Annual Report for Fiscal Year Ending January 31, 2024 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

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Unless the context otherwise requires, "G-III," "Company," "us," "we" and "our" refer to G-III Apparel Group, Ltd. and its subsidiaries. References to fiscal years refer to the year ended or ending on January 31 of that year. For example, our fiscal year ending January 31, 2025 is referred to as "fiscal 2025."

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We consolidate the accounts of all of our wholly-owned and majority-owned subsidiaries. Our DKNY and Donna Karan business in China is operated by Fabco Holding B.V. ("Fabco"), a Dutch joint venture limited liability company that was 75% owned by us through April 16, 2024 and was treated as a consolidated majority-owned subsidiary. Effective April 17, 2024, we acquired the remaining 25% interest in Fabco that we 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 us from May 3, 2024 through July 18, 2024 and was accounted for using the cost method of accounting. Effective July 19, 2024, we acquired an additional 6.6% minority interest in AWWG, increasing our total ownership interest to 18.7% and, as a result, AWWG began being accounted for under the equity method of accounting. Karl Lagerfeld Holding B.V. ("KLH") is a Dutch limited liability company that was 19% owned by us through May 30, 2022 and was accounted for during that time using the equity method of accounting. Effective May 31, 2022, we acquired the remaining 81% interest in KLH that we did not previously own and, as a result, KLH began being treated as a consolidated wholly-owned subsidiary. KL North America B.V. ("KLNA") is a Dutch joint venture limited liability that was 49% owned by us and 51% indirectly owned by KLH through May 30, 2022 and was accounted for during that time using the equity method of accounting. KLNA operates the Karl Lagerfeld business in the United States, Mexico and Canada. Effective May 31, 2022, KLNA became an indirect wholly-owned subsidiary of us as a result of our acquisition of the remaining 81% interest in KLH we did not previously own. The results of KLH are included in our consolidated financial statements beginning May 31, 2022. All material intercompany balances and transactions have been eliminated.

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Each of Vilebrequin International SA ("Vilebrequin"), a Swiss corporation that is wholly-owned by us, KLH, Fabco, Sonia Rykiel, a Swiss Corporation that is wholly-owned by us, 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, Fabco, Sonia Rykiel and AWWG are and will be included in our financial statements for the year ended or ending closest to G-III's fiscal year. For example, for G-III's fiscal year ended January 31, 2025, the results of Vilebrequin, KLH, Fabco, Sonia Rykiel and AWWG are included for the year ended December 31, 2024. For the year ended January 31, 2023, the results of KLH, which includes KLNA, are included for the period from May 31, 2022 through December 31, 2022. The results of our previous 49% ownership interest in KLNA and 19% ownership interest in KLH are included for the period from January 1, 2022 through May 30, 2022. Our retail operations segment uses a 52/53-week fiscal year. Our fiscal year ended January 31, 2025 was a 52-week fiscal year for the retail operations segment. Our fiscal year ended January 31, 2024 was a 53-week fiscal year for the retail operations segment. For fiscal 2025 and 2024, the retail operations segment ended on February 1, 2025 and February 3, 2024, respectively. In fiscal 2024, the net sales and operating results generated by the 53^rd week of our retail operations segment were not material.

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The following presentation of management's discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our financial statements, the accompanying notes and other financial information appearing elsewhere in this Report.

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A discussion with respect to a comparison of the results of operations of fiscal 2024 compared to the fiscal year ended January 31, 2023 ("fiscal 2023"), other financial information related to fiscal 2023 and information with respect to Liquidity and Capital Resources at January 31, 2023 and for fiscal 2023 is contained under the headings "Results of Operations" and "Liquidity and Capital Resources" in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

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Overview

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G-III is a global leader in fashion with expertise in design, sourcing, distribution and marketing, which enables us to fuel growth across a portfolio of over 30 globally recognized owned and licensed brands anchored by our key owned brands DKNY, Donna Karan, Karl Lagerfeld and Vilebrequin as well as other major brands that currently drive our business. We develop product across a diverse range of lifestyle categories which include: outerwear, dresses, sportswear, suit separates, athleisure, jeans, swimwear, as well as handbags, footwear, small leather goods, cold weather accessories and luggage. Our brands are positioned to sell at various price points with global distribution across a diverse mix of channels and geographies to reach a broad range of consumers, with approximately 77% and 23% of our net sales in fiscal 2025 being generated in the United States and internationally, respectively. We also license the use of our trademarks to third parties for product categories and in regions where we believe our licensees' expertise can better serve our brands.

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Our owned brands include DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather and Sonia Rykiel. We have an extensive portfolio of well-known licensed brands, including Calvin Klein, Tommy Hilfiger, Nautica, Halston, Levi's, Kenneth Cole, Cole Haan, Vince Camuto, Dockers, Champion, Converse and BCBG. Through our licensed team sports business, we have partnerships with the National Football League, National Basketball Association, Major League Baseball, National Hockey League and over 150 U.S. colleges and universities. We also source and sell products to major retailers for their own private label programs.

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Our products are sold through a cross section of leading retailers such as Macy's, Bloomingdales, Dillard's, Hudson's Bay Company, Saks Fifth Avenue, Nordstrom, El Cortes Ingles, Kohl's, Saks OFF 5^TH, TJ Maxx, Marshall's Ross Stores, Burlington and Costco. We also sell our products using digital channels through retail partners such as macys.com, bloomingdales.com, nordstrom.com and dillards.com, each of which operates significant digital businesses. In addition, we sell to leading online retail partners such as Amazon, Fanatics, Zalando and Zappos.

