Shares of G-III Apparel Group (NASDAQ: GIII) surged 6.53% in after-hours trading on Friday, rebounding from a significant intraday drop. The stock's recovery came after the company reported better-than-expected first-quarter earnings, despite withdrawing its annual adjusted profit forecast due to tariff concerns.

G-III, the company behind fashion brands such as DKNY, Calvin Klein, and Tommy Hilfiger, announced first-quarter earnings of $0.19 per share, surpassing analysts' expectations of $0.13 per share. However, the company withdrew its guidance for net income, adjusted net income, and adjusted EBITDA for the fiscal year 2026, citing uncertainty surrounding tariffs and related macroeconomic conditions.

The apparel maker revealed that current tariffs are expected to result in additional costs of approximately $135 million this year, primarily concentrated in the latter half. To mitigate these challenges, G-III is implementing strategies to reduce its exposure to tariffs. CEO Morris Goldfarb stated, "As a result, China will represent less than 20% of our production by year-end, down from nearly 90% several years ago." The company is also negotiating with retailers and selectively raising prices to offset the impact of tariffs. Despite these headwinds, G-III maintained its full-year sales outlook of $3.14 billion, slightly above analyst projections of $3.12 billion, which may have contributed to the after-hours stock rally.