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G-III's DTC Strategy Gains Traction as DKNY & Donna Karan Grow Online
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Key Takeaways
DKNY's online sales grew in the mid-20% range, while Donna Karan's brand sales surged more than 45%.
Marc Jacobs strengthens GIII's DTC business with over 100 stores and a growing retail presence.
GIII raised fiscal 2027 adjusted EPS guidance to $2.20-$2.30, excluding Marc Jacobs' contribution.
G-III Apparel Group (GIII - Free Report) is building its direct-to-consumer (DTC) business around its owned brands as its Calvin Klein and Tommy Hilfiger licenses wind down. New merchandise, healthy full-price selling and targeted marketing are supporting DKNY’s momentum. Donna Karan is seeing demand for new products and promoting the brand through social content and partnerships. Marc Jacobs adds an established store network and e-commerce business.
DKNY posted gains online and in stores in the second quarter of fiscal 2027. Sales on DKNY.com grew in the mid-20% range year over year, helped by higher conversion and average selling prices. Comparable sales at DKNY stores rose in the mid-single digits. Donna Karan also recorded gains in website traffic, conversion and average selling prices, while its overall brand sales climbed more than 45%.
Quarterly retail segment sales fell to $39.5 million from $41.1 million, mainly because G-III transferred its G.H. Bass online business to a licensee. Increased promotions weighed on retail gross margin, which fell to 50.6% from 52.4%. Over the first half, retail sales rose to $80.1 million from $77.4 million, helped by higher sales at DKNY and Karl Lagerfeld Paris stores and on Donna Karan’s website.
Marc Jacobs expanded G-III’s DTC reach when the deal closed on Sept. 1. The brand generates roughly two-thirds of its revenues through direct channels, including its website and more than 100 company-operated stores. Most locations are outlets, which management describes as profitable at the store level. G-III plans to invest in stores, e-commerce and marketing.
G-III raised its fiscal 2027 adjusted earnings per share guidance to $2.20–$2.30. Management continues to expect high-single-digit sales growth for its go-forward portfolio, which excludes Calvin Klein and Tommy Hilfiger. The fiscal 2027 outlook excludes Marc Jacobs. Over the longer term, management sees potential for Marc Jacobs to generate $1 billion in annual revenues as it expands across product categories, sales channels and markets.
GIII’s Price Performance, Valuation & Estimates
Shares of G-III have gained 18.3% over the past month compared with the industry’s 11% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, GIII trades at a forward price-to-sales ratio of 0.51, below the industry’s average of 2.47. It has a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for G-III’s fiscal 2027 earnings implies a year-over-year decline of 13.8%, whereas the estimate for fiscal 2028 indicates a decline of 8.4%. Earnings estimates for fiscal 2027 and 2028 have remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
GIII currently carries a Zacks Rank #3 (Hold).
Key Picks
Crocs, Inc. (CROX - Free Report) is one of the leading footwear brands with its focus on comfort and style. The company offers a wide variety of footwear products, including sandals, wedges, flips and slides that cater to people of all ages. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Crocs’ current financial-year earnings and sales suggests growth of 16.9% and 3.4%, respectively, from the year-ago actuals. CROX delivered a trailing four-quarter average earnings surprise of 10.9%.
Ralph Lauren Corp. (RL - Free Report) is a major designer, marketer and distributor of premium lifestyle products. It offers products in the apparel, footwear, accessories, home furnishings and other licensed product categories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year earnings and sales suggests growth of 14.7% and 8%, respectively, from the year-ago actuals. DBI delivered a trailing four-quarter average earnings surprise of 8.4%.
Urban Outfitters, Inc. (URBN - Free Report) is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales suggests growth of 14% and 9.5%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 9.7%.
View the Zacks #1 Rank List
Image: Bigstock
G-III's DTC Strategy Gains Traction as DKNY & Donna Karan Grow Online
Key Takeaways
G-III Apparel Group (GIII - Free Report) is building its direct-to-consumer (DTC) business around its owned brands as its Calvin Klein and Tommy Hilfiger licenses wind down. New merchandise, healthy full-price selling and targeted marketing are supporting DKNY’s momentum. Donna Karan is seeing demand for new products and promoting the brand through social content and partnerships. Marc Jacobs adds an established store network and e-commerce business.
DKNY posted gains online and in stores in the second quarter of fiscal 2027. Sales on DKNY.com grew in the mid-20% range year over year, helped by higher conversion and average selling prices. Comparable sales at DKNY stores rose in the mid-single digits. Donna Karan also recorded gains in website traffic, conversion and average selling prices, while its overall brand sales climbed more than 45%.
Quarterly retail segment sales fell to $39.5 million from $41.1 million, mainly because G-III transferred its G.H. Bass online business to a licensee. Increased promotions weighed on retail gross margin, which fell to 50.6% from 52.4%. Over the first half, retail sales rose to $80.1 million from $77.4 million, helped by higher sales at DKNY and Karl Lagerfeld Paris stores and on Donna Karan’s website.
Marc Jacobs expanded G-III’s DTC reach when the deal closed on Sept. 1. The brand generates roughly two-thirds of its revenues through direct channels, including its website and more than 100 company-operated stores. Most locations are outlets, which management describes as profitable at the store level. G-III plans to invest in stores, e-commerce and marketing.
G-III raised its fiscal 2027 adjusted earnings per share guidance to $2.20–$2.30. Management continues to expect high-single-digit sales growth for its go-forward portfolio, which excludes Calvin Klein and Tommy Hilfiger. The fiscal 2027 outlook excludes Marc Jacobs. Over the longer term, management sees potential for Marc Jacobs to generate $1 billion in annual revenues as it expands across product categories, sales channels and markets.
GIII’s Price Performance, Valuation & Estimates
Shares of G-III have gained 18.3% over the past month compared with the industry’s 11% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, GIII trades at a forward price-to-sales ratio of 0.51, below the industry’s average of 2.47. It has a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for G-III’s fiscal 2027 earnings implies a year-over-year decline of 13.8%, whereas the estimate for fiscal 2028 indicates a decline of 8.4%. Earnings estimates for fiscal 2027 and 2028 have remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
GIII currently carries a Zacks Rank #3 (Hold).
Key Picks
Crocs, Inc. (CROX - Free Report) is one of the leading footwear brands with its focus on comfort and style. The company offers a wide variety of footwear products, including sandals, wedges, flips and slides that cater to people of all ages. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Crocs’ current financial-year earnings and sales suggests growth of 16.9% and 3.4%, respectively, from the year-ago actuals. CROX delivered a trailing four-quarter average earnings surprise of 10.9%.
Ralph Lauren Corp. (RL - Free Report) is a major designer, marketer and distributor of premium lifestyle products. It offers products in the apparel, footwear, accessories, home furnishings and other licensed product categories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year earnings and sales suggests growth of 14.7% and 8%, respectively, from the year-ago actuals. DBI delivered a trailing four-quarter average earnings surprise of 8.4%.
Urban Outfitters, Inc. (URBN - Free Report) is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales suggests growth of 14% and 9.5%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 9.7%.