G-III Apparel Group, Ltd. (GIII - Free Report) is likely to witness deterioration in the top and bottom lines when it reports second-quarter fiscal 2021 results on Sep 9. The Zacks Consensus Estimate for the second quarter is currently pegged at a loss of 76 cents per share. The company reported earnings of 23 cents per share in the year-ago period. The consensus mark got wider by 3 cents over the past 30 days. Further, the consensus mark for revenues stands at $340.4 million, indicating a decline of 47% from the year-ago quarter reported figure.
We note that the company delivered an earnings surprise of 0.8% in the last four quarters, on average.
Key Factors to Note
We expect G-III Apparel’s performance to have been hurt by the closure of retail stores at some point of time during the quarter under review. Moreover, the company’s retail business has been sluggish for a while. Nonetheless, the company remains on track with its restructuring of the retail unit, which is believed to cut losses from underperforming locations and make the division profitable. This restructuring includes shutting down of 110 Wilsons Leather and 89 G.H. Bass outlets. Management had anticipated incurring a total charge of nearly $100 million in relation to the restructuring, majority of which was about to be made in the fiscal second quarter. Further, the adverse impacts of COVID-19, which had profound impacts in the previous quarter, might have also deterred performance in the to-be-reported quarter.
On the flip side, GIII-Apparel remains on track with the process of bolstering brands across channels and improved marketing strategies. Its strategic endeavors, including licensing of well-known brands to expand product portfolio appear encouraging. In addition, management remains optimistic about the company’s five global power brands – DKNY, Donna Karen, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld. Moreover, the company has been dedicating resources to drive sales at its partners' online sites as well as making strategic investments in its online business. It has also been prudently managing inventory, and reducing marketing and capital expenditures amid the crisis.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for G-III Apparel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GIII Apparel Group, LTD. Price and EPS Surprise
G-III Apparel has an Earnings ESP of +19.91% and a Zacks Rank #4 (Sell).
Stocks With the Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.
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Costco (COST - Free Report) has an Earnings ESP of +2.61% and a Zacks Rank #3.
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