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We also distribute apparel and other products directly to consumers through our own DKNY, Karl Lagerfeld, Karl Lagerfeld Paris 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.

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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.

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We believe that consumers prefer to buy brands they know, and we have continually sought to increase the portfolio of name brands we can offer through different tiers of retail distribution, for a wide array of products at a variety of price points. We have increased the portfolio of brands we offer through licenses, acquisitions and joint ventures. It is our objective to continue to expand our product offerings and we are continually discussing new licensing opportunities with brand owners and seeking to acquire established brands.

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Recent Developments

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Repositioning and Expansion of Donna Karan

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We acquired the DKNY and Donna Karan brands, two of the most iconic American fashion brands, in December 2016. We initially repositioned and relaunched DKNY and we have successfully grown the brand. In Spring 2024, we relaunched the Donna Karan brand, which was our most successful launch to date, with new designs supported by powerful ad campaigns. The brand is generating strong profitability for G-III with some of the highest AURs and sell-throughs across our portfolio. Our new Donna Karan product is currently being distributed in the United States through our diversified distribution network, including premier department stores, digital channels and our own Donna Karan website.

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We are focused on several initiatives to continue the momentum. The brand's relaunch was in North America only, and we expect to invest in growing the brand internationally as well as driving further awareness through marketing and expanding into complementary categories through licensing. Donna Karan is widely considered to be a top fashion brand and is recognized as one of the most famous designer names in American fashion. We believe that the strength of the Donna Karan brand, along with our success with the DKNY brand, demonstrates the potential for our new Donna Karan products.

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Strategic Investment in AWWG

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In May 2024, we acquired a 12.1% minority interest in AWWG for €50.0 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. In July 2024, we acquired an additional 6.6% minority interest in AWWG for €27.1 million ($29.1 million), increasing our total ownership interest to approximately 18.7%. This investment is intended to leverage AWWG's expertise and provide for synergies to support our international expansion priority through the development of our operational platform in Europe. Additionally, in the intermediate term, we will also work to introduce Hackett and Pepe Jeans in North America and we believe there is potential for both ours and AWWG's brands to grow in each other's respective markets as we unlock synergies between our platforms.

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License Agreements

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In fiscal 2025, we entered into two new license agreements, which further complement and diversify our existing portfolio, for (i) adult men's and women's apparel under the Converse brand and (ii) women's apparel under the BCBG brand. In fiscal 2024, we entered into license agreements (i) for women's apparel under the Nautica brand, (ii) to design and produce all categories of men's and women's product for the Halston brand and (iii) to design and produce men's and women's outerwear collections for the Champion brand.

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Each of these license agreements include an initial term of five-years with certain renewal options. The products produced under these license agreements are distributed, or expected to be distributed, in North America through our diversified distribution network, including premier department stores, digital channels, as well as other channels. Additionally, our Halston and Converse product is expected to be distributed globally (excluding distribution in Japan for Converse product). First deliveries of our Nautica product began in Spring 2024, and Halston and Champion product began in Fall 2024. First deliveries of our Converse and BCBG products are expected to begin in Fall 2025.

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We believe that significant opportunity exists in the categories subject to these license agreements where we have strong expertise, and the products produced, or expected to be produced, under these license agreements align with G-III's core competencies.

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Third Amended and Restated ABL Credit Agreement

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In June 2024, we amended and restated our senior secured asset-based revolving credit facility to provide for borrowings in an aggregate principal amount of up to $700.0 million and to extend the maturity date to June 2029. See "Liquidity and Capital Resources-Third Amended and Restated ABL Credit Agreement."

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Senior Secured Notes Redemption

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In August 2024, we used cash on hand and borrowings from our revolving credit facility to voluntarily redeem the entire $400.0 million principal amount of our 7.875% Senior Secured Notes due 2025 (the "Notes") at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest.

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Segments

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We report based on two segments: wholesale operations and retail operations.

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Our wholesale operations segment includes sales of products to retailers under owned, licensed and private label brands, as well as sales related to the Karl Lagerfeld and Vilebrequin businesses, including from retail stores operated by Vilebrequin and Karl Lagerfeld, other than sales of product under the Karl Lagerfeld Paris brand generated by our retail stores and digital sites. Wholesale revenues also include royalty revenues from license agreements related to our owned trademarks including DKNY, Donna Karan, Karl Lagerfeld, G.H. Bass, Andrew Marc, Vilebrequin and Sonia Rykiel in product categories we do not produce ourselves.

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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 January 31, 2025, our retail operations segment consisted of 49 company operated stores for our DKNY and Karl Lagerfeld Paris brands, substantially all of which are operated as outlet stores in North America.

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Trends Affecting Our Business

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Industry Trends

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Significant trends that affect the apparel industry include retail chains closing unprofitable stores, an increased focus by retail chains and others on expanding digital sales and providing convenience-driven fulfillment options, the continued consolidation of retail chains and the desire on the part of retailers to consolidate vendors supplying them.

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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.

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A number of retailers have experienced financial difficulties, which in some cases have resulted in bankruptcies, liquidations and/or store closings. 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.

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Retailers are seeking to differentiate their offerings by devoting more resources to the development of exclusive products, whether by focusing on their own private label products or on products produced exclusively for a retailer by a national brand manufacturer. Exclusive brands are only made available to a specific retailer. As a result, customers loyal to their brands can only find them in the stores of that retailer.

