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Here's Why G-III Apparel (GIII) is a Solid Investment Bet
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G-III Apparel Group, Ltd. (GIII - Free Report) seems to be on a roll, thanks to its robust business strategies, including digital expansion and brand strength. Management remains optimistic about the company’s diversified portfolio backed by its global power brands, namely DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris.
GIII also undertakes several strategies, including acquisitions and licensing of well-known brands, to expand its product portfolio. Such endeavors have enabled the company’s shares to increase 26% in the past three months, outperforming the industry’s 4.9% drop.
Let’s Delving Deep
Regarding its brand strength, G-III Apparel is on track with the development of the Nautica and Donna Karan brands. For Nautica, the company is working on bringing the Spring 2024 jeans line to life while for Donna Karan, it is leveraging the brand’s classic, contemporary and elevated feel and widening its appeal to a broader consumer base. Furthermore, the company has been maximizing its omnichannel opportunities and leveraging data for a while.
Image Source: Zacks Investment Research
G-III Apparel has announced a new licensing agreement for the Halston brand. The company has entered into a 25-year agreement with Xcel Brands to design and manufacture all categories with the choice to buy the brand at the end of the licensing term. Halston is an American heritage brand with a legacy of glamorous designs across a range of price points. The first deliveries are likely to be in 2024 fall.
We note that G-III Apparel has numerous growth opportunities including the Spring 2024 repositioning, expansion of the Donna Karan label and a new long-term license for the Nautica brand. Nautica is available in nearly 1300 freestanding stores and shops globally and boasts a sturdy digital presence in over 30 countries. The company is on track to produce Nautica products across several categories starting with jeanswear. This includes jeans and a complete range of corresponding lifestyle products. The company will later expand in a phased manner with other categories like sportswear, suit separates and dresses.
Overall, the company’s strategic priorities include driving power brands across categories, enhancing its portfolio via ownership of brands and licensing opportunities, expanding its global reach, maximizing omnichannel capabilities and scaling the private label business. G-III Apparel has also been making progress on rightsizing its inventory. As port congestion and lead times have normalized, management has adjusted the warehouse space appropriately. This trend is likely to continue throughout the year, driven by moderate freight costs.
What Else?
Markedly, G-III Apparel posted better-than-expected results in first-quarter fiscal 2024, wherein the top and the bottom line beat the Zacks Consensus Estimate. The company’s brands, DKNY, Karl Lagerfeld, Calvin Klein and Tommy Hilfiger outperformed management’s expectations, led by categories, such as dresses, sportswear and suit separates. Its North American DKNY and Karl Lagerfeld Paris businesses performed well.
For fiscal 2024, management projects net sales of about $3.29 billion, up from $3.23 billion recorded in fiscal 2023. Management anticipates gross-margin improvement in fiscal 2024, up nearly 350 basis points year over year, driven by highly moderated freight costs. Adjusted earnings per share is likely to come in the band of $2.80-$2.90 for the current fiscal year versus $2.85 earned in fiscal 2023. Management expects solid cash flows this year as inventory levels normalize.
Given all the aforesaid tailwinds, we believe that G-III Apparel will continue to perform well on the bourses. A VGM Score of A with an expected earnings growth rate of 15% bodes well for this current Zacks Rank #1 (Strong Buy) company.
RCL has a trailing four-quarter earnings surprise of 26.4%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and earnings per share (EPS) indicates increases of 48.7% and 162.9%, respectively, from the year-ago period’s reported levels.
Crocs, which offers casual lifestyle footwear and accessories, presently carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 15%.
The Zacks Consensus Estimate for Crocs’ current financial-year sales and EPS suggests growth of 13.1% and 5.6% from the year-ago period’s reported figure. CROX has a trailing four-quarter earnings surprise of 19.6%, on average.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 17% and 18.4%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.9%, on average.
