories continues to result in positive improvements in our operating results. Our net loss for the first quarter was reduced to $1.4 million, compared to $6.8 million last year's first quarter. The reduction in our net loss was driven by strong wholesale and retail sales growth and improved gross margins. Our wholesale operations reduced their first quarter loss by almost $6 million. Our retail segment showed significantly improved operating results as well in reducing its operating loss in the quarter to $1.1 million from $4 million in the prior year's first quarter.

Net sales for the quarter ended April 30, 2010 increased to $154 million, from $107 million in the same period last year. Net sales of wholesale licensed apparel increased to $92.4 million from $60 million, driven by increased net sales of Calvin Klein licensed product, primarily dresses and women's sportswear. Net sales of wholesale non-licensed apparel increased to $40.3 million from $28.8 million, primarily due to increases in net sales in our Jessica Howard dress division. Net sales of our retail operations were $30 million, compared to $27.2 million in the prior year's first quarter, primarily as a result of an increase in outerwear sales.

Gross margin percentages increased in all three segments in the three month period ended April 30, as compared to the prior year. The gross margin percentage in our wholesale licensed apparel segment increased to 26.1%, compared to 24.6%, and our wholesale non-licensed apparel segment they increased to 29% from 20.6% and our retail operation segment improved to 44% from 38.7%. In all segments our gross margin percentage was positively impacted by strong sell-through which resulted in lower markdowns. Our wholesale license segment also benefited from additional sales of a higher margin Calvin Klein dress product.

Selling, general and administrative expenses improved as a percentage of sales, increasing $8.8 million to $49.7 million in the quarter ended April 30, 2010, from $40.9 million in the same period last year. This increase was primarily a result of increases in personnel costs, advertising and promotion expenses, and outside warehousing expenses. Our balance sheet continues to improve. Accounts receivable increased commensurate with sales and were $83 million compared to $52 million at the end of the prior year's first quarter. Our balance sheet shows a net cash position at $18 million, as compared to a net debt position of $29 million at the end of last year's first quarter. This improvement is a result of the $35 million in net proceeds we received from our public equity offering in December, and from cash generated from our operations. In addition, we recently completed an amendment to our credit facility. The amendment increased our line of credit to allow for borrowings of up to $300 million from a previous cap of $250 million, extended the term for two years until July 2013 and now provides for a slightly lower interest rate on our borrowings.

Lastly, I would like to discuss our guidance for the full fiscal year and the second quarter. For the fiscal year ending January 31, 2011 we are forecasting net sales to increase approximately 19% to approximately $950 million, compared to the $801 million of net sales in fiscal 2010. Net income to increase between 45 to 52%, to $44 million to $46 million, or between $2.20 and $2.30 per diluted share, compared to net income of $31.7 million or $1.83 per diluted share in fiscal 2010. We are forecasting EBITDA to grow between 35 to 40% from last year, to a range of approximately $83.3 million to $86.3 million compared to $61.6 million in fiscal 2010.

With respect to our second quarter guidance, we are forecasting net sales of approximately $160 million in this year's second quarter, compared to $136 million in the comparable quarter in the prior year. We are forecasting a net loss of $200,000 to $1 million, or between $0.01 and $0.05 per share in the second quarter, compared to a net loss of $2.8 million or $0.17 per share in last year's second quarter. That concludes my comments and I will now turn the call back to Morris for closing remarks.

Thanks, Neal. I want to underscore the strong financial, competitive and strategic position that G-III occupies in our industry. We believe we are positioned well for another strong year. We expect to continue to benefit from a variety of initiatives as we both grow our existing businesses and seek additional growth through acquisitions. We have a solid balance sheet and we believe we will support continued execution of our strategic plans. Finally, we believe that our performance places us in a special tier of vendors who know how to deliver great product on-time with the right fashion at the right price. We've been an excellent partner to our customers, our licensors, and our vendor base. We will demonstrate again this year why G-III is one of the most versatile and capable apparel companies. Thank you, and we'll now open the call for questions.

Thank you. (Operator Instructions). We'll go first to Jeff Klinefelter with Piper Jaffray.