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We have attempted to respond to general trends in our industry by continuing to focus on selling products with recognized brand equity, by attention to design, quality and value and by improving our sourcing capabilities. We have also responded with the strategic acquisitions made by us, such as our purchase of the interests not previously owned by us that resulted in Karl Lagerfeld becoming our wholly-owned subsidiary, new license agreements entered into by us, such as our recent license agreements for the Nautica, Halston, Champion, Converse and BCBG brands and investments to accelerate our strategic priorities, such as our investment in AWWG. Our actions added to our portfolio of licensed and proprietary brands and helped diversify our business by adding new product lines and expanding distribution channels. We believe that our broad distribution capabilities help us to respond to the various shifts by consumers between distribution channels and that our operational capabilities will enable us to continue to be a vendor of choice for our retail partners.

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Calvin Klein and Tommy Hilfiger Licenses

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The sale of licensed products is an important part of our business. Net sales of products under the Calvin Klein and Tommy Hilfiger brands constituted approximately 34.0% of our net sales in fiscal 2025 and approximately 41.0% of our net sales in fiscal 2024.

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Our licenses for Calvin Klein and Tommy Hilfiger products expire on a staggered basis beginning on December 31, 2024 and continuing 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. PVH Corp., the owner of Calvin Klein and Tommy Hilfiger, has indicated publicly that it will produce these products itself once the license agreements expire. 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.

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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 expirations in our upcoming fiscal 2026 through fiscal 2028 years contributed the following net sales to our total net sales in in fiscal 2025:

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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 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.

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Political Environment

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The potential impact of new policies that may be implemented as a result of the new administration is currently uncertain. Any resulting changes in international trade relations, legislation and regulations (including those related to taxation and importation), economic and monetary policies, heightened diplomatic tensions or political and civil unrest, among other potential impacts, could adversely impact the global economy and our operating results.

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Tax Laws and Regulations

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In December 2022, the Council of the European Union ("EU") announced that EU member states reached an agreement to implement the minimum tax component of the Organization for Economic Co-operation and Development's international tax reform initiative, known as Pillar Two. The Pillar Two Model Rules provide for a global minimum tax of 15% for multinational enterprise groups and is effective for fiscal 2025. While these rules did not have a material impact

on our effective tax rate or financial results for fiscal 2025, we will continue to monitor our operations and evolving tax legislation in the jurisdictions in which we operate.

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In August 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law which contains several tax-related provisions. Among other effects, the IRA created an excise tax of 1% on stock repurchases by publicly traded U.S. corporations effective after December 31, 2022. The excise tax on common stock repurchases is classified as an additional cost of the stock acquired included in treasury stock in shareholders' equity. The excise tax did not have a material impact on our results of operations and cash flows as of and for the year ended January 31, 2025.

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Tariffs, Inflation and Interest Rates

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Recent developments in the U.S. trade policy have introduced uncertainty regarding the future of global trade relations. The current administration has made numerous announcements and taken actions to increase tariffs and impose other trade restrictions regarding imports into the United States. We source all of our products from a global network of independent, third-party manufacturers, primarily located in Asia. Any new or increased tariffs, quotas, embargoes or other trade barriers could impact our supply chain and cost structure. Additionally, retaliatory measures by affected countries could further disrupt our operations or reduce our competitiveness in international markets. We continue to monitor these changing tariffs and trade restrictions. We will attempt to mitigate the impact of new and increased tariffs by working with our long standing vendors to participate in the increased costs, increasing prices where possible and continuing to look for alternative sourcing options.

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Inflationary pressures have impacted the entire economy, including our industry. Recent high rates of inflation, including increased fuel and food prices, have led to a softening of consumer demand and increased promotional activity in the apparel categories we sell. Ongoing inflation may lead to further challenges to increase our sales and may also negatively impact our cost structure and labor costs in the future.

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The Federal Reserve increased interest rates several times in fiscal 2024 in response to concerns about inflation. The Federal Reserve began to decreased 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.

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Foreign Currency Fluctuation

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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.

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Supply Chain

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The global supply chain continues to be negatively impacted by various factors, including the ongoing disruptions in the Red Sea, port congestion and capacity shortages in Asia, and the recent and threatened port strikes in the United States, Gulf Coast and Canada.

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Conflicts in the Middle East have caused 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. Recent strike actions in the United States have caused importers to shift goods from the East Coast to the West Coast creating congestion at West Coast ports, as well as through Canadian ports which are smaller and unable to effectively manage the additional volume. This shift has led to congestion and rail delays within Canada. European ports are also experiencing congestion due to the disruption of timing and arrivals due to Red Sea diversions. This congestion may worsen in the first half of fiscal 2026.

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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 a significant loss 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.

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Additional tariffs on Chinese imports are causing importers to shift production to lower tariff territories further exacerbating ocean carrier's capacities. These tariffs are increasing costs for importers, impacting demand and affecting ocean container shipping due to limited alternatives for moving goods.

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International Conflicts

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We are monitoring the direct and indirect impacts from the military conflicts in Ukraine and the Middle East. These international conflicts and the continued threat of terrorism, heightened security measures and military action in response to acts of terrorism or civil unrest have disrupted commerce and intensified concerns regarding the United States and world economies. Our sales in Russia, Ukraine and Israel are not material to our financial results. However, the imposition of additional sanctions by the United States and/or foreign governments, as well as the sanctions already in place, could lead to restrictions related to sales and our supply chain for which the financial impact is uncertain. In addition,the continuation or escalation of these international conflicts, including the potential for additional countries to declare war against each other, may lead to further, broader unfavorable macroeconomic conditions, including unfavorable foreign exchange rates, increases in fuel prices, food shortages, a weakening of the worldwide economy, lower consumer demand and volatility in financial markets. The possible effects of these international conflicts could have a material adverse effect on our business and our results of operations.

