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G-III Apparel Group, Ltd. (GIII - Free Report) posted sturdy first-quarter fiscal 2023 results. Both the top and the bottom line beat the Zacks Consensus Estimate and grew year over year. This marked the eighth straight earnings beat for GIII. Results gained from strength in GIII’s brands and digital business.
Over the past six months, shares of this presently Zacks Rank #2 (Buy) player have gained 0.9% against the industry’s 5.9% dip.
Q1 in Detail
G-III Apparel delivered earnings per share of 72 cents, beating the Zacks Consensus Estimate of 57 cents. Also, the reported figure rose 28.6% from the year-ago quarter’s reading.
GIII Apparel Group, LTD. Price, Consensus and EPS Surprise
Net sales jumped 32.5% year over year to $688.8 million and came above the Zacks Consensus Estimate of $601.4 million. The top-line outperformance can be attributed to a healthy sales performance at the Wholesale and Retail divisions. Digital sales of G-III Apparel’s product grew approximately 60% from the pre-pandemic levels. Direct-to-consumer sales grew in solid double digits from the pre-pandemic levels and wholesale almost doubled.
G-III Apparel’s retail partners have been witnessing sharp growth in sales of the power brands, namely DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. Management is focused on driving power brands across categories and expanding the portfolio through ownership of brands and licensing. Last month, GIII announced the acquisition of Karl Lagerfeld, marking an exciting milestone and executing a strategic priority. GIII has also been maximizing its omni-channel opportunities and leveraging data for a while.
Another component of GIII’s omni-channel is its own DKNY and Karl Lagerfeld Paris retail operations. G-III Apparel saw a rebound in traffic in spite of the persistent challenges in tourism. Some store sales increased 30% for DKNY and 50% for Karl Lagerfeld. In fiscal 2023, management intends to add seven Karl Lagerfeld Paris locations and shutter the same number of underperforming DKNY stores.
Vilebrequin also had a good quarter. G-III Apparel is expanding the brand’s presence by introducing nearly 10 company-owned and partner-operated stores in Europe and North America.
A Sneak Peek at Margins
Gross profit increased 25.8% year over year to $246 million. However, gross margin of 35.7% contracted 190 basis points (bps) from the prior-year period’s reading, mainly due to inflationary increases in costs, including higher freight expenses.
SG&A expenses grew 30.9% year over year to $185.4 million. G-III Apparel reported an operating income of $54.5 million, up 16.5% from the year-ago quarter’s number.
Segmental Performance
Net sales at the Wholesale segment were $681 million, up 33% from the year-earlier quarter’s figure. However, the segment’s gross margin declined nearly 220 bps from the year-ago quarter’s level to 34.1%.
Net sales at the Retail segment totaled $28 million, up 44% from the prior-year quarter’s level. However, the segment’s gross margin fell 30 bps from the year-earlier quarter to 50%.
Financial Details
G-III Apparel ended the fiscal first quarter with cash and cash equivalents of $438.4 million and s long-term debt of $521.4 million. Total stockholders’ equity was $1,558.3 million. Inventories increased 58.7% to $550.1 million at the end of the reported quarter.
GIII’s board raised its earlier authorized share repurchase program. There were 2.3 million shares remaining under its prior program, now increased to 10 million shares. Currently, 47.9 million shares are outstanding.
Outlook
Management raised guidance for fiscal 2023, which takes into account the anticipated impact from the ongoing supply-chain conditions. These factors include the present lockdowns in China, estimated higher shipping costs and delays in the receipt of goods. The outlook does not contemplate any reimposition of store closures or other restrictions and a significant worsening in global inflation rates or consumer sentiment.
We note that G-III Apparel has no direct operations in Russia or Ukraine. Therefore, exposure from sales in this region is likely to have an immaterial impact on fiscal 2023 results.
