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G-III Apparel Group, Ltd. GIII is expected to witness deterioration in the top and bottom lines when it reports third-quarter fiscal 2021 results on Dec 8. The Zacks Consensus Estimate for its fiscal third-quarter earnings is currently pegged at 94 cents, which suggests a decline of 52.8% from $1.99 recorded in the year-ago period. However, the current consensus estimate, which has been unchanged in the past 30 days, indicates an improvement from a loss of 31 cents reported in the preceding quarter.
Further, the consensus mark for quarterly revenues stands at $773.2 million, indicating a decrease of 31% from the year-ago quarter’s figure. We note that G-III Apparel’s top line plunged 53.8% in the fiscal second quarter.
On an encouraging note, the company delivered a trailing four-quarter earnings surprise of 14.5%, on average.
Key Factors to Note
We expect G-III Apparel’s quarterly performance to have benefitted from the demand in the athleisure wear category. Impressive growth in the ongoing DKNY and Karl Lagerfeld Paris stores, and digital sites coupled with strength in power brands, including Calvin Klein and Tommy Hilfiger, is expected to have been a tailwind. In fact, the company has been on track with the process of bolstering brands across channels. Its strategic endeavors, including the licensing of well-known brands to expand product portfolio, are also encouraging. The company has also been prudently managing inventory, and reducing marketing and capital expenditure.
Although G-III Apparel is on track with the restructuring of the retail unit, including closing down of underperforming outlets, its retail business has been dismal for a while. This has been hurting the company’s overall top-line performance. Further, the adverse impacts of COVID-19 cannot be ruled out. On its fiscal second-quarter earnings call, management had projected pandemic-related impacts to continue hurting results in the second half of fiscal 2021. It expected a year-over-year net sales decline of 28-33% for the aforementioned period.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for G-III Apparel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GIII Apparel Group, LTD. Price and EPS Surprise
GIII Apparel Group, LTD. price-eps-surprise | GIII Apparel Group, LTD. Quote
Although G-III Apparel has a Zacks Rank #2, its Earnings ESP of -2.28% is making surprise prediction difficult.
Stocks With Favorable Combinations
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.
CarMax KMX presently has an Earnings ESP of +0.99% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
lululemon athletica LULU currently has an Earnings ESP of +0.78% and a Zacks Rank #3.
Costco COST has an Earnings ESP of +0.84% and a Zacks Rank #3 at present.
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