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Critical Accounting Estimates

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The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Significant accounting policies employed by us, including the use of estimates, are presented in the notes to our consolidated financial statements.

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Critical accounting policies are those that are most important to the portrayal of our financial condition and our results of operations, and require management's most difficult, subjective and complex judgments, as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our most critical accounting estimates, discussed below, pertain to revenue recognition, accounts receivable, inventories, income taxes, goodwill and intangible assets, impairment of long-lived assets and equity awards. In determining these estimates, management must use amounts that are based upon its informed judgments and best estimates. We continually evaluate our estimates, including those related to customer allowances and discounts, product returns, bad debts and inventories, and carrying values of intangible assets. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

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Revenue Recognition

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We recognize revenue in accordance with Accounting Standard Codification ("ASC") Topic 606 - Revenue From Contracts With Customers ("ASC 606"). Under ASC 606, wholesale revenue is recognized when control transfers to the customer. We consider control to have been transferred when we have transferred physical possession of the product, we have 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 considerations arising from implicit or explicit obligations. Variable consideration includes trade discounts, end of season markdowns, sales allowances, cooperative advertising, return liabilities and other customer allowances. We estimate the anticipated variable consideration and record this estimate as a reduction of revenue in the period the related product revenue is recognized.

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Variable consideration, primarily related to sales discounts and allowances, is estimated based on historical experience, current contractual and statutory requirements, specific known events and industry trends. The reserves for variable consideration are recorded under customer refund liabilities. Historical return rates are calculated on a product line basis. The remainder of the historical rates for variable consideration are calculated by customer by product lines.

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We recognize retail sales when the customer takes possession of the goods and tenders payment, generally at the point of sale. Digital revenues from customers through our digital platforms are recognized when the customer takes possession of the goods. Our sales are recorded net of applicable sales taxes.

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Both wholesale revenues and retail store revenues are shown net of returns, discounts and other allowances. We classify cooperative advertising as a reduction of net sales.

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Accounts Receivable

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In the normal course of business, we extend credit to our wholesale customers based on pre-defined credit criteria. Accounts receivable, as shown on our consolidated balance sheet, are net of an allowance for doubtful accounts. In circumstances where we are aware of a specific customer's inability to meet its financial obligation (such as in the case of bankruptcy filings, extensive delay in payment or substantial downgrading by credit sources), a specific reserve for bad debts is recorded against amounts due to reduce the net recognized receivable to the amount reasonably expected to be collected. For all other wholesale customers, an allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the date of the financial statements, assessments of collectability based on historical trends and an evaluation of the impact of economic conditions.

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Our financial instruments consist of trade receivables arising from revenue transactions in the ordinary course of business. We consider our trade receivables to consist of two portfolio segments: wholesale and retail trade receivables. Wholesale trade receivables result from credit we extend to our wholesale customers based on pre-defined criteria and are generally due within 60 days. 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.

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Inventories

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Wholesale inventories and Karl Lagerfeld inventories are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value, which comprises a significant portion of our inventory. Retail and Vilebrequin inventories are stated at the lower of cost (determined by the weighted average method) or net realizable value.

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We continually evaluate the composition of our inventories, assessing slow-turning, ongoing product as well as fashion product from prior seasons. The net realizable value of distressed inventory is based on historical sales trends of our individual product lines, the impact of market trends and economic conditions, expected permanent retail markdowns and the value of current orders for this type of inventory. A provision is recorded to reduce the cost of inventories to the estimated net realizable values, if required.

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Income Taxes

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As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax expense, together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet.

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Goodwill and Intangible Assets

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ASC Topic 350 - Intangibles - Goodwill and Other ("ASC 350") requires that goodwill and intangible assets with an indefinite life be tested for impairment at least annually and are required to be written down when impaired. We perform our test in the fourth fiscal quarter of each year, or more frequently, if events or changes in circumstances indicate the carrying amount of such assets may be impaired. Goodwill and intangible assets with an indefinite life are tested for

impairment by comparing the fair value of the reporting unit with its carrying value. We have identified two reporting units, which are wholesale operations and retail operations. Fair value is generally determined using discounted cash flows, market multiples and market capitalization. Significant estimates used in the fair value methodologies include estimates of future cash flows, future short-term and long-term growth rates, weighted average cost of capital and estimates of market multiples of the reportable unit. If these estimates or their related assumptions change in the future, we may be required to record impairment charges for intangible assets with an indefinite life and any future goodwill.

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We perform our annual test for goodwill as of January 31 of each year. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. The evaluation consists of either using a qualitative approach to determine whether it is more likely than not that the fair value of the assets is less than their respective carrying values or a quantitative impairment test, if necessary. In performing a qualitative evaluation, we consider many factors in evaluating whether the carrying value of goodwill may not be recoverable, including declines in our stock price and market capitalization in relation to our book value and macroeconomic conditions affecting our business. In performing a quantitative evaluation, our first step in the goodwill impairment review is to compare the fair value of the wholesale operations reporting unit to our carrying value. If the fair value of the reporting unit exceeds our carrying value, goodwill is not impaired and no further testing is required. To estimate the fair value of a reporting unit for the purposes of our annual or periodic analyses, we make estimates and judgments about the future cash flows of that reporting unit. Although our cash flow forecasts are based on assumptions that are consistent with our plans and estimates we are using to manage the underlying businesses, there is significant exercise of judgment involved in determining the cash flows attributable to a reporting unit. In addition, we make certain judgments about allocating shared assets to the estimated balance sheets of our reporting units. We also consider our and our competitor's market capitalization on the date we perform the analysis. Changes in judgment on these assumptions and estimates could result in a goodwill impairment charge.

