G-III Apparel (GIII) is Marching Ahead of Industry: Here's Why
G-III Apparel Group, Ltd. GIII has been doing well, thanks to its robust strategies, including digital expansion and brand strength, and sound fundamentals. The company has been undertaking several strategies, including acquisitions and the licensing of well-known brands, to expand its product portfolio. Management is optimistic about the company’s diversified portfolio of key brands, namely DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Nautica and Halston.
The company’s strategic priorities include driving power brands across categories, enhancing its portfolio via the 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.
We note that the company has numerous growth opportunities, which include the repositioning and expansion of the Donna Karan label and a long-term license for the Nautica brand. 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 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. The 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 offerings. The product will be distributed via its diverse channels across North America and Champions' global network with the first deliveries in the fall of 2024.
What Else?
Buoyed by such endeavors, shares of this Zacks Rank #1 (Strong Buy) company have jumped 52.8% over the past year. Meanwhile, the industry has rallied 1.5% in the same time frame.
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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 $3.27, respectively. These estimates show corresponding increases of 2.4% and 14.7% year over year. The consensus mark for fiscal 2025 sales and EPS currently stands at $3.37 billion and $3.41, respectively, reflecting corresponding increases of 1.9% and 4.5% year over year.
Given all the aforesaid tailwinds, we believe G-III Apparel will continue to perform well on the bourses. A VGM Score of B further speaks volumes for the company.
Eye These Other Solid Picks
Some other top-ranked companies are Royal Caribbean RCL, lululemon athletica LULU and Ralph Lauren RL.
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 55.3% and 181.9%, 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 35.7% 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 2.7% and 13.4%, respectively, from the year-ago corresponding figures.
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