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G-III Apparel (GIII) Looks Good on Digital & Brand Strength

·4 min read

G-III Apparel Group, Ltd. GIII seems well poised for growth, buoyed by its robust digital initiatives and strength in the global power brands. Management is focused on updating websites to offer a seamless customer experience and also continuously strengthens GIII’s global power brands through innovations and licensing agreements. GIII has a diversified portfolio of brands, including DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris.

This apparel and accessories designer’s shares have increased 2.1% in the past month against its industry’s 4.8% decline. A VGM Score of B for this presently Zacks Rank #3 (Hold) stock further speaks volumes for its creditworthiness.

For fiscal 2023, the Zacks Consensus Estimate for G-III Apparel’s sales is currently pegged at $3.14 billion, suggesting growth of 13.6% from the year-ago fiscal period’s corresponding figure. For the fiscal third quarter, the consensus estimate stands at $1.07 billion, indicating an increase of 5.3% from the prior-year fiscal quarter’s reported figure. Management projects net sales of $3.15 billion for fiscal 2023 and $1.07 billion for the fiscal third quarter.

Delving Deeper

Management has been maximizing G-III Apparel’s omni-channel opportunities and leveraging data for a while. GIII is working consistently to boost demand on its own, drive its retail partners' digital platforms and expand its pure play presence. GIII’s new DKNY and Karl Lagerfeld websites have better technical operations to allow seamless navigation and provide immersive brand content. Karl Lagerfeld Europe has a robust digital business. Vilebrequin has also been performing impressively to date.

In addition to reinforcing its global power brands, G-III Apparel looks to strengthen its Europebased brand portfolio. In the second quarter of fiscal 2023, management concluded its earlier-announced acquisition of the remaining 81% of the Karl Lagerfeld brand, thus enhancing its global reach.

In the fiscal second quarter, GIII recorded significant year-over-year sales increases for its power brands, namely DKNY, Donna Karan, Karl Lagerfeld, Calvin Klein and Tommy Hilfiger. Sales for Calvin Klein and Tommy Hilfiger grew 14% and 5%, respectively, year over year in the reported quarter. G-III Apparel registered growth at almost all the categories, with strength in dresses and career wear and robust growth in handbags. DKNY and Donna Karan have sturdy iconic fragrance businesses through global licenses. Management notified that Inter Parfums is well-poised to enhance the fragrance business for the aforesaid two brands.

In 2016, G-III Apparel launched the Karl Lagerfeld Paris brand, introducing it to North America. For the current fiscal year, management anticipates growing net sales to be above $200 million. Additionally, GIII is on track to bolster brands across channels, with launches, improved marketing strategies and a broader consumer reach.

Bottom Line

Despite the aforesaid tailwinds, G-III Apparel is not immune to the impacts of the inflationary pressures on consumers and higher costs related to supply-chain conditions, including the timing of receipts of goods. Nonetheless, GIII’s sturdy brand strength and digital efforts will help it steer clear of these headwinds.

Eye These Solid Picks

Here we highlighted three better-ranked stocks, namely Designer Brands DBI, Delta Apparel DLA and Caleres CAL.

Designer Brands designs, manufactures and retails footwear and accessories. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and earnings per share (EPS) suggests growth of 6.9% and 23.5%, respectively, from the corresponding year-ago reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.

Delta Apparel is a manufacturer of activewear and lifestyle apparel products. DLA flaunts a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for Delta Apparel’s current financial-year sales and EPS suggests growth of 12.6% and 27.4%, respectively, from the year-ago corresponding figures. DLA has a trailing four-quarter earnings surprise of 34.2%, on average.

Caleres, a footwear dealer, has a Zacks Rank of 2 at present. CAL has a trailing four-quarter earnings surprise of 34.9%, on average.

The Zacks Consensus Estimate for Caleres’ current financial-year sales and EPS suggests growth of 5.6% and 0.9%, respectively, from the year-ago corresponding figures.


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GIII Apparel Group, LTD. (GIII) : Free Stock Analysis Report
 
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