Here's Why G-III Apparel (GIII) is Rallying Ahead of Industry
Shares of G-III Apparel Group, Ltd. GIII have surged a whopping 81.2% in the past six months, thanks to its robust business strategies with digital expansion and brand strength. The company has been undertaking several strategies, including acquisitions and licensing of well-known brands, to expand its product portfolio.
Management remains optimistic about the company’s diversified portfolio of key brands, namely DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Levi’s, Nautica and Halston. Meanwhile, the industry increased 14.7% in the aforesaid period.
A Momentum Score of B further speaks volumes for this current Zacks Rank #1 (Strong Buy) company. Analysts seem optimistic about the company. The Zacks Consensus Estimate for fiscal 2024 earnings per share (EPS) is currently pegged at $3.79, showing an increase of 33% year over year. The consensus mark for fiscal 2025 sales and EPS is currently $3.27 billion and $3.84, respectively, reflecting corresponding increases of 3.7% and 1.5% year over year.
Let’s Delve Deeper
G-III Apparel’s strategic priorities include driving power brands across categories, enhancing its portfolio via 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.
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We note that the company has numerous growth opportunities including the repositioning and expansion of the Donna Karan label and a long-term license for the Nautica brand. Nautica is available in nearly 1300 freestanding stores and shops globally as well as boasts a sturdy digital presence in more than 30 countries. The company’s license for Nautica in North America, initially with jeans and later expanding to a wider range of additional categories, is set to launch in early 2024 to more than 200 doors. It aims to install 60 branded shop-in-shops.
For Donna Karan, it is leveraging the brand’s classic, contemporary and elevated feel and widening its appeal to a broader consumer base. The company will launch the brand in spring in more than 200 doors. It will build 150 branded shop-in-shops and new licenses to extend the brand's reach. 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.
Further, a master global license with the option to buy Halston is likely to launch in the fall of 2024. Halston is an American heritage brand with a legacy of glamorous designs across a range of price points. Management had also announced a 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 first deliveries available for the fall of 2024.
Management is focused on regulating the business and expanding its market share. It has been maximizing its omnichannel opportunities and leveraging data for a while. It has also been working to boost demand on its own and drive retail partners' digital platforms as well as expand its pure-play presence. Overall, the company’s strategic priorities include driving power brands across categories, enhancing its portfolio via ownership of brands and licensing opportunities, expanding global reach, maximizing omnichannel capabilities and scaling the private label business. In addition, International business is a key driver for the company.
Given all the aforesaid tailwinds, we believe G-III Apparel will continue to perform well on the bourses.
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