For fiscal 2023, G-III Apparel expects net sales of $3.24 billion and a net income of $205-$215 million or $4.23-$4.33 per share. This compares to net sales of $2.77 billion and a net income of $200.6 million or $4.05 per share, recorded last year. Adjusted net income for fiscal 2023 is projected between $213 million and $223 million or between $4.40 and $4.50 per share. Adjusted EBITDA for the full fiscal is forecast in the band of $360-$370 million, indicating growth from $350.2 million reported in fiscal 2022.
For the fiscal second quarter, GIII expects net sales of $600 million, higher than $483.1 million recorded in the same period last year. Net income for the quarter is envisioned in the range $20-$25 million or 42-52 cents per share. This indicates growth from the net income of $19.2 million or 39 cents per share in the year-ago period.
Eye These Solid Picks
Rocky Brands (RCKY - Free Report) , a key designer and marketer of premium quality footwear and apparel, currently sports a Zacks Rank #1 (Strong Buy). RCKY delivered an earnings surprise of 17% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Rocky Brands’ 2022 sales and EPS suggests growth of 23.1% and 22.8%, respectively, from the year-ago corresponding figures.
Delta Apparel (DLA - Free Report) is a manufacturer of activewear and lifestyle apparel products. DLA flaunts a Zacks Rank of 1 at present.
The Zacks Consensus Estimate for Delta Apparel’s current financial-year sales and EPS suggests growth of 14.6% and 45.8%, respectively, from the corresponding year-ago figures. DLA has a trailing four-quarter earnings surprise of 41.1%, on average.
Caleres (CAL - Free Report) , a footwear dealer, flaunts a Zacks Rank of 1 at present. CAL has a trailing four-quarter earnings surprise of 62.9%, on average.
The Zacks Consensus Estimate for Caleres’ current financial-year sales and EPS suggests growth of 5.2% and 1.8%, respectively, from the corresponding year-ago figures.
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G-III Apparel's (GIII) Q1 Earnings Beat, Sales Increase Y/Y
G-III Apparel Group, Ltd. (GIII - Free Report) posted sturdy first-quarter fiscal 2023 results. Both the top and the bottom line beat the Zacks Consensus Estimate and grew year over year. This marked the eighth straight earnings beat for GIII. Results gained from strength in GIII’s brands and digital business.
Over the past six months, shares of this presently Zacks Rank #2 (Buy) player have gained 0.9% against the industry’s 5.9% dip.
Q1 in Detail
G-III Apparel delivered earnings per share of 72 cents, beating the Zacks Consensus Estimate of 57 cents. Also, the reported figure rose 28.6% from the year-ago quarter’s reading.
GIII Apparel Group, LTD. Price, Consensus and EPS Surprise
GIII Apparel Group, LTD. price-consensus-eps-surprise-chart | GIII Apparel Group, LTD. Quote
Net sales jumped 32.5% year over year to $688.8 million and came above the Zacks Consensus Estimate of $601.4 million. The top-line outperformance can be attributed to a healthy sales performance at the Wholesale and Retail divisions. Digital sales of G-III Apparel’s product grew approximately 60% from the pre-pandemic levels. Direct-to-consumer sales grew in solid double digits from the pre-pandemic levels and wholesale almost doubled.
G-III Apparel’s retail partners have been witnessing sharp growth in sales of the power brands, namely DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. Management is focused on driving power brands across categories and expanding the portfolio through ownership of brands and licensing. Last month, GIII announced the acquisition of Karl Lagerfeld, marking an exciting milestone and executing a strategic priority. GIII has also been maximizing its omni-channel opportunities and leveraging data for a while.
Another component of GIII’s omni-channel is its own DKNY and Karl Lagerfeld Paris retail operations. G-III Apparel saw a rebound in traffic in spite of the persistent challenges in tourism. Some store sales increased 30% for DKNY and 50% for Karl Lagerfeld. In fiscal 2023, management intends to add seven Karl Lagerfeld Paris locations and shutter the same number of underperforming DKNY stores.
