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G-III Apparel (GIII) Up 1.3% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for G-III Apparel Group (GIII - Free Report) . Shares have added about 1.3% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is G-III Apparel due for a pullback? 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 drivers.
G-III Apparel reported second-quarter fiscal 2027 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. Adjusted earnings increased year over year, while net sales declined.
The company’s go-forward portfolio delivered high-single-digit sales growth, underscoring momentum in its business as G-III transitions away from the Calvin Klein and Tommy Hilfiger licenses. Price increases and a continued shift toward higher-margin owned brands supported substantial gross-margin expansion.
Management raised its fiscal 2027 GAAP and adjusted earnings guidance, while maintaining its sales forecast and lowering its adjusted EBITDA outlook. G-III completed the Marc Jacobs acquisition, further advancing its strategic transformation. Management is targeting $1 billion in long-term annual revenues for Marc Jacobs and expects the addition to strengthen the company’s portfolio and global fashion positioning.
More on GIII's Q2 Results
G-III reported adjusted earnings of 26 cents per share, beating the Zacks Consensus Estimate of 25 cents. The bottom line also increased 4% from adjusted earnings of 25 cents per share in the year-ago quarter and exceeded the upper end of management’s prior guidance of 15-25 cents.
Net sales declined 9.6% year over year to $554.1 million and missed the Zacks Consensus Estimate of $570 million. Sales came in below management’s prior projection of $570 million. Growth in the go-forward portfolio provided support as the company continued its portfolio transition.
Adjusted net income totaled $11.5 million compared with $11.2 million in the prior-year quarter. Net income increased to $20.2 million or 46 cents per share, from $10.9 million or 25 cents per share, a year earlier.
The adjusted results exclude tariff-refund benefits and related interest income, Marc Jacobs acquisition expenses and a tax benefit from the release of a valuation allowance. The valuation-allowance release contributed a $9.3-million tax benefit to GAAP results in the quarter.
Insight Into G-III's Margins & Expenses
Gross profit was nearly flat year over year at $250.4 million. The gross margin expanded 440 basis points to 45.2% from 40.8%, driven by price increases and a greater mix of higher-margin owned brands. The adjusted gross margin stood at 45.2%.
Selling, general and administrative expenses increased 2% year over year to $231.4 million from $226.8 million. As a percentage of net sales, these expenses rose to 41.8% from 37%, reflecting expense deleverage on the lower revenue base.
Operating profit declined to $10.8 million from $16.3 million in the year-ago quarter. Adjusted EBITDA decreased 13.1% to $20.2 million from $23.3 million, despite the improvement in gross margin.
G-III ended the quarter with cash and cash equivalents of $529.2 million compared with $301.8 million in the prior-year period. Inventories declined 13% year over year to $555 million from $639.8 million.
Total debt stood at $7.8 million compared with $15.5 million a year earlier, while stockholders’ equity increased to $1.82 billion from $1.71 billion. Cash less total debt amounted to approximately $521.4 million as of July 31, 2026.
The company returned $12.2 million to shareholders during the quarter, comprising $7.9 million in share repurchases and $4.3 million in dividend payments.
GIII’s Q3 FY’27 Outlook
For the third quarter of fiscal 2027, G-III expects net sales of approximately $870 million compared with $988.6 million in the prior-year quarter. Net income and adjusted net income are each projected between $59 million and $64 million or $1.35-$1.45 per share. These figures compare with net income of $80.6 million, or $1.84 per share and adjusted net income of $83.4 million, or $1.90 per share, in the year-ago period.
G-III’s FY’27 Guidance
For fiscal 2027, G-III expects net sales of approximately $2.71 billion, down from $2.96 billion in fiscal 2026, reflecting approximately $460 million in lost Calvin Klein and Tommy Hilfiger sales. However, net income is now expected at $181-$185 million, or $4.10-$4.20 per share, above prior guidance of $171-$175 million, or $3.85-$3.95 per share.
However, management lowered its fiscal 2027 adjusted EBITDA outlook to $174-$178 million from $178-$182 million, compared with $192.4 million in fiscal 2026. However, adjusted net income is now projected at $97-$101 million, or $2.20-$2.30 per share, up from prior guidance of $95-$99 million, or $2.15-$2.25 per share.
The fiscal 2027 outlook excludes any impact related to Marc Jacobs, with more specific guidance expected when G-III reports third-quarter earnings. Management expects the acquisition to be slightly dilutive in fiscal 2027 and dilutive during the first 12 months after closing, with accretion expected thereafter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -16.72% due to these changes.
VGM Scores
Currently, 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 score 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 A. 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 this revision indicates a downward shift. Interestingly, G-III Apparel has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
View the Zacks #1 Rank List
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G-III Apparel (GIII) Up 1.3% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for G-III Apparel Group (GIII - Free Report) . Shares have added about 1.3% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is G-III Apparel due for a pullback? 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 drivers.