Yes, thank you, congratulations to the team on a great start to the year. Morris, maybe commenting on the current environment, if you hit this right at the beginning, I apologize. I was a couple minutes late onto the call. The current environment has clearly been more volatile lately. How, it's obviously not affecting your business, or it hasn't in the first quarter, but how has the volatility and particularly the weakness in May, has that impacted the retailers' willingness to book even your stronger categories for the third and fourth quarters? Are they starting to change their behavior at all in terms of how they prebook versus ask for you to hold product?

No, actually not. Our business has been excellent. Our bookings in April and May have been strong. You might have missed, our order book is up significantly. Better than we had expected. The sell-throughs, the current sell-throughs in retail and the classifications that we ship at this time of the year are excellent. So there's no sign of weakness. Contrary to that, if there was anything there was a concern from the retailers that they get delivery on everything that they bought and anticipate buying. So we're very aggressive in specifically our position in the sector.

Okay.

I can't control the external economic issues, but from where we sit, from the vantage point that we're at, we believe everything's in excellent shape.

Okay. In terms of that second half product availability and cost of goods or sourcing, in your product categories, what are you seeing at this point in terms of any sort of tightness of product availability, fabrics, labor, et cetera?

All of it is an issue. Labor is in demand. There's pressure on factories in China. We're controlling it and controlling it well. Costs of material are up. Most of our bookings with our factories were done quite early. We were fortunate that the retailers gave us our bookings early as well. And on reorders, the retailer's forced to pay the upcharges that the factories are asking for.

There is a little bit of pressure. We're participating a little bit on the back end of the year where reorders are in one of our divisions where the reorders are fairly aggressive, we make it up in top line, I believe, on the back end of the year. Specifically, in our performance area. The units are very large and pressure's a little tight on price points.

Okay. One last thing. In terms of your license, your expansion of your licensing relationships, are there product categories at this point that you're looking at, you have not been in historically, that would be additional opportunities for you as a licensee? And then as a licensor as well, are there product categories that you would consider that are moving a little bit further away from your traditional core?

I don't know if you heard our announcement of the Calvin Klein handbag and small leather goods business as well as the luggage business that we're now entering into. For the past few weeks, we've hired exceptional talent. We've traveled aggressively. We're producing hundreds of samples to be pretty much in place for showing maybe August, September of this year. So that's a classification.

Those two are classifications that historically we've not been in. We have a competency in those areas because our retail business, Wilson's, has always been in the handbag and luggage business, so it's not totally unique to us. But as far as licensing arrangement, this is the first in handbags and luggage. And likely not to be our last. We will probably follow suit with a profile we've created in our coat area as well as our dress area, where we create a platform and sign brands to support that platform, the first of which is Calvin Klein.

Okay. Great. Well, thank you very much. Good luck.

Thank you, Jeff.

We'll go now to Eric Beder with Brean Murray.

Good morning. Let me add my congratulations.

Thank you, Eric.

Could you talk a little about -- you had a significant change in -- you made an improvement at Wilson's Leather this quarter. What were the key drivers of the Wilson's turnaround?

Well, the Wilson's turnaround really started when we told you a year ago the product was much better. We had a greater focus on private label. We focused on Customer Service and a year ago, August, I believe, we told you that that was the beginning of the turnaround. And in fact, it followed through. From August on, it got better and better. Our product is right. The store reads much better. Our management team is very, very much motivated. And I think we're in line to have a good year at Wilson's.

We've done -- in credit to the team, there's been a great deal of pressure. They've done an excellent job of turning it around and at this point we're opening some new stores, as I stated earlier. We will have a minimum of five stores, and probably as much as 10 outlet center stores and several power center stores. So we're comfortable with management. We're comfortable with the concept. And we believe that this is a good part of our future.

Okay. And in terms of the dress business, obviously it was very strong in Q1. What opportunities do you see to gain additional share in dresses based upon the portfolio you have now?

The portfolio that we have right now supports all areas of the dress area. It supports evening. It supports day. It supports career. And we're just basically scraping the surface. I think there's a long way to go in all of our brands and beyond that, the initiative is to sign other brands that cover sectors that we're not in. That might be a junior or maybe a more contemporary brand that we would go out to seek to develop either through one of our brands or through licensing.