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We also perform our annual test for intangible assets with indefinite lives as of January 31 of each year using a qualitative evaluation or a quantitative test using a relief from royalty method, another form of the income approach. The relief from royalty method requires assumptions regarding industry economic factors and future profitability. Critical estimates in valuing intangible assets include future expected cash flows from license agreements, trade names and customer relationships. In addition, other factors considered are the brand awareness and market position of the products sold by the acquired companies and assumptions about the period of time the brand will continue to be used in the combined company's product portfolio. Management's estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable.

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If we did not appropriately allocate these components or we incorrectly estimate the useful lives of these components, our computation of amortization expense may not appropriately reflect the actual impact of these costs over future periods, which may affect our results of operations.

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Trademarks having finite lives are amortized over their estimated useful lives and measured for impairment when events or circumstances indicate that the carrying value may be impaired.

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We have allocated the purchase price of the companies we acquired to the tangible and intangible assets acquired and liabilities we assumed, based on their estimated fair values. These valuations require management to make significant estimations and assumptions, especially with respect to intangible assets.

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The fair values assigned to the identifiable intangible assets acquired were based on assumptions and estimates made by management using unobservable inputs reflecting our own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available.

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Annual Goodwill Impairment Testing

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We performed our annual test of our wholesale reporting unit as of January 31, 2023 by electing to bypass the qualitative assessment and proceed directly to the quantitative impairment test using a discounted cash flows method to estimate the fair value of our wholesale reporting unit. We made this election due to the decline in our market capitalization.

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The fair value of the wholesale reporting unit for goodwill impairment testing was determined using an income approach and validated using a market approach. The income approach was based on discounted projected future (debt-free) cash flows for the reporting unit. The discount rate applied to these cash flows were based on the weighted average cost of capital for the wholesale reporting unit, which takes market participant assumptions into consideration, inclusive of a Company-specific 7.5% risk premium to account for the additional risk of uncertainly perceived by market participants related to our overall cash flows. Estimated future operating cash flows were discounted at a rate of 17.5% to account for the relative risks of the estimated future cash flows. For the market approach, used to validate the results of the income approach method, we used the guideline company method, which analyzes market multiples of adjusted earnings before interest, taxes, depreciation and amortization for a group of comparable public companies.

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As a result of our fiscal 2023 annual impairment test, we recorded a $347.2 million non-cash impairment charge during our fourth quarter of fiscal 2023 to fully impair the carrying value of our goodwill, which was included in asset impairments in our consolidated statements of operations and comprehensive income (loss). This impairment charge was recorded to our wholesale operations segment.

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The carrying value of our goodwill was fully impaired in fiscal 2023 as a result of our annual impairment test. There was no new goodwill recognized in fiscal 2024 or fiscal 2025.

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Annual Indefinite-Lived Intangible Assets Impairment Testing

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We performed our annual test of our indefinite-lived trademarks as of January 31, 2025 and January 31, 2024 using a qualitative evaluation or a quantitative impairment test using a relief from royalty method, another form of the income approach. The relief from royalty method requires assumptions regarding industry economic factors and future profitability. Our fiscal 2025 testing determined that the fair value of each of our indefinite-lived intangible assets substantially exceeded its carrying value except for our Sonia Rykiel trademark. As a result of our fiscal 2025 annual impairment test, we recorded a $7.4 million non-cash impairment charge during our fourth quarter of fiscal 2025 to fully impair the carrying value of our Sonia Rykiel trademark, which was included in asset impairments in our consolidated statements of operations and comprehensive income (loss). Our fiscal 2024 testing determined that the fair value of each of our indefinite-lived intangible assets substantially exceeded its carrying value except for our Sonia Rykiel trademark. As a result of our fiscal 2024 annual impairment test, we recorded a $5.9 million non-cash impairment charge during our fourth quarter of fiscal 2024 to partially impair the carrying value of our Sonia Rykiel trademark, which was included in asset impairments in our consolidated statements of operations and comprehensive income (loss). These impairment charges were recorded to our wholesale operations segment.

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Our indefinite-lived trademark balance is primarily composed of the Donna Karan/DKNY trademarks that were acquired in fiscal 2017 and the Karl Lagerfeld trademark that was acquired in fiscal 2023.

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The fair value of our indefinite-lived intangible assets are considered a Level 3 valuation in the fair value hierarchy.

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Impairment of Long-Lived Assets

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All property and equipment and other long-lived assets are reviewed for potential impairment when events or changes in circumstances indicate that the asset's carrying value may not be recoverable. If such indicators are present, it is determined whether the sum of the estimated undiscounted future cash flows attributable to such assets are less than the carrying value of the assets. A potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets.

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In fiscal 2025, we recorded a $0.8 million impairment charge primarily related to leasehold improvements and furniture and fixtures at certain retail stores as a result of their performance.

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In fiscal 2024, we recorded a $1.3 million impairment charge primarily related to leasehold improvements, furniture, computer hardware and fixtures and operating lease assets at certain retail stores as a result of their performance.

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Equity Awards

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Restricted Stock Units

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Restricted stock units ("RSUs") are time based awards that do not have market or performance conditions and generally either (i) cliff vest after three years or (ii) vest over a three year period. The grant date fair value for RSUs are based on the quoted market price on the date of grant. Compensation expense for RSUs are recognized in the consolidated financial statements on a straight-line basis over the service period based on their grant date fair value.