G-III Q2 Earnings Beat Estimates, Fiscal 2027 EPS View Raised
G-III Apparel reported second-quarter fiscal 2027 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. Adjusted earnings increased year over year, while net sales declined.
The company’s go-forward portfolio delivered high-single-digit sales growth, underscoring momentum in its business as G-III transitions away from the Calvin Klein and Tommy Hilfiger licenses. Price increases and a continued shift toward higher-margin owned brands supported substantial gross-margin expansion.
Management raised its fiscal 2027 GAAP and adjusted earnings guidance, while maintaining its sales forecast and lowering its adjusted EBITDA outlook. G-III completed the Marc Jacobs acquisition, further advancing its strategic transformation. Management is targeting $1 billion in long-term annual revenues for Marc Jacobs and expects the addition to strengthen the company’s portfolio and global fashion positioning.
More on GIII's Q2 Results
G-III reported adjusted earnings of 26 cents per share, beating the Zacks Consensus Estimate of 25 cents. The bottom line also increased 4% from adjusted earnings of 25 cents per share in the year-ago quarter and exceeded the upper end of management’s prior guidance of 15-25 cents.
Net sales declined 9.6% year over year to $554.1 million and missed the Zacks Consensus Estimate of $570 million. Sales came in below management’s prior projection of $570 million. Growth in the go-forward portfolio provided support as the company continued its portfolio transition.
Adjusted net income totaled $11.5 million compared with $11.2 million in the prior-year quarter. Net income increased to $20.2 million or 46 cents per share, from $10.9 million or 25 cents per share, a year earlier.
The adjusted results exclude tariff-refund benefits and related interest income, Marc Jacobs acquisition expenses and a tax benefit from the release of a valuation allowance. The valuation-allowance release contributed a $9.3-million tax benefit to GAAP results in the quarter.
Insight Into G-III's Margins & Expenses
Gross profit was nearly flat year over year at $250.4 million. The gross margin expanded 440 basis points to 45.2% from 40.8%, driven by price increases and a greater mix of higher-margin owned brands. The adjusted gross margin stood at 45.2%.
Selling, general and administrative expenses increased 2% year over year to $231.4 million from $226.8 million. As a percentage of net sales, these expenses rose to 41.8% from 37%, reflecting expense deleverage on the lower revenue base.
Operating profit declined to $10.8 million from $16.3 million in the year-ago quarter. Adjusted EBITDA decreased 13.1% to $20.2 million from $23.3 million, despite the improvement in gross margin.
GIII’s Financial Snapshot: Cash, Debt & Equity Overview
G-III ended the quarter with cash and cash equivalents of $529.2 million compared with $301.8 million in the prior-year period. Inventories declined 13% year over year to $555 million from $639.8 million.
Total debt stood at $7.8 million compared with $15.5 million a year earlier, while stockholders’ equity increased to $1.82 billion from $1.71 billion. Cash less total debt amounted to approximately $521.4 million as of July 31, 2026.
The company returned $12.2 million to shareholders during the quarter, comprising $7.9 million in share repurchases and $4.3 million in dividend payments.
GIII’s Q3 FY’27 Outlook
For the third quarter of fiscal 2027, G-III expects net sales of approximately $870 million compared with $988.6 million in the prior-year quarter. Net income and adjusted net income are each projected between $59 million and $64 million or $1.35-$1.45 per share. These figures compare with net income of $80.6 million, or $1.84 per share and adjusted net income of $83.4 million, or $1.90 per share, in the year-ago period.
G-III’s FY’27 Guidance
For fiscal 2027, G-III expects net sales of approximately $2.71 billion, down from $2.96 billion in fiscal 2026, reflecting approximately $460 million in lost Calvin Klein and Tommy Hilfiger sales. However, net income is now expected at $181-$185 million, or $4.10-$4.20 per share, above prior guidance of $171-$175 million, or $3.85-$3.95 per share.
However, management lowered its fiscal 2027 adjusted EBITDA outlook to $174-$178 million from $178-$182 million, compared with $192.4 million in fiscal 2026. However, adjusted net income is now projected at $97-$101 million, or $2.20-$2.30 per share, up from prior guidance of $95-$99 million, or $2.15-$2.25 per share.
The fiscal 2027 outlook excludes any impact related to Marc Jacobs, with more specific guidance expected when G-III reports third-quarter earnings. Management expects the acquisition to be slightly dilutive in fiscal 2027 and dilutive during the first 12 months after closing, with accretion expected thereafter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -16.72% due to these changes.
VGM Scores
Currently, 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 score 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 A. 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 this revision indicates a downward shift. Interestingly, G-III Apparel has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.