Andrew Marc, which I did not mention earlier, Andrew Marc launched its dress business. It's doing well. Nordstrom's has done well with it. Bloomingdale's is doing well with it and the initiative is to expand on that and as the brand becomes more dominant in the fashion sector, I believe dress will go with it. And beyond that, in our Eliza J. business, we've gone into a bridal business and that bridal business is expanding quite rapidly. So there are many sectors of the dress business that we still have movement on or ability to move on.

Do you see that kind of upside potential in the sportswear business also?

Sportswear? We're finding sportswear's a little bit more difficult. Sportswear requires a dozen deliveries a year. Its design intensive, its delivery intensive. Timing is more crucial. We're doing well with it. We are not taking on additional initiative today until we get the scale and the system of delivery and all the problems out of that business. We're growing rapidly. We're profitable. Our store count is doubling this year and we need to make sure that we don't disappoint any retailers on this initiative. So I'd say that I would tell you we're not likely to undertake another sportswear initiative this year.

Okay. And just finally, on the new Calvin Klein licenses, I assume these are going -- are these going in the same stores that you're selling right now, to Calvin Klein and are these newer licenses from Calvin Klein, or are these transfers from another licensee?

The product will go in through the same distribution channel that we currently have, as well as additional ones that -- maybe luggage stores and handbag stores that we traditionally don't sell, and as far as whether it's a new license or a transfer, it's a transfer of an existing classification that was licensed to somebody else.

I assume these things will be in Wilson's Leather also?

I'm sorry? I missed that.

I'm assuming these new license of Calvin Klein products will be in Wilson's also?

If Wilson's believes it's right for the profile of the store, they're able to buy it. The focus on Wilson's as it relates to the handbags and luggage is more private label today.

Great. Again, thank you. Great quarter.

Thank you, Eric.

We'll go now to Lazard Capital Markets, Todd Slater.

Thanks very much and very nice quarter, guys.

Thank you, Todd.

Can you remind us what you think the long-term revenue potential is for the Calvin Klein sportswear business and if that has changed at all and where you're tracking currently, my first question.

Well, we don't fragment the pieces of our business. But I've stated before that the sportswear business can be a $200 million business, and it's rapidly reaching there. We're not -- we're where we planned. We're probably ahead of where we planned for this year. And we believe we can reach a couple hundred million dollars, could be in the next 18 months.

Okay. So--?

As I said before, our business is good. We're tweaking it to make sure that it's better. It's a tough sector. We have merchandisers in all our departments to ensure that our product is displayed right, the product reaches the floor. We're design intensive. We're shoring up every sector of that business because we believe that sportswear is an important driver of our business. Once we get that right, there's, again, there's a strong possibility that we'll sign on another sportswear collection. But we're not foolish. We won't undertake anything that we can't handle.

Okay. Next, just wonder if you could talk a little bit about the state of affairs in the outerwear private label business. I recall that the stores in the past have gone more direct and if that's changing and, if so, what the ramifications could be for this year in the second half and if that piece is reflected in your order book.

Our private label business is actually pretty good. We've picked up some ground. Last year, it was off, comp to the year before. This year, we've recaptured a good deal of business in the private label sector. And it goes across pretty much all channels. The piece that we might struggle more than another might be the mass tier. But we've accepted that. It's a low margin piece of our business. There's always a good deal of pressure attaining a price point and if there was a year to give up some mass business, this might be it. As I've stated before, price point pressures and fabric pressures overseas are fairly high and if there was a sector that was being most affected, it's the piece that we're not as much engaged in. So I'd say a quick answer to your private label business is that we're growing and we're recapturing the position we had in the past.

Okay. And then quickly, back to Andrew Marc, Jeanswear, will there be other categories outside of jeans like tops and sort of give a sense of how you envision Andrew Marc as a lifestyle brand in terms of other future category opportunity.

The categories are fairly endless. We have licenses signed. We have a men's small leather goods and luggage business that's signed. We have cold weather. We have footwear signed. We have women's accessories signed. So we're quite certain that other classifications are coming on-board.

We're negotiating with several this very moment. So this will be one of the power brands in our industry. We're spending a good deal of marketing money and the initiative that we told you we were heading toward when we acquired this company is coming to fruition. We're doing everything we've stated that we would do. We're taking on the classifications that we believe our competency is appropriate for and others to the extent that timing is right we license out.