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Performance Stock Units

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Performance stock units ("PSUs") vest after a three year performance period during which certain earnings before interest and taxes and return on invested capital performance conditions must be satisfied for vesting to occur. PSUs granted in fiscal 2020 are also subject to a lock up period that prevents the sale, contract to sell or transfer shares for two years subsequent to the date of vesting. Compensation expense for PSUs are recognized in the consolidated financial statements over the service period under the accelerated attribution method and based on an estimated percentage of achievement of certain pre-established goals.

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Special Performance Stock Units

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Special performance stock units ("SPSUs") were granted to Morris Goldfarb, our Chairman and Chief Executive Officer, in fiscal 2024 in recognition of the significantly reduced annual incentive cash payments that Mr. Goldfarb voluntarily agreed to under the terms of his new employment agreement entered into in August 2023. These SPSUs may be earned if certain stock price, relative Total Shareholder Return target and service conditions are achieved. These awards may vest from time to time beginning on the third anniversary of the effective date of the award through the fifth anniversary of the effective date of the award. For restricted stock units with market conditions, we estimate the grant date fair value using a Monte Carlo simulation model. This valuation methodology utilizes the closing price of our common stock on grant date and several key assumptions, including expected volatility of our stock price, and risk-free rates of return. This valuation is performed with the assistance of a third party valuation specialist. Compensation expense for SPSUs are recognized in the consolidated financial statements over the service period under the accelerated attribution method.

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Results of Operations

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The following table sets forth our operating results both in dollars and as a percentage of our net sales for the fiscal years indicated below:

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Year ended January 31, 2025 ("fiscal 2025") compared to year ended January 31, 2024 ("fiscal 2024")

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Net sales for fiscal 2025 increased to $3.18 billion from $3.10 billion in the prior year. Net sales of our segments are reported before intercompany eliminations.

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Net sales of our wholesale operations segment increased to $3.08 billion from $3.01 billion 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 increase in sales was driven by an increase in the number of units we shipped at a slightly lower average price. The increase in net sales of our wholesale operations segment was primarily the result of increases in net sales of $254.4 million of our DKNY, Donna Karan and Karl Lagerfeld products. We also had an increase in net sales of $65.3 million from sales of licensed products for our newly launched Nautica, Halston and Champion brands. The increase in sales of DKNY products was primarily related to performance wear, sportswear and denim categories. The increase in net sales of Donna Karan products was primarily related to dresses, suits and sportswear categories. The increase in sales of Karl Lagerfeld products was primarily related to handbags, sportswear and women's shoes categories. These increases were partially offset by decreases in net sales of $188.4 million of Calvin Klein and Tommy Hilfiger licensed products, as well as a decrease in net sales of $40.6 million of Guess licensed products as our licenses expired in December 2023.

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Net sales of our retail operations segment increased to $166.5 million from $148.4 million in the same period last year. The number of retail stores operated by us decreased from 53 at January 31, 2024 to 49 at January 31, 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 by strong double-digits at our Karl Lagerfeld Paris and DKNY stores compared to the same period in the prior year.

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Gross profit was $1.30 billion, or 40.8% of net sales, for fiscal 2025 compared to $1.24 billion, or 40.1% of net sales, last year. The gross profit percentage in our wholesale operations segment was 39.4% for the year ended January 31, 2025 compared to 38.9% for the year ended January 31, 2024. The gross profit percentage in the current year period was positively impactedby a shift in sales to product related to our owned brands which have no royalty costs, as well as a more favorable product mix. The gross profit percentage in our retail operations segment was 50.4% for the year ended January 31, 2025 compared to 48.1% for the same period last year. The gross profit percentage in our retail operations segment was positively impacted from a better product assortment.

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Selling, general and administrative expenses increased to $969.8 million in fiscal 2025 from $924.2 million in fiscal 2024. Selling, general and administrative expenses of our wholesale operations segment increased to $876.3 million from $826.9 million in the comparable period last year. The increase in expenses was primarily due increases of (i) $21.3 million in advertising expenses, primarily due to the relaunch of the Donna Karan brand and higher spending on the DKNY brand that was partially offset by reduced royalty advertising expenses resulting from lower net sales of licensed product, (ii) $21.5 million in compensation expenses, primarily due to an increase in salaries and share-based compensation expense and (iii) $5.3 million in bad debt expense primarily related to allowances recorded against the outstanding receivables of certain department store customers due to bankruptcy, including Hudson's Bay Company. Selling, general and administrative expenses of our retail operations segment decreased to $93.5 million from $97.3 million in the comparable period last year. The decrease in expenses was primarily due to decreases of (i) $3.8 million in compensation expenses, primarily due to a decrease in salaries and (ii) $3.1 million in third-party warehouse and facility expenses. These decreases were partially offset by an increase of $3.0 million in advertising expenses.

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Depreciation and amortization was $27.4 million in fiscal 2025 compared to $27.5 million in fiscal 2024. Depreciation and amortization of our wholesale operations segment was $23.0 million in fiscal 2025 compared to $22.5 million in fiscal 2024. Depreciation and amortization of our retail operations segment was $4.5 million in fiscal 2025 compared to $5.0 million in fiscal 2024.

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In fiscal 2025, we recorded $8.2 million of asset impairments. This charge is primarily comprised of (i) a $7.4 million impairment charge related to our Sonia Rykiel trademark and (ii) a $0.8 million impairment charge related to leasehold improvements and furniture and fixtures at certain stores as a result of their performance. In fiscal 2024, we recorded $6.8 million of asset impairments. This charge is primarily comprised of (i) a $5.9 million impairment charge related to our Sonia Rykiel trademark and (ii) a $1.3 million impairment charge related to leasehold improvements, furniture and fixtures, computer hardware and operating lease assets at certain retail stores as a result of their performance. The annual test of our trademarks resulted in an impairment of the trademark based upon our most recent forecasted results and was impacted by higher interest rates. Asset impairments are recorded primarily in our wholesale operations segment.

