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G-III Apparel (GIII) Buoyant on Digital & Brand Progress

G-III Apparel Group, Ltd. GIII appears quite promising, thanks to its robust digital gains and strength in the global power brands. Management is focused on updating websites to offer a seamless customer experience. GIII also continuously strengthens its power brands through innovations and licensing agreements. The retailer is encouraged by its diversified portfolio, backed by DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris.

A glimpse of this New York-based player’s share price performance over the past three months shows that the stock has gained 7.2% against the industry’s 5.3% fall. A VGM Score of A for this currently Zacks Rank #1 (Strong Buy) stock further underpins its inherent strength. You can see the complete list of today’s Zacks #1 Rank stocks here.

Let’s delve deeper.

Discussing Strategies

G-III Apparel strives to become the best omni-channel organization and is focused on accelerating its digital presence. During fourth-quarter fiscal 2022, digital sales rose 35% on GIII’s partner sites and more than 60% on its in-house brand (DKNY and Karl Lagerfeld Paris) sites from the respective two-year ago levels. In China, digital sales exceeded store sales. Vilebrequin’s digital sales registered solid double-digit increases from the last-year readings.

Management is progressing well with the improvements in its digital platforms for DKNY and Karl Lagerfeld Paris. These sites are likely to offer immersive brand content to engage consumers, thus facilitating conversion and leveraging sales tools, such as virtual selling. It is steadily investing in data analytics capabilities to better know the consumers across channels and boost their shopping experiences.

Additionally, G-III Apparel is experiencing immense strength in its outerwear business, led by the casual products category. Its top categories, including athleisure and casual sportswear, are also performing well. The Jeans category has been a major contributor to the overall results for a while. Apart from growth in the casual businesses that are gaining from shifts in consumer behavior, the broader lifestyle categories like dresses and wear-to-work sportswear exhibit momentum.

With respect to athleisure and casual sportswear, GIII is consistently expanding its collections to cash in on consumers' growing demand. Comfort, performance and functionality are driving the athleisure business. Thus, it is well-positioned with the diversified product categories across its power brands, including DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris, to cater to growing demand.

Management is focused on expanding its international business as well. GIII-Apparel’s efforts to bolster brands across channels with launches improved its marketing strategies while a broader consumer reach will definitely keep yielding favorable results ahead.

What Else?

GIII’s strategic endeavors helped it post sturdy results for fourth-quarter fiscal 2022. G-III Apparel’s top and bottom lines beat the Zacks Consensus Estimate and improved year over year. Net sales jumped 42% year over year on healthy sales performances at the Wholesale and Retail divisions. A strong quarter prompted management to issue an upbeat outlook for fiscal 2023.

Management projects fiscal 2023 net sales to be $3 billion, up from $2.77 billion reported in fiscal 2022. G-III Apparel envisioned earnings per share of $4.20-$4.30, up from $4.05 earned last fiscal. GIII expects higher gross margins in fiscal 2023 than the fiscal 2022 level.

Encouragingly, the Zacks Consensus Estimate for GIII’s fiscal 2023 sales and earnings is currently pegged at $3.01 billion and $4.26 per share, respectively, suggesting increases of 8.7% and 5.2% each from the corresponding last-fiscal year figures.

All in all, G-III Apparel seems well positioned on the back of its solid brand strength coupled with robust digital efforts and other strategic moves.

Eye These Solid Picks Too

A few other top-ranked stocks in the Consumer Discretionary space are Oxford Industries OXM, Gildan Activewear GIL and Delta Apparel DLA.

Oxford Industries currently sports a Zacks Rank of 1. OXM has a trailing four-quarter earnings surprise of 112.8%, on average.

The Zacks Consensus Estimate for Oxford Industries’ current financial year’s sales and EPS suggests growth of 10.2% and 13%, respectively, from the corresponding year-ago reported numbers.

Gildan Activewear has a Zacks Rank #2 (Buy) at present. GIL has an expected long-term earnings growth rate of 8%.

The Zacks Consensus Estimate for Gildan Activewear’s 2022 sales and EPS suggests growth of 8.9% and 3.3%, respectively, from the corresponding year-ago reported figures. GIL has a trailing four-quarter earnings surprise of 66.6%, on average.

Delta Apparel currently has a Zacks Rank of 2. DLA has a trailing four-quarter earnings surprise of 21.3%, on average.

The Zacks Consensus Estimate for Delta Apparel's current financial-year sales suggests growth of 14.2% while the same for EPS indicates a rise of 20.1% from the respective year-ago reported figures.


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