Okay. And lastly, a follow-up on Wilson's. You're showing some improvement there. I think you lost about $3 million in that business last year. Do you expect it to turn a profit this year, maybe give us a sense of what you're looking for.

We lost $4 million last year and we will turn a profit this year. Our product is right. We're going to build our top line organically, as well as with additional door count. So we're very comfortable with, as I stated earlier, very comfortable with our ownership of the Wilson's retail. And again, as we speak to platforms of businesses, this could be a platform for additional retail that could roll into it. So we're getting it right. Feels like we're in the right zone. And there's a reason for us to be in retail.

That's great. Have a very good second quarter.

Thank you, Todd.

We'll go next to Edward Yruma with KeyBanc.

Thanks very much for taking my question and congratulations on a great quarter. Can you talk a little about inventory growth? I think you were up about 11% which is still well below sales growth but a little bit higher than we observed in the past two quarters. How do you feel about the quality of your inventory and how should we think about inventory growth for the balance of the year?

Our inventory levels are really in great shape, probably in as good of shape as we've ever really seen. We came out of last year cleaning up our outerwear to a degree that we really hadn't seen in previous years. I think we start the year on the outerwear side very clean. Our other businesses are delivering product throughout the year. We continue to keep those inventories at a clean and healthy level. The 11% increase is not far off -- in fact, it's less than our second quarter sales forecast so we're very comfortable with our inventory levels.

On top of that, our guidance gives you a 20% increase in this year's top line business and there's inventory needed for that and the advantage we have is as prices go up, our ownership will support continued margin improvement that we're showing you now.

Got you. Great. And on gross margin, I think you were up almost 500 BPs and I know that there's been a lot of structural improvement due to the addition of your retail but how do you think about your longer term gross margin opportunity?

Well, certainly in the -- we're talking gross margins or operating margins, Ed?

Gross.

Okay. On the gross margin side, we had about a 280 BP increase for Q1. I think for the balance of the year, what we see is that margins will become tighter. We do see some price pressure. I think on the Wilson's side of the business, we're still looking for some gross margin improvement. And on the wholesale side, I think there will be a little more challenging. We also had a great second half of last year as you'll recall in terms of Q4 in particular.

In terms of operating margins, though, well, we really still continue to feel that we can lever the business. We still feel very comfortable with high single digit, low double-digit top line growth. And I know historically we talked about getting to operating margins of about 8%. We're now expecting to be there this year. And expecting that really that we see another 200 BPs or so in terms of the short-term and in terms of increasing our operating margins going forward. That will probably be more driven off the SG&A leverage side than on the gross margin side. But we still have some gross margin opportunities as well.

Ed, as we signed the Calvin Klein accessory and small leather goods and bag license as well as the luggage license, those historically are better margin businesses. We've seen that at retail at Wilson's. It's pretty much a known fact, and our competencies in buying leather and buying raw material will serve us well in that sector. So I would say that you're likely to see continued improvement in our margins.

Great. And Morris, one final question. As you look at the small leather goods and accessories business platform you added to your business with the Calvin Klein additions, if you compare this to your enthusiasm around dresses, when you used to do dresses a couple of years ago, how do you frame the opportunity relative to that and do you think over time this could be a business as large as your dress business? Thank you.

We believe the bag and luggage business can be as big, if not bigger than the dress business. So the answer is we're very aggressive on it. We've hired great talent to support it. We're working aggressively. We're getting the cooperation. It's amazing when you have a brand like Calvin Klein, the level of cooperation that you get offshore in developing product.

When you walk in and say okay, we're here, we're G-III, we have the Calvin Klein license in bags and luggage and we need to develop quickly, I will tell you, the world stops and takes care of your immediate needs. So we're likely to build to a large scale and likely to do it rapidly. We have the financial capability. We have the store relationships. We have the vendor relationships and we have a great team that's spearheading this initiative. So I'd say you're likely to hear a lot about this business.

This is very early on. This is the first discussion that we've had with any of you on the release of this license. It was just signed a week ago and we're letting you know today.

Great. Thanks very much.

Thank you, Ed.

We'll go now to Andrew Burns with Thomas Weisel Partners.