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Other loss was $4.4 million in fiscal 2025 compared to other loss of $3.1 million in fiscal 2024. Other loss in the current year period consisted of $3.3 million of foreign currency losses during fiscal 2025 compared to $0.1 million of foreign currency income during fiscal 2024. Additionally, we recorded $1.9 million in losses from unconsolidated affiliates during fiscal 2025 compared to $5.6 million in losses from unconsolidated affiliates in fiscal 2024. In fiscal 2024, other loss also included a $1.0 million gain recorded from the reduction of the earnout liability related to our acquisition of Sonia Rykiel in fiscal 2022.

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Interest and financing charges, net for fiscal 2025, were $18.8 million compared to $39.6 million for fiscal 2024. The decrease in interest and financing charges was primarily due to a $11.3 million decrease in interest charges resulting from the redemption of the entire $400 million principal amount of the Notes in August 2024 that was partially offset by increased interest charges from higher average borrowings under our revolving credit facility in the current year as well as a decrease of $3.8 million in interest charges related to the LVMH Note as a result of the repayment of $125 million in principal of this Note in fiscal 2024. Additionally, we had a $4.2 million increase in investment income from having a larger cash position in fiscal 2025 compared to fiscal 2024. These items were partially offset by a $1.6 million charge to interest expense from extinguished debt issuance costs upon the redemption of the Notes.

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Income tax expense for fiscal 2025 was $76.6 million compared to $65.9 million for the prior year. Our effective tax rate was 28.4% in fiscal 2025 compared to 27.4% in the prior year. The increase in our effective tax rate is primarily due to the impact of permanent tax adjustments on the annual effective tax rate, offset by a reduction in unrecognized income tax benefits related to our foreign exposures.

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Liquidity and Capital Resources

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Cash Availability

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We rely on our cash flows generated from operations, cash and cash equivalents and the borrowing capacity under our revolving credit facility to meet the cash requirements of our business. The cash requirements of our business are primarily

related to the seasonal buildup in inventories, compensation paid to employees, occupancy, payments to vendors in the normal course of business, capital expenditures, interest payments on debt obligations and income tax payments. We have also used cash to repurchase our shares, make strategic investments and redeem the Notes.

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As of January 31, 2025, we had cash and cash equivalents of $181.4 million and availability under our revolving credit facility of approximately $600.0 million. As of January 31, 2025, we were in compliance with all covenants under our revolving credit facility.

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Senior Secured Notes

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In August 2024, we used cash on hand and borrowings from our revolving credit facility to voluntarily redeem the entire $400.0 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, we 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 our results of operations.

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Third Amended and Restated ABL Credit Agreement

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On June 4, 2024, our subsidiaries, G-III Leather Fashions, Inc., Riviera Sun, Inc., AM Retail Group, Inc. and The Donna Karan Company Store LLC (collectively, the "Borrowers"), entered into the third amended and restated credit agreement (the "Third ABL Credit Agreement") with the lenders named therein and with JPMorgan Chase Bank, N.A., as administrative agent. The Third ABL Credit Agreement is a five-year senior secured asset-based revolving credit facility providing for borrowings in an aggregate principal amount of up to $700.0 million. We and certain of our wholly-owned domestic subsidiaries, as well as G-III Apparel Canada ULC (collectively, the "Guarantors"), are guarantors under the Third ABL Credit Agreement.

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The Third ABL Credit Agreement amends and restates the Second Amended Credit Agreement, dated as of August 7, 2020 (as amended, supplemented or otherwise modified from time to time prior to June 4, 2024, the "Second Credit Agreement"), by and among the Borrowers and the Guarantors, the lenders from time-to-time party thereto, and JPMorgan Chase Bank, N.A., in its capacity as the administrative agent thereunder. The Second Credit Agreement provided for borrowings of up to $650 million and was due to expire on August 7, 2025. The Third ABL Credit Agreement extends the maturity date to June 2029, subject to a springing maturity date as defined within the credit agreement.

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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.

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The Third ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors. In addition to paying interest on any outstanding borrowings under the Third ABL Credit Agreement, we are required to pay a commitment fee to the lenders under the credit agreement with respect to the unutilized commitments. The commitment fee accrues at a tiered rate equal to 0.375% per annum on the average daily amount of the available commitments when the average usage is less than 50% of the total available commitments and decreases to 0.25% per annum on the average daily amount of the available commitments when the average usage is greater than or equal to 50% of the total available commitments.

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The Third ABL Credit Agreement contains covenants that, among other things, restricts our ability to, subject to specified exceptions, incur additional debt; incur liens; sell or dispose of certain assets; merge with other companies; liquidate or dissolve the Company; acquire other companies; make loans, advances, or guarantees; and make certain investments. In certain circumstances, the revolving credit facility also requires us 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. As of January 31, 2025, we were in compliance with these covenants.

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As of January 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 January 31, 2025, there were outstanding trade and standby letters of credit amounting to $0.3 million and $2.6 million, respectively.

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At the date of the refinancing of the Second ABL Credit Agreement, we had $1.9 million of unamortized debt issuance costs remaining from the Second ABL Credit Agreement. There was no extinguishment of any amount of the unamortized debt issuance costs remaining from the Second ABL Credit Agreement. We incurred new debt issuance costs totaling $3.8 million related to the Third ABL Credit Agreement. We have a total of $5.6 million debt issuance costs related to our Third ABL Credit Agreement. As permitted under ASC 835, the debt issuance costs have been deferred and are presented as an asset which is amortized ratably over the term of the Third ABL Credit Agreement.