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Here's Why G-III Apparel (GIII) is a Solid Investment Bet
G-III Apparel Group, Ltd. (GIII - Free Report) seems to be on a roll, thanks to its robust business strategies, including digital expansion and brand strength. Management remains optimistic about the company’s diversified portfolio backed by its global power brands, namely DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris.
GIII also undertakes several strategies, including acquisitions and licensing of well-known brands, to expand its product portfolio. Such endeavors have enabled the company’s shares to increase 26% in the past three months, outperforming the industry’s 4.9% drop.
Let’s Delving Deep
Regarding its brand strength, G-III Apparel is on track with the development of the Nautica and Donna Karan brands. For Nautica, the company is working on bringing the Spring 2024 jeans line to life while for Donna Karan, it is leveraging the brand’s classic, contemporary and elevated feel and widening its appeal to a broader consumer base. Furthermore, the company has been maximizing its omnichannel opportunities and leveraging data for a while.
Image Source: Zacks Investment Research
G-III Apparel has announced a new licensing agreement for the Halston brand. The company has entered into a 25-year agreement with Xcel Brands to design and manufacture all categories with the choice to buy the brand at the end of the licensing term. Halston is an American heritage brand with a legacy of glamorous designs across a range of price points. The first deliveries are likely to be in 2024 fall.
We note that G-III Apparel has numerous growth opportunities including the Spring 2024 repositioning, expansion of the Donna Karan label and a new long-term license for the Nautica brand. Nautica is available in nearly 1300 freestanding stores and shops globally and boasts a sturdy digital presence in over 30 countries. The company is on track to produce Nautica products across several categories starting with jeanswear. This includes jeans and a complete range of corresponding lifestyle products. The company will later expand in a phased manner with other categories like sportswear, suit separates and dresses.
Overall, the company’s strategic priorities include driving power brands across categories, enhancing its portfolio via ownership of brands and licensing opportunities, expanding its global reach, maximizing omnichannel capabilities and scaling the private label business. G-III Apparel has also been making progress on rightsizing its inventory. As port congestion and lead times have normalized, management has adjusted the warehouse space appropriately. This trend is likely to continue throughout the year, driven by moderate freight costs.
What Else?
Markedly, G-III Apparel posted better-than-expected results in first-quarter fiscal 2024, wherein the top and the bottom line beat the Zacks Consensus Estimate. The company’s brands, DKNY, Karl Lagerfeld, Calvin Klein and Tommy Hilfiger outperformed management’s expectations, led by categories, such as dresses, sportswear and suit separates. Its North American DKNY and Karl Lagerfeld Paris businesses performed well.
For fiscal 2024, management projects net sales of about $3.29 billion, up from $3.23 billion recorded in fiscal 2023. Management anticipates gross-margin improvement in fiscal 2024, up nearly 350 basis points year over year, driven by highly moderated freight costs. Adjusted earnings per share is likely to come in the band of $2.80-$2.90 for the current fiscal year versus $2.85 earned in fiscal 2023. Management expects solid cash flows this year as inventory levels normalize.
Given all the aforesaid tailwinds, we believe that G-III Apparel will continue to perform well on the bourses. A VGM Score of A with an expected earnings growth rate of 15% bodes well for this current Zacks Rank #1 (Strong Buy) company.
Eye These Solid Picks Too
Some other top-ranked companies are Royal Caribbean (RCL - Free Report) , Crocs (CROX - Free Report) and lululemon athletica (LULU - Free Report) .
Royal Caribbean sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL has a trailing four-quarter earnings surprise of 26.4%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and earnings per share (EPS) indicates increases of 48.7% and 162.9%, respectively, from the year-ago period’s reported levels.
Crocs, which offers casual lifestyle footwear and accessories, presently carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 15%.
The Zacks Consensus Estimate for Crocs’ current financial-year sales and EPS suggests growth of 13.1% and 5.6% from the year-ago period’s reported figure. CROX has a trailing four-quarter earnings surprise of 19.6%, on average.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 17% and 18.4%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.9%, on average.