Vilebrequin also had a good quarter. G-III Apparel is expanding the brand’s presence by introducing nearly 10 company-owned and partner-operated stores in Europe and North America.
A Sneak Peek at Margins
Gross profit increased 25.8% year over year to $246 million. However, gross margin of 35.7% contracted 190 basis points (bps) from the prior-year period’s reading, mainly due to inflationary increases in costs, including higher freight expenses.
SG&A expenses grew 30.9% year over year to $185.4 million. G-III Apparel reported an operating income of $54.5 million, up 16.5% from the year-ago quarter’s number.
Segmental Performance
Net sales at the Wholesale segment were $681 million, up 33% from the year-earlier quarter’s figure. However, the segment’s gross margin declined nearly 220 bps from the year-ago quarter’s level to 34.1%.
Net sales at the Retail segment totaled $28 million, up 44% from the prior-year quarter’s level. However, the segment’s gross margin fell 30 bps from the year-earlier quarter to 50%.
Financial Details
G-III Apparel ended the fiscal first quarter with cash and cash equivalents of $438.4 million and s long-term debt of $521.4 million. Total stockholders’ equity was $1,558.3 million. Inventories increased 58.7% to $550.1 million at the end of the reported quarter.
GIII’s board raised its earlier authorized share repurchase program. There were 2.3 million shares remaining under its prior program, now increased to 10 million shares. Currently, 47.9 million shares are outstanding.
Outlook
Management raised guidance for fiscal 2023, which takes into account the anticipated impact from the ongoing supply-chain conditions. These factors include the present lockdowns in China, estimated higher shipping costs and delays in the receipt of goods. The outlook does not contemplate any reimposition of store closures or other restrictions and a significant worsening in global inflation rates or consumer sentiment.
We note that G-III Apparel has no direct operations in Russia or Ukraine. Therefore, exposure from sales in this region is likely to have an immaterial impact on fiscal 2023 results.
For fiscal 2023, G-III Apparel expects net sales of $3.24 billion and a net income of $205-$215 million or $4.23-$4.33 per share. This compares to net sales of $2.77 billion and a net income of $200.6 million or $4.05 per share, recorded last year. Adjusted net income for fiscal 2023 is projected between $213 million and $223 million or between $4.40 and $4.50 per share. Adjusted EBITDA for the full fiscal is forecast in the band of $360-$370 million, indicating growth from $350.2 million reported in fiscal 2022.
For the fiscal second quarter, GIII expects net sales of $600 million, higher than $483.1 million recorded in the same period last year. Net income for the quarter is envisioned in the range $20-$25 million or 42-52 cents per share. This indicates growth from the net income of $19.2 million or 39 cents per share in the year-ago period.
Eye These Solid Picks
Rocky Brands (RCKY - Free Report) , a key designer and marketer of premium quality footwear and apparel, currently sports a Zacks Rank #1 (Strong Buy). RCKY delivered an earnings surprise of 17% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Rocky Brands’ 2022 sales and EPS suggests growth of 23.1% and 22.8%, respectively, from the year-ago corresponding figures.
Delta Apparel (DLA - Free Report) is a manufacturer of activewear and lifestyle apparel products. DLA flaunts a Zacks Rank of 1 at present.
The Zacks Consensus Estimate for Delta Apparel’s current financial-year sales and EPS suggests growth of 14.6% and 45.8%, respectively, from the corresponding year-ago figures. DLA has a trailing four-quarter earnings surprise of 41.1%, on average.
Caleres (CAL - Free Report) , a footwear dealer, flaunts a Zacks Rank of 1 at present. CAL has a trailing four-quarter earnings surprise of 62.9%, on average.
The Zacks Consensus Estimate for Caleres’ current financial-year sales and EPS suggests growth of 5.2% and 1.8%, respectively, from the corresponding year-ago figures.