G-III Apparel Group surprised Wall Street Tuesday morning with news of a weaker-than-anticipated second quarter.

Stocks of G-III were down more than 20 percent Tuesday afternoon after the company reported it was slashing its yearly guidance. The company, which previously predicted full-year earnings per share in the range of $2.55-$2.65, said it now expects EPS of just $2.20-$2.30 per share.

G-III, which licenses brands including Levi’s, Guess, and Calvin Klein, said it saw a reduction in early season outerwear orders from retailers and subsequently lowered its full-year revenue guidance.

Surely hoping for a cold winter, G-III CEO and President Morris Goldfarb said he saw opportunity in wholesale outerwear in the second half of the year, citing an increase in in-season replenishment among retailers.

“The fundamentals of our wholesale apparel and accessories business remain excellent,” said Goldfarb. “We believe our wholesale outerwear opportunity is intact for the full year despite a reduction by retailers in early season orders.”

Reported net sales slid 7 percent to $473.9 million last quarter, down from $442.3 million during the same period last year. The company incurred a net loss of $1.3 million, compared to a profit of $12.5 million a year ago. G-III said this was largely due to costs related to the ongoing purchase of Donna Karan from LVMH.

In July, G-III agreed to purchase the Donna Karan brand for $650 million, including debut. While LVMH had attempted to rejuvenate Donna Karan and its diffusion lines, even appointing Dao-Yi Chow and Maxwell Osborne of Public School as creative directors for DKNY, they were ultimately unable to reenergize the brand.

Despite this, Goldfarb is betting that Karan, in addition to its Calvin Klein, Kenneth Cole and Tommy Hilfiger brands, will help G-III reach revenue of $5 billion in five years, “our planned strategy for the acquisition of Donna Karan [is] to develop and build categories of Donna Karan women’s apparel and accessories throughout the world,” he said. “We believe that this set of opportunities supports an eventual doubling of our annual revenues to roughly $5 billion in five years.”

There is also a possibility that G-III will begin to rebound as Raf Simons takes over Calvin Klein as the creative director for the entire company. As a licensed manufacturer of Calvin Klein products, G-III can only benefit from a possible Calvin Klein resurgence under Simons.

By comparison, PVH Corp., which owns Calvin Klein, has had a very promising second quarter in part because of the announcement that Simons is taking over Klein. G-III might hope to experience some of the same graces in the months to come.

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