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G-III Apparel (GIII) Q4 Earnings Likely to Rise: Here's Why

Zacks Equity Research

G-III Apparel Group, Ltd. GIII is scheduled to report fourth-quarter fiscal 2019 results on Mar 21, before market open. The company’s bottom line has outperformed the Zacks Consensus Estimate in each of the trailing four quarters by a wide margin. Let’s see what awaits this quarterly release.

How are Estimates Faring?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 44 cents, reflecting an increase of about 69% from the year-ago quarter. We note that the consensus mark has remained stable over the past 30 days. Moreover, G-III Apparel’s earnings surprise history has been encouraging. If all goes well, this will be the company’s eighth consecutive quarter of earnings beat. For revenues, the consensus mark stands at $768.2 million, reflecting a rise of 7.5% from the year-ago quarter’s figure.

For fiscal 2019, the Zacks Consensus Estimate for earnings is pegged at $2.76, reflecting an increase of 72.5% year over year. For revenues, the consensus estimate stands at $3.08 billion.

G-III Apparel Group, LTD. Price, Consensus and EPS Surprise

G-III Apparel Group, LTD. Price, Consensus and EPS Surprise | G-III Apparel Group, LTD. Quote

Let’s delve deeper and find out the factors driving the results.

Factors That Hold Key to G-III Apparel’s Performance

G-III Apparel is gaining from robust wholesale business as well as strength in DKNY stores. The company’s sturdy wholesale business coupled with increased same-store sales at DKNY brands aided top-line growth in the fiscal third quarter. Encouragingly, management expects wholesale business to continue growing in the upcoming periods.

Apart from this, the company has undertaken several strategies including acquisitions and licensing of well-known brands to expand product portfolio and make itself a diversified apparel and accessories company.

Furthermore, acquisitions and licensing agreements over the years have led to the emergence of the company’s five global power brands — DKNY, Donna Karen, Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld — that are poised to deliver solid long-term growth. The company expects its wholesale outerwear businesses to perform well in the upcoming quarters and remain well placed to exploit opportunities therein. G-III Apparel is also set to bring in new products and strengthen its ties with retailers besides rationalizing its store base in a bid to improve retail business.

With new launches, improved marketing strategies and consumer reach, GIII-Apparel remains on track with the process of bolstering brands across channels. It also plans to make efficient utilization of digital and social media platforms. These factors make us hopeful about its upcoming results.

For fiscal 2019, management provided an encouraging view. Net sales are expected to be $3.08 billion compared with $2.08 billion registered a year ago. Also, the bottom line is anticipated to be in the range of $2.67-$2.77 per share compared with the year-ago adjusted earnings of $1.60.

What Does the Zacks Model Say?

Our proven model shows that G-III Apparel is likely to beat estimates in fourth-quarter fiscal 2019. This is because a stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

G-III Apparel has a Zacks Rank #3 and an Earnings ESP of +0.92%, making us reasonably confident about an earnings beat.

Stocks With Favorable Combination

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post earnings beat.

Darden Restaurants, Inc. DRI has an Earnings ESP of +1.07% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ollie's Bargain Outlet Holdings, Inc. OLLI has an Earnings ESP of +1.34% and a Zacks Rank #2.

PVH Corp. PVH has an Earnings ESP of +1.14% and a Zacks Rank #3.

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