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G-III Apparel (GIII) Rides on Digital Arm and Brand Strength

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G-III Apparel Group, Ltd. GIII ranks among the recognized players in the Zacks Textile – Apparel industry, which is in the top 12% of all the Zacks Classified industries. Shares of this New York-based company have increased 23.3% on a year-to-date basis, outperforming the industry’s 11.1% growth.

This currently Zacks Rank #1 (Strong Buy) stock looks promising, thanks to its robust business strategies including digital progress and brand strength. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is optimistic about its portfolio of globally-recognized lifestyle brands including DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld. Management also undertakes strategies including acquisitions and licensing of well-known brands to expand product portfolio and bolster growth. Let’s delve deeper.

Robust Strategies

We note that G-III Apparel is firmly focused on growing its digital business with expansion in the distribution channel. The company’s own websites generated solid results for both DKNY and Karl Lagerfeld Paris with comparable sales growth of about 40% during the fourth quarter of fiscal 2021.

Its power brands are enriching the digital businesses of its retail partners wherein digital sales penetration is currently approaching 40%, up from about 25% seen last year. Management is on track to drive growth across the digital landscape via investments in internal talent, e-commerce sites, logistical solutions and loyalty program.

It is encouraged about growth in athleisure for Calvin Klein, Tommy Hilfiger, DKNY and Karl Lagerfeld Paris brands. The company’s casual offerings are driving the sportswear category. The footwear and handbag businesses showed consistent strength. Earlier, the Karl Lagerfeld Paris women's brand was launched across 75 new doors at Macy's M.

Although G-III Apparel’s retail business has been sluggish for a while now, management is striving hard to make the segment turn around. The company successfully completed the restructuring of this segment by permanently shutting the underperforming Wilsons Leather and G.H. Bass stores. It is believed that the new retail model is poised to achieve profitability in the near term. The company’s International business also continues to be impressive.

Conclusion

Given all the aforesaid tailwinds, we believe, G-III Apparel will continue to perform well and retain its solid momentum on the bourses.

The company is optimistic about its second-quarter fiscal 2022, for which net sales are anticipated to be $460 million. This projection indicates solid growth from $297 million delivered in the same quarter a year ago. Second-quarter earnings per share are envisioned in the bracket of 3-13 cents against a net loss of 31 cents recorded in the year-earlier quarter.

Don’t Miss These Solid Bets Too

Under Armour UAA has a long-term earnings growth rate of 32.2% and a Zacks Rank of 1, currently.

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