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Bull of the Day: G-III Apparel (GIII)

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G-III Apparel Group (GIII - Free Report) is a leading manmanufacturer and distributor of apparel and accessories under licensed, owned, and private-label brands. Its extensive brand portfolio includes DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger, Vince Camuto, Guess?, Jessica Simpson, Cole Haan, Karl Lagerfeld, and many others.

Better-Than-Expected Q4 Results

Non-GAAP earnings of 55 cents blew past the Zacks Consensus Estimate of 44 cents per share. Revenues came in at $767 million, just missing our consensus estimate but growing 7% year-over-year.

And for the full year, sales grew 10% to $3.1 billion, while EPS hit $2.75 per diluted share, which is more than twice last year’s $1.25 per share profit. Fiscal 2019 ended up being a record year for G-III.

Morris Goldfarb, the company’s Chairman and CEO, pointed to G-III’s five “power brands” that drove its record profits: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger, and Karl Lagerfeld.

“This was also a transformative year for us as it was the first full year in which products for DKNY and Donna Karan were created and developed by us,” he continued. “In this ever-changing retail landscape, our consistent execution positions us to be a global provider of fashion product. With the current power brands we have today, we believe we can continue to achieve significant organic growth opportunities over the next several years.”

GIII is On the Rise

Year-to-date, shares of GIII are up 50% compared to the S&P 500’s gain of almost 16%.

Along with strong Q4 results, G-III provided strong guidance for fiscal 2020.

The company expects EPS between $3.18 and $3.28 per share, with revenues of $3.3 billion. And for the current quarter, G-III should report earnings of 13 cents to 23 cents per share on revenues of roughly $650 million.

Estimates, thus, have been rising lately too, pushing the stock towards a Zacks Rank #1 (Strong Buy).

For the current fiscal year, the company’s earnings are expected to grow about 15.4% year-over-year. Five analysts have revised their estimates upwards in the past 60 days, and the Zacks Consensus Estimate has moved sixteen cents higher from $3.14 to $3.30 during the same time frame (which sits above the company’s current guided range).

2021 looks pretty strong too, and earnings are expected to grow almost 11%; next year’s consensus estimate sits at $3.66 per share, with two upward revisions in the last 60 days.

If you’re an investor looking for an apparel stock to add to your portfolio, make sure to keep GIII on your shortlist.

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