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On Dec 6, Zacks Investment Research upgraded G-III Apparel Group, Ltd. (GIII - Snapshot Report) to a Zacks Rank #1 (Strong Buy). Shares of this textile-apparel retailer rose over twofold year to date.

Why the Upgrade?

G-III Apparel has been witnessing rising earnings estimates based on better-than-expected third-quarter fiscal 2014 results and an upbeat guidance for fiscal 2014. Moreover, the company has delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 96.6%. The long-term expected earnings growth rate for this stock is 16.5%.    

G-III Apparel reported third-quarter results on Dec 5. Adjusted quarterly earnings came in at $2.88, which were 10.3% higher than the Zacks Consensus Estimate of $2.61 and up 18.5% year over year. Total revenue climbed 23.0% year over year to $668.7 million and handily beat the Zacks Consensus Estimate of $621.0 million.

Impressive results were driven by robust performance of specialty retail operations and the wholesale business. Going forward, the company expects acquisition of G.H. Bass & Co. to further boost specialty retail operations. Moreover, gross profit for the quarter was $227.3 million, up 19.5% year over year and operating income was $98.7 million, up 21.7% from the prior-year quarter.

Based on robust results and expected synergies from the acquisition of G.H. Bass & Co, G-III Apparel raised its full-year 2014 guidance.  The company now anticipates sales to be about $1.73 billion, as against the earlier projection of $1.61 billion.

Further, net income is expected to be $72–$74 million or $3.47–$3.57 per share compared to the prior range of $68.6–$70.6 million or $3.30–$3.40 per share. On the other hand, adjusted earnings per share are expected to be $3.50 to $3.60 for fiscal 2014.

The Zacks Consensus Estimate for fiscal 2014 increased 8.5% to $3.59 per share over the last 7 days, while for fiscal 2015, it jumped by 5.5% to $4.24 per share over the same time frame.
Other Stocks to Consider

Some better-ranked retail stocks that look promising include Hanesbrands Inc. (HBI - Analyst Report), Michael Kors Holdings Limited (KORS - Analyst Report) and Columbia Sportswear Company (COLM - Snapshot Report). While Hanesbrands has a Zacks Rank #1 (Strong Buy), Michael Kors and Columbia Sportswear carry a Zacks Rank #2 (Buy).

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