Big retail companies have been closing stores, and cutting expenditures to stem their losses as they watch their revenues decline due to shifting customer buying behavior. As has been the issue for quite some time, customers continue to shun the traditional brick and mortar store in favor of ecommerce. These revenue issues are only compounded when their most recent acquisition isn’t expected to show any profits until the second half of 2017 at its earliest. These are some of the issues facing our Zacks Bear of the Day, G-III Apparel Group (GIII - Free Report) .
This Zacks Ranked #5 (Strong Sell) designs, manufactures, imports & markets an extensive range of leather & non-leather apparel including coats, jackets, pants, skirts & other sportswear items.
Recent Earnings Report Data
Last week, GIII reported Q4 17 results, where they posted their third consecutive quarter of missing both the Zacks consensus earnings and revenue estimates. On a year over year basis, the company saw declines in GAAP net income -54.6%, and non-GAAP net income per diluted share -41.8%. Further, the Donna Karan International (DKI) acquisition (completed on December 1, 2016) resulted in an operating loss of $9.2 million, and interest expenses of $7.5 million for FY 17. These losses from DKI had a -$0.21 dilutive impact on EPS. Further management announced FY 18 guidance where they expect the DKI acquisition to have a -$0.85 dilutive impact on EPS. Further, management currently expects the DKI acquisition to not become profitable till Q3 18.
Management’s Take
According to Morris Goldfarb, Chairman and Chief Executive Officer, “Fiscal 2017 was another important year for our Company. We completed the acquisition of Donna Karan which made us the owner of two of the world’s most iconic and recognizable power brands in Donna Karan and DKNY. This acquisition further bolsters our value proposition and strengthens our position as an all-season diversified apparel company with a broad portfolio of brands offered in multiple channels of retail distribution. Our non-outerwear wholesale business performed well in the face of significant headwinds as the traditional retail environment has become increasingly disrupted as a result of evolving consumer buying behavior and continued penetration of e-commerce. We expect to initiate a number of new product launches in the coming year as we seek to offer superior value in the marketplace.”
Mr. Goldfarb continued, “While our near-term financial outlook reflects the dilutive impact of our recent acquisition of Donna Karan, we believe the mid-year re-launch of the DKNY and Donna Karan brands will have a positive impact in the second half of the year. We are confident that we have one of the most desirable portfolios of brands in the industry and that DKNY and Donna Karan will quickly take their place alongside Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld as the cornerstone brands for the growth of our business.”
Price and Earnings Consensus Graph
As you can see below, GIII’s stock price and future earnings estimates have been declining since the middle of 2015.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Big retail companies have been closing stores, and cutting expenditures to stem their losses as they watch their revenues decline due to shifting customer buying behavior. As has been the issue for quite some time, customers continue to shun the traditional brick and mortar store in favor of ecommerce. These revenue issues are only compounded when their most recent acquisition isn’t expected to show any profits until the second half of 2017 at its earliest. These are some of the issues facing our Zacks Bear of the Day, G-III Apparel Group (GIII - Free Report) .
This Zacks Ranked #5 (Strong Sell) designs, manufactures, imports & markets an extensive range of leather & non-leather apparel including coats, jackets, pants, skirts & other sportswear items.
Recent Earnings Report Data
Last week, GIII reported Q4 17 results, where they posted their third consecutive quarter of missing both the Zacks consensus earnings and revenue estimates. On a year over year basis, the company saw declines in GAAP net income -54.6%, and non-GAAP net income per diluted share -41.8%. Further, the Donna Karan International (DKI) acquisition (completed on December 1, 2016) resulted in an operating loss of $9.2 million, and interest expenses of $7.5 million for FY 17. These losses from DKI had a -$0.21 dilutive impact on EPS. Further management announced FY 18 guidance where they expect the DKI acquisition to have a -$0.85 dilutive impact on EPS. Further, management currently expects the DKI acquisition to not become profitable till Q3 18.
Management’s Take
According to Morris Goldfarb, Chairman and Chief Executive Officer, “Fiscal 2017 was another important year for our Company. We completed the acquisition of Donna Karan which made us the owner of two of the world’s most iconic and recognizable power brands in Donna Karan and DKNY. This acquisition further bolsters our value proposition and strengthens our position as an all-season diversified apparel company with a broad portfolio of brands offered in multiple channels of retail distribution. Our non-outerwear wholesale business performed well in the face of significant headwinds as the traditional retail environment has become increasingly disrupted as a result of evolving consumer buying behavior and continued penetration of e-commerce. We expect to initiate a number of new product launches in the coming year as we seek to offer superior value in the marketplace.”
Mr. Goldfarb continued, “While our near-term financial outlook reflects the dilutive impact of our recent acquisition of Donna Karan, we believe the mid-year re-launch of the DKNY and Donna Karan brands will have a positive impact in the second half of the year. We are confident that we have one of the most desirable portfolios of brands in the industry and that DKNY and Donna Karan will quickly take their place alongside Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld as the cornerstone brands for the growth of our business.”
Price and Earnings Consensus Graph
As you can see below, GIII’s stock price and future earnings estimates have been declining since the middle of 2015.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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