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Here's Why G-III Apparel (GIII) Is Rallying Ahead of Industry
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Shares of G-III Apparel Group, Ltd. (GIII - Free Report) have surged a whopping 83% year to date, thanks to its robust business strategies with digital expansion and brand strength. The company has been undertaking several strategies, including acquisitions and licensing of well-known brands, to expand its product portfolio.
Management remains optimistic about the company’s diversified portfolio of key brands, namely DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Nautica and Halston. Meanwhile, the industry fell 3.6% in this year so far.
A VGM Score of A further speaks volumes for this current Zacks Rank #1 (Strong Buy) company. Analysts seem optimistic about the company. The Zacks Consensus Estimate for fiscal 2024 sales and earnings per share (EPS) is currently pegged at $3.30 billion and $3.18, respectively. These estimates show corresponding increases of 7.9% and 11.6% year over year. The consensus mark for fiscal 2025 sales and EPS currently stand at $3.36 billion and $3.34, respectively, reflecting corresponding increases of 2% and 5.2% year over year.
Let’s Delve Deeper
G-III Apparel’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 the inventory.
Image Source: Zacks Investment Research
We note that the company has numerous growth opportunities including the repositioning and expansion of the Donna Karan label and a long-term license for the Nautica brand. Nautica is available in nearly 1300 freestanding stores and shops globally as well as boasts a sturdy digital presence in more than 30 countries. G-III Apparel will produce Nautica products across several categories starting with jeanswear. This includes jeans and a complete range of corresponding lifestyle products. The company will launch in more than 200 partner doors and build 150 branded shop-in-shops. The jeans will launch in more than 200 partner doors and build 60 branded shop-in-shops.
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. First deliveries are likely to be in 2024 fall. Management has announced a new multi-year license agreement with HanesBrands to manufacture an outerwear collection for the Champion brand. The company will create quality heritage pieces to expand Champions' lifestyle offering. The product will be distributed via its diverse channels across North America and Champions' global network with first deliveries for fall of 2024.
With respect to the company’s brand progress, the key brands like DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Nautica and Halston are likely to perform well. Expanding the company’s owned brands, including DKNY, Karl Lagerfeld, Donna Karan and Vilebrequin, is a priority as these brands represent an important long-term profit. Also, these brands enable the company to further widen its global reach. In fiscal 2024, with the ownership of the whole Karl Lagerfeld brand, the company’s international sales will be up 20% versus the prior year. Management believes this business can expand to more than $3 billion in annual revenues over time.
What’s More?
G-III Apparel posted better-than-expected results in second-quarter fiscal 2024, wherein the top and the bottom line beat the Zacks Consensus Estimate and improved year over year. Gross profit jumped 20.9% year over year while the gross margin increased 410 basis points (bps). The wholesale segment’s gross margin was 40.6%, up 440 bps year over year.
The company’s results were driven by strength in outerwear and dressier categories including sportswear, dresses and suit separates across its brands DKNY, Karl Lagerfeld, Calvin Klein, Tommy Hilfiger and Levi's. Strength across denim, footwear and team sports also drove the results. Looking into the third quarter, the company’s order book seems good and inventory is aligned properly. The company is well positioned for the fall and holiday season.
For fiscal 2024, management projects net sales to be about $3.30 billion and net income to be $145-$150 million, or between $3.05 per share and $3.15 per share. This compares favorably to net sales of $3.23 billion and a net loss of $(133.1) million, or $(2.79) per share, for fiscal 2023. It expects continued gross margin improvement for the rest of the fiscal year, and projects ending the year with the gross margin being up nearly 450 bps year over year. The second half of fiscal 2024 gross margin will benefit from moderated freight costs.
Given all the aforesaid tailwinds, we believe G-III Apparel will continue to perform well on the bourses.
RCL has a trailing four-quarter earnings surprise of 28.5%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 55.2% and 182.8%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 35.6% and 20.5%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 6.8%, on average.
Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 17.3%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.8% and 13.7%, respectively, from the year-ago corresponding figures.
