Shares of G-III Apparel Group, Ltd. (GIII - Free Report) nosedived nearly 21% after the company reported dismal quarterly numbers for the second quarter of fiscal 2017. Following the weak results, the company also trimmed its fiscal 2017 outlook.
The company’s adjusted earnings of 1 cent per share fell way below the Zacks Consensus Estimate of 17 cents. Moreover, the bottom line also declined sharply from the year-ago figure of 27 cents.
The company reported net sales of $442.3 million, down 6.7% year over year. The top line also fell short of the Zacks Consensus Estimate of $485 million. Notably, this is the fourth consecutive quarter in which the company’s revenues have missed estimates.
Gross profit for the reported quarter decreased 7.5% to $155.6 million, while gross margin contracted 30 basis points (bps) to 35.2%. The company reported operating loss of $5.2 million. In the year-ago quarter, the company had reported operating income of $20.9 million.
Balance Sheet
G-III Apparel ended the quarter with a cash balance of $45 million and stockholders’ equity of approximately $900.1 million. The company had no outstanding debt at the end of the reported quarter. Capital expenditures for the quarter came in at $13 million.
Guidance
Management trimmed its fiscal 2017 guidance. The company expects earnings per share in the range of $2.16–$2.26, down from the earlier estimate of $2.55–$2.65. The company reduced its net sales guidance to $2.48 billion from $2.56 billion for fiscal 2017. The company expects adjusted EBITDA to decrease in the range of 2% to 5% in fiscal 2017 or approximately between $199 million and $206 million. Earlier, the company had expected adjusted EBITDA between $228 million and $236 million.
For the fiscal third quarter, the company expects net sales of nearly $940 million compared with $910 million in the prior-year quarter. Earnings per share are expected between $1.50 and $1.60 compared with $1.87 reported in the year-ago period
The Zacks Consensus Estimate for the fiscal third quarter and fiscal 2017 is currently pegged at $2.00 and $2.57 per share, respectively, and could witness a downward revision.
Zacks Rank & Stock to Consider
G-III Apparel currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the sector include Delta Apparel Inc. (DLA - Free Report) , PVH Corp. (PVH - Free Report) and Ralph Lauren Corporation (RL - Free Report) . All these stock hold a Zacks Rank #2 (Buy).
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Shares of G-III Apparel Group, Ltd. (GIII - Free Report) nosedived nearly 21% after the company reported dismal quarterly numbers for the second quarter of fiscal 2017. Following the weak results, the company also trimmed its fiscal 2017 outlook.
The company’s adjusted earnings of 1 cent per share fell way below the Zacks Consensus Estimate of 17 cents. Moreover, the bottom line also declined sharply from the year-ago figure of 27 cents.
The company reported net sales of $442.3 million, down 6.7% year over year. The top line also fell short of the Zacks Consensus Estimate of $485 million. Notably, this is the fourth consecutive quarter in which the company’s revenues have missed estimates.
Gross profit for the reported quarter decreased 7.5% to $155.6 million, while gross margin contracted 30 basis points (bps) to 35.2%. The company reported operating loss of $5.2 million. In the year-ago quarter, the company had reported operating income of $20.9 million.
Balance Sheet
G-III Apparel ended the quarter with a cash balance of $45 million and stockholders’ equity of approximately $900.1 million. The company had no outstanding debt at the end of the reported quarter. Capital expenditures for the quarter came in at $13 million.
Guidance
Management trimmed its fiscal 2017 guidance. The company expects earnings per share in the range of $2.16–$2.26, down from the earlier estimate of $2.55–$2.65. The company reduced its net sales guidance to $2.48 billion from $2.56 billion for fiscal 2017. The company expects adjusted EBITDA to decrease in the range of 2% to 5% in fiscal 2017 or approximately between $199 million and $206 million. Earlier, the company had expected adjusted EBITDA between $228 million and $236 million.
For the fiscal third quarter, the company expects net sales of nearly $940 million compared with $910 million in the prior-year quarter. Earnings per share are expected between $1.50 and $1.60 compared with $1.87 reported in the year-ago period
The Zacks Consensus Estimate for the fiscal third quarter and fiscal 2017 is currently pegged at $2.00 and $2.57 per share, respectively, and could witness a downward revision.
Zacks Rank & Stock to Consider
G-III Apparel currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the sector include Delta Apparel Inc. (DLA - Free Report) , PVH Corp. (PVH - Free Report) and Ralph Lauren Corporation (RL - Free Report) . All these stock hold a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
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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