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LVMH Note

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We issued to LVMH, as a portion of the consideration for the acquisition of DKI, a junior lien secured promissory note in favor of LVMH in the principal amount of $125 million (the "LVMH Note") that bore interest at the rate of 2% per year. $75 million of the principal amount of the LVMH Note was paid on June 1, 2023 and the remaining $50 million of such principal amount was paid on December 1, 2023.

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Unsecured Loans

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Several of our foreign entities borrow funds under various unsecured loans of which a portion is to provide funding for operations in the normal course of business while other loans are European state backed loans that were part of COVID-19 relief programs. In the aggregate, we are currently required to make quarterly installment payments of principal in the amount of €0.8 million. 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 January 31, 2025, we had an aggregate outstanding balance of €5.9 million ($6.2 million) under these various unsecured loans.

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Overdraft Facilities

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During fiscal 2021 and 2025, 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 Euro Interbank Offered Rate plus a margin of 1.75% per annum, payable quarterly. The facility may be cancelled at any time by us or HSBC Bank. As part of a COVID-19 relief program, certain of our foreign entities have also 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 January 31, 2025, we had no borrowings drawn under these various facilities.

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Foreign Credit Facilities

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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 Euro Interbank Offered Rate ("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 January 31, 2025, we had no borrowings under these credit facilities.

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Outstanding Borrowings

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Our primary operating cash requirements are to fund our seasonal buildup in inventories and accounts receivable, primarily during the second and third fiscal quarters each year. Due to the seasonality of our business, we generally reach our peak borrowings under our asset-based credit facility during our third fiscal quarter. The primary sources to meet our operating cash requirements have been borrowings under this credit facility and cash generated from operations.

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We had no borrowings outstanding under our ABL Credit Agreement as of both January 31, 2025 and 2024. 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 January 31, 2024. Our contingent liability under open letters of credit was approximately $3.0 million at January 31, 2025 and $6.9 million at January 31, 2024. The amount outstanding under the LVMH Note was repaid during fiscal 2024. We had an aggregate of €5.9 million ($6.2 million) and €8.0 million ($8.8 million) outstanding under our various unsecured loans as of January 31, 2025 and January 31, 2024, respectively. We also had no borrowings outstanding and €2.4 million ($2.7 million) outstanding under our overdraft facilities as of January 31, 2025 and January 31, 2024, respectively and no borrowings outstanding and €8.1 million ($8.9 million) outstanding under our foreign credit facilities as of January 31, 2025 and 2024, respectively.

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Share Repurchase Program

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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 year ended January 31, 2025, we acquired 2,209,832 of our shares of common stock for an aggregate purchase price of $60.0 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 January 31, 2025, we had remaining 7,790,168 shares that are authorized for purchase under this program. As of March 19, 2025, we had 43,883,207 shares of common stock outstanding.

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Cash from Operating Activities

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We generated $316.4 million of cash from operating activities in fiscal 2025, primarily as a result of our net income of $193.6 million and decreases of $42.3 million in inventories and $20.0 million in prepaid expenses and other current assets as well as an increase of $50.1 million in accounts payable and accrued expenses. We also generated cash from operating activities as a result of non-cash charges primarily related to depreciation and amortization of $27.4 million and share-based compensation of $28.9 million. These items were offset, in part, by an increase of $62.4 million in accounts receivable.

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Net cash provided by operating activities decreased $271.2 million in fiscal 2025 compared to the prior year. This decrease is primarily driven by an increase in accounts receivable due to higher net sales in this year's fourth quarter compared to the prior year's fourth quarter and a smaller reduction in inventories compared to the prior year. Fiscal 2024 and fiscal 2023 experienced elevated inventory levels due to supply chain issues compared to our normalized inventory level in fiscal 2025. These decreases were offset, in part, by an increase in our net income and a reduction in prepaid expenses and other current assets. Our prepaid expenses and other current assets decreased primarily from decreases in prepaid royalties and advertising related to our Calvin Klein licenses, accruals for returns and restocking expenses and the receipt of a refund from a customs examination.

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Cash from Investing Activities

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We used $148.2 million of cash in investing activities during fiscal 2025 primarily as a result of our $84.4 million investment in AWWG and $20.0 million investment in a private retail company. We also used $41.5 million for capital expenditures primarily related to information technology expenditures and fixturing costs at department stores.

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Cash from Financing Activities

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In fiscal 2025, we used $485.5 million of cash in financing activities primarily as a result of $400 million of cash used to redeem the entire principal amount of the Notes. In addition, we used $60.0 million of cash to repurchase 2,209,832 shares of our common stock under our share repurchase program, had net borrowings of $13.6 million under our foreign facilities and $7.6 million for taxes paid in connection with net share settlements of stock grants that vested.

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Financing Needs

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We believe that our cash on hand and cash generated from operations, together with funds available under the ABL Credit Agreement, are sufficient to meet our expected operating and capital expenditure requirements. We may seek to acquire other businesses in order to expand our product offerings. We may need additional financing in order to complete one or more acquisitions. We cannot be certain that we will be able to obtain additional financing, if required, on acceptable terms or at all.

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Recent Accounting Pronouncements

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See Note 1.19 - Effects of Recently Adopted and Issued Accounting Pronouncements in the accompanying notes to our consolidated financial statements in this Annual Report on Form 10-K for a description of recently adopted accounting pronouncements and issued accounting pronouncements that we believe may have an impact on our consolidated financial statements when adopted.

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Tabular Disclosure of Contractual Obligations

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As of January 31, 2025, our contractual obligations were as follows (in millions):

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