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Here's Why G-III Apparel (GIII) Is Rallying Ahead of Industry
Shares of G-III Apparel Group, Ltd. (GIII - Free Report) have surged a whopping 83% year to date, thanks to its robust business strategies with digital expansion and brand strength. The company has been undertaking several strategies, including acquisitions and licensing of well-known brands, to expand its product portfolio.
Management remains optimistic about the company’s diversified portfolio of key brands, namely DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Nautica and Halston. Meanwhile, the industry fell 3.6% in this year so far.
A VGM Score of A further speaks volumes for this current Zacks Rank #1 (Strong Buy) company. Analysts seem optimistic about the company. The Zacks Consensus Estimate for fiscal 2024 sales and earnings per share (EPS) is currently pegged at $3.30 billion and $3.18, respectively. These estimates show corresponding increases of 7.9% and 11.6% year over year. The consensus mark for fiscal 2025 sales and EPS currently stand at $3.36 billion and $3.34, respectively, reflecting corresponding increases of 2% and 5.2% year over year.
Let’s Delve Deeper
G-III Apparel’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 the inventory.
Image Source: Zacks Investment Research
We note that the company has numerous growth opportunities including the repositioning and expansion of the Donna Karan label and a long-term license for the Nautica brand. Nautica is available in nearly 1300 freestanding stores and shops globally as well as boasts a sturdy digital presence in more than 30 countries. G-III Apparel will produce Nautica products across several categories starting with jeanswear. This includes jeans and a complete range of corresponding lifestyle products. The company will launch in more than 200 partner doors and build 150 branded shop-in-shops. The jeans will launch in more than 200 partner doors and build 60 branded shop-in-shops.
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. First deliveries are likely to be in 2024 fall. Management has announced a new multi-year license agreement with HanesBrands to manufacture an outerwear collection for the Champion brand. The company will create quality heritage pieces to expand Champions' lifestyle offering. The product will be distributed via its diverse channels across North America and Champions' global network with first deliveries for fall of 2024.
With respect to the company’s brand progress, the key brands like DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Nautica and Halston are likely to perform well. Expanding the company’s owned brands, including DKNY, Karl Lagerfeld, Donna Karan and Vilebrequin, is a priority as these brands represent an important long-term profit. Also, these brands enable the company to further widen its global reach. In fiscal 2024, with the ownership of the whole Karl Lagerfeld brand, the company’s international sales will be up 20% versus the prior year. Management believes this business can expand to more than $3 billion in annual revenues over time.
What’s More?
G-III Apparel posted better-than-expected results in second-quarter fiscal 2024, wherein the top and the bottom line beat the Zacks Consensus Estimate and improved year over year. Gross profit jumped 20.9% year over year while the gross margin increased 410 basis points (bps). The wholesale segment’s gross margin was 40.6%, up 440 bps year over year.
The company’s results were driven by strength in outerwear and dressier categories including sportswear, dresses and suit separates across its brands DKNY, Karl Lagerfeld, Calvin Klein, Tommy Hilfiger and Levi's. Strength across denim, footwear and team sports also drove the results. Looking into the third quarter, the company’s order book seems good and inventory is aligned properly. The company is well positioned for the fall and holiday season.
For fiscal 2024, management projects net sales to be about $3.30 billion and net income to be $145-$150 million, or between $3.05 per share and $3.15 per share. This compares favorably to net sales of $3.23 billion and a net loss of $(133.1) million, or $(2.79) per share, for fiscal 2023. It expects continued gross margin improvement for the rest of the fiscal year, and projects ending the year with the gross margin being up nearly 450 bps year over year. The second half of fiscal 2024 gross margin will benefit from moderated freight costs.
Given all the aforesaid tailwinds, we believe G-III Apparel will continue to perform well on the bourses.
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Some other top-ranked companies are Royal Caribbean (RCL - Free Report) , lululemon athletica (LULU - Free Report) and Ralph Lauren (RL - 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 28.5%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 55.2% and 182.8%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 35.6% and 20.5%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 6.8%, on average.
Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 17.3%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.8% and 13.7%, respectively, from the year-ago corresponding figures.