We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
G-III Apparel (GIII) Down 9.3% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for G-III Apparel Group (GIII - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is G-III Apparel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
G-III Apparel Group posted mixed second-quarter fiscal 2023 results, wherein the top line beat the Zacks Consensus Estimate, while the bottom line missed the same. Further, revenues grew year over year, while earnings dipped. Quarterly results were hurt by inflationary pressures and higher costs in areas like warehousing, transportation and raw materials.
Q2 in Detail
G-III Apparel delivered earnings per share of 39 cents, lagging the Zacks Consensus Estimate of 47 cents. Also, the reported figure dipped 4.9% from the year-ago quarter’s reading.
Net sales jumped 25% from the last fiscal year’s quarterly figure to $605.2 million and came above the Zacks Consensus Estimate of $591 million. The top-line outperformance can be attributed to a healthy sales performance at the Wholesale and Retail divisions.
Gross profit increased 18.7% year over year to $228.9 million. However, gross margin of 37.8% contracted 210 basis points (bps) from the prior-year period’s reading, mainly due to inflationary increases in costs and elevated freight expenses, somewhat offset by higher prices.
SG&A expenses grew 30.1% year over year to $191 million. G-III Apparel reported an operating income of $31.3 million, down 19.5% from the year-ago fiscal quarter’s number.
Segmental Performance
Net sales at the Wholesale segment were $588 million, up 26% from the year-earlier quarter’s figure. However, the segment’s gross margin declined nearly 210 bps from the year-ago quarter’s level to 36.2%.
Net sales at the Retail segment totaled $31 million, up 14% from the prior-year fiscal quarter’s level. However, the segment’s gross margin fell 30 bps from the year-earlier fiscal quarter’s tally to 51.6%.
Financial Details
G-III Apparel ended the fiscal second quarter with cash and cash equivalents of $151 million and a total debt of $575.8 million. Total stockholders’ equity was $1,584 million. Inventories increased significantly to $1,040.8 million at the end of the reported fiscal quarter from $499.3 million at the end of the year-ago fiscal quarter.
Management also repurchased roughly 800,000 shares for $17 million. GIII had cash and availability under the credit agreement of above $730 million at the end of the reported fiscal quarter.
Outlook
Management updated guidance for fiscal 2023, which takes into account the anticipated impact from the ongoing inflationary pressures on consumers and higher costs related to supply- chain conditions, including the timing of receipts of goods.
For fiscal 2023, management now projects net sales of $3.15 billion and a net income of $182-$187 million or $3.69-$3.79 per share. Adjusted net income is anticipated in the bracket of $177-$182 million or $3.60-$3.70 per share. Earlier, management forecast net sales of $3.24 billion and a net income of $205-$215 million or $4.23-$4.33 per share. GIII recorded net sales of $2.77 billion and a net income of $200.6 million or $4.05 per share in the last fiscal year. GIII recorded an adjusted net income of $207.9 million or $4.20 per share in fiscal 2022.
Management predicts an adjusted EBITDA between $318 million and $323 million, indicating a decline from an adjusted EBITDA of $350.2 million reported in fiscal 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -16.29% due to these changes.
VGM Scores
At this time, G-III Apparel has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise G-III Apparel has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
G-III Apparel (GIII) Down 9.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for G-III Apparel Group (GIII - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is G-III Apparel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
G-III Apparel’s Q2 Earnings Miss, Sales Increase Y/Y
G-III Apparel Group posted mixed second-quarter fiscal 2023 results, wherein the top line beat the Zacks Consensus Estimate, while the bottom line missed the same. Further, revenues grew year over year, while earnings dipped. Quarterly results were hurt by inflationary pressures and higher costs in areas like warehousing, transportation and raw materials.
Q2 in Detail
G-III Apparel delivered earnings per share of 39 cents, lagging the Zacks Consensus Estimate of 47 cents. Also, the reported figure dipped 4.9% from the year-ago quarter’s reading.
Net sales jumped 25% from the last fiscal year’s quarterly figure to $605.2 million and came above the Zacks Consensus Estimate of $591 million. The top-line outperformance can be attributed to a healthy sales performance at the Wholesale and Retail divisions.
Gross profit increased 18.7% year over year to $228.9 million. However, gross margin of 37.8% contracted 210 basis points (bps) from the prior-year period’s reading, mainly due to inflationary increases in costs and elevated freight expenses, somewhat offset by higher prices.
SG&A expenses grew 30.1% year over year to $191 million. G-III Apparel reported an operating income of $31.3 million, down 19.5% from the year-ago fiscal quarter’s number.
Segmental Performance
Net sales at the Wholesale segment were $588 million, up 26% from the year-earlier quarter’s figure. However, the segment’s gross margin declined nearly 210 bps from the year-ago quarter’s level to 36.2%.
Net sales at the Retail segment totaled $31 million, up 14% from the prior-year fiscal quarter’s level. However, the segment’s gross margin fell 30 bps from the year-earlier fiscal quarter’s tally to 51.6%.
Financial Details
G-III Apparel ended the fiscal second quarter with cash and cash equivalents of $151 million and a total debt of $575.8 million. Total stockholders’ equity was $1,584 million. Inventories increased significantly to $1,040.8 million at the end of the reported fiscal quarter from $499.3 million at the end of the year-ago fiscal quarter.
Management also repurchased roughly 800,000 shares for $17 million. GIII had cash and availability under the credit agreement of above $730 million at the end of the reported fiscal quarter.
Outlook
Management updated guidance for fiscal 2023, which takes into account the anticipated impact from the ongoing inflationary pressures on consumers and higher costs related to supply- chain conditions, including the timing of receipts of goods.
For fiscal 2023, management now projects net sales of $3.15 billion and a net income of $182-$187 million or $3.69-$3.79 per share. Adjusted net income is anticipated in the bracket of $177-$182 million or $3.60-$3.70 per share. Earlier, management forecast net sales of $3.24 billion and a net income of $205-$215 million or $4.23-$4.33 per share. GIII recorded net sales of $2.77 billion and a net income of $200.6 million or $4.05 per share in the last fiscal year. GIII recorded an adjusted net income of $207.9 million or $4.20 per share in fiscal 2022.
Management predicts an adjusted EBITDA between $318 million and $323 million, indicating a decline from an adjusted EBITDA of $350.2 million reported in fiscal 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -16.29% due to these changes.
VGM Scores
At this time, G-III Apparel has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise G-III Apparel has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.