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Here's Why G-III Apparel (GIII) is Investors' Favorite Pick

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Shares of G-III Apparel Group, Ltd. (GIII - Free Report) have skyrocketed 115.4% over the past six months, thanks to its robust business strategies and strength in brands. Moreover, its digital business continued to exhibit strength. We note that management is focused on growing the digital business with expansion in the distribution channel. In addition, the company recently completed the restructuring of its retail segment, permanently shutting the Wilsons Leather and G.H. Bass stores. Encouragingly, the company’s new retail model has been positioned on a path to profitability.

The New York-based company’s shares have significantly outperformed the industry’s 29.2% rally and the S&P 500’s 20.3% gain in a six-month time frame. The stock has also outshone the broader Consumer Discretionary sector’s increase of 29.9% in the same time period. Moreover, a Momentum Score of A, with expected long-term earnings growth of 11.6% for this Zacks Rank #1 (Strong Buy) stock, speaks volumes. You can see the complete list of today’s Zacks #1 Rank stocks here.

Additionally, analysts are optimistic about this stock for the upcoming quarter and fiscal year. The Zacks Consensus Estimate for first-quarter fiscal 2022 earnings has moved to 12 cents from a loss of 5 cents over the past seven days. Also, the consensus mark for fiscal 2022 earnings has increased about 8.5% in the same time period.

Let’s Delve Deeper

Talking of G-III Apparel’s brand strength, management is optimistic about the company’s five global power brands– DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. G-III Apparel has been witnessing accelerating demand for athleisure products across its brands. The company’s casual offerings have also been driving the sportswear category. Also, the footwear and handbag businesses continued to remain strong. Recently, the company launched the Karl Lagerfeld Paris women's brand across 75 new doors at Macy's (M - Free Report) .

G-III Apparel undertakes several strategies, including acquisitions and licensing of well-known brands, to expand product portfolio. Moreover, the company’s Donna Karan International acquisition appears encouraging. Apart from these, it remains on track with the process of bolstering brands across channels, with new launches, improved marketing strategies and broader consumer reach.

Coming to digital business, the company’s own websites generated solid results for both DKNY and Karl Lagerfeld Paris, with comparable sales growth of about 40% in the fourth quarter of fiscal 2021. Also, the company’s power brands are adding up to the digital businesses of its retail partners, where digital sales penetration is currently approaching 40%, up from about 25% seen last year. Management is on track to drive growth across the digital landscape via investments in internal talent, re-platformed e-commerce sites and improved logistics capabilities.

Driven by such strengths, management issued upbeat sales view for the first quarter of fiscal 2022. For the quarter, the company projects net sales of roughly $460 million, which suggests an increase of 13.6% from $405.1 million in the year-ago quarter. Also, gross margins are likely to significantly improve year over year in the impending quarter.

All in all, G-III Apparel looks well poised for growth, given the aforementioned strategies and sound fundamentals.

Don’t Miss These Solid Bets Too

Gildan Activewear (GIL - Free Report) has a long-term earnings growth rate of 9% and currently sports a Zacks Rank #1.

Delta Apparel (DLA - Free Report) delivered a significant earnings surprise in the last-reported quarter. The company sports a Zacks Rank #1.

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