This is Andrew in for Jim Duffy. You mentioned additional investments in the Andrew Marc brand this fall. Can you quantify the P&L impact from these incremental marketing initiatives?

We really haven't put out specific numbers there. The increases we believe are large, consistent with sales increases that we expect to have.

Okay. And within the dress category, I'm just trying to understand how you think about the growth drivers of the business over the next few years, just wondering how much opportunity's left, expanding into new doors with your existing brands versus growth from improved sell-through or new brands? Trying to better understand the balance there.

Well, it may not be door expansion. It may be greater door penetration. So we're on it. There's a major initiative that we've undertaken to profile the doors that we're in and make better use of those doors and we're succeeding in that. We just saw what could happen at a department store called Bon-Ton. They have 1800 dresses on the floor of one of their stores that we just had a discussion on and the performance there is just off the charts. So when we get the opportunity to see what happens when the appropriate inventory is in, both in style and in quantity and in price, it's an amazing sight.

So our initiative is to get greater door penetration and beyond that, there's a piece of our business that I didn't discuss earlier which is the social occasion dressing, that we have a good deal of flexibility in. We haven't penetrated that nearly enough, barely penetrated it. So there's growth in bridal and social and Jessica Howard and Eliza J, Jessica Simpson, Ellen Tracy and Andrew Marc. I'd say there's a whole untapped world for us.

Great. Congratulations on the quarter and good luck in the second. Thank you.

Thank you.

We'll move now to Dana Telsey with Telsey Advisory Group.

Good morning, everyone. Any sense in terms of as where you would target handbags and accessories as a percent of the business over time, where would you want it to be? And anything else for Calvin Klein or just in total? And anything else on product costs and how you're thinking about pricing, the holiday or even going into next year, what you're hearing about product costs. Thank you.

The percentage of our business that luggage and handbags could grow to, we're not a sleepy Company. We're growing every single day. To give you a percentage of what the entire Company, what this would represent as part of the entire Company would be inappropriate. I could easily tell you that this could be $200 million, $250 million business in a reasonable amount of time. And I'm sorry, the second question you had?

Product costs, what you're seeing, whether it's cotton price increase, how that's working.

Product, the cost of cotton is up. The cost of pretty much every fabrication is up. We negotiate to the best of our ability. Fortunately for us, it's a level playing field. In most classifications we're in we lead the charge, whether it's wool, whether it's cotton, whether it's leather, whether it's down, and we get the most competitive pricing. We get our delivery first. So in a competitive playing field, we generally win. And beyond that, we're garnering more market share on a regular basis and the more difficult it becomes to work overseas, the weaker companies collapse and our market share grows. So I'm not seeing this as a terrible thing for G-III.

Thank you.

Thank you, Dana.

Okay. We'll go to Paula Torch with Needham & Company.

Yes, good morning. Thank you for taking my question and congratulations. I was wondering if you could remind us of how many doors you are currently in for CK Sportswear and if you could also share with us some color on maybe classifications within sportswear, what's working and where do you see opportunities for fall?

Currently we're in close to 600 doors in sportswear or just north of 600 doors, coming off a base of a little more than 250 last year. The sportswear collection is working as a collection. All the pieces are -- they're pretty much compatible. What we're doing uniquely is we're blending in some cases our performance area with our sportswear area, which is shoring up the volume of both sectors. So we're very focused on where fashion is going and how we're able to lever our strength. Wovens are incredibly strong, so we -- if you have the opportunity to shop the stores, whether it be Macy's, Bon-Ton, Lord & Taylor, Dillard's, I think you'd see a big difference as to how the sportswear reads today compared to the past. We're growing our business by being able to replenish our core items quickly.

We have a good career business. We have suit separates which we haven't touched on that are performing very well. Our Company seems to be operating on all cylinders, in all brands, in all sectors. So uniquely, this is a good time. Generally, if you refer back to G-III conference calls of the past, when we were more coat driven, this wasn't a euphoric time. First quarter, you don't have a lot of visibility. You don't have a lot of shipping. Today I think you'd be able to read a different G-III.

Well, the product looks great and good luck for the second quarter.

Thank you.

At this time, we have no further questions. I'll turn the conference back over to our management.

Thank you all for participating this morning and have a good day.

That does conclude today's teleconference. Thank you for your participation.