G-III Apparel (GIII) Stock Up 21% in a Year: Road Ahead in 2022
G-III Apparel's (GIII) brand strength and robust business strategies, including the restructuring initiatives appear encouraging. Its digital business also looks good.
G-III Apparel Group, Ltd. GIII ranks among the recognized players in the Zacks Textile – Apparel industry, which is in the top 15% of all the Zacks Classified industries. Management is focused on updating websites to offer a seamless customer experience.
G-III Apparel continuously strengthens its power brands through innovations as well as partnerships and licensing agreements. Shares of this New York-based retailer have increased 21.2% in the past year, outperforming the industry’s 13.9% growth.
The Zacks Consensus Estimate for this presently Zacks Rank #2 (Buy) player’s current-year and next-year earnings is pegged at $3.71 and $3.72, respectively. The consensus estimates have been revised 14.5% and 5.7% upward over the past 30 days, reflecting analysts’ optimism.
Let’s Delve Deeper
G-III Apparel’s digital business is constantly making a significant contribution to its results. It is progressing well with improvements across the digital platforms of DKNY and Karl Lagerfeld Paris. These sites are likely to offer an immersive brand content to engage consumers, thus facilitating conversion and leveraging sales tools, such as virtual selling. GIII is steadily investing in data analytics capabilities to better know the consumers across channels and boost their shopping experiences. The same is also focused on expanding the distribution channel.
During third-quarter fiscal 2022, sales on GIII’s partner sites increased more than 45% and above 60% on its sites compared with the respective two-year ago readings. In China, digital sales were stronger than store sales. Vilebrequin's digital sales also increased in the reported quarter.
Speaking of brand strength, management is quite optimistic about G-III Apparel’s powerful brands like DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld Paris. GIII had earlier anticipated the annual net wholesale sales potential for these five power brands to be $4 billion.
G-III Apparel is also experiencing strength in its outerwear business. Also, the top categories, including comfort casual product, athleisure and casual sportswear are performing well. Jeans across its power brands beat expectations and is a major contributor to the overall results. With respect to athleisure and casual sportswear, GIII is consistently expanding collections to cash in on consumers' growing demand. Comfort, performance and functionality are driving the athleisure business.
Earlier, G-III Apparel had entered into a long-term global licensing agreement with Inter Parfums to develop and distribute fragrances and related products. Both companies combined their expertise to introduce products under the Donna Karan and DKNY brand banners. Also, GIII had announced plans to acquire an iconic European luxury fashion brand Sonia Rykiel, which is likely to strengthen its global footprint in the luxury space.
GIII-Apparel’s efforts to bolster brands across channels with launches, improved marketing strategies and a broader consumer reach will keep yielding results. GIII’s brand strength coupled with sturdy digital efforts and other strategies are likely to retain its momentum on the bourses.
Eye These Solid Picks
Delta Apparel DLA, the manufacturer of activewear and lifestyle apparel products, sports a Zacks Rank #1 (Strong Buy) at present. The stock has surged 49.4% in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Delta Apparel’s current financial-year sales and earnings per share (EPS) suggests respective growth of 11.6% and 9.4%, from the corresponding year-ago figures. DLA has a trailing four-quarter earnings surprise of 95.5%, on average.
Kontoor Brands KTB, a lifestyle apparel company, flaunts a Zacks Rank of 1 at present. The stock has increased 25.2% in the past year. KTB has an expected EPS growth rate of 8% for three-five years.
The Zacks Consensus Estimate for Kontoor Brands’ next financial-year sales and EPS suggests growth of 7.8% and 13.3%, respectively, from the year-ago corresponding figures. KTB has a trailing four-quarter earnings surprise of 22.2%, on average.
Under Armour UAA, the designer and marketer of athletic footwear, apparel and accessories, has a Zacks Rank of 2, currently. UAA has a trailing four-quarter earnings surprise of 244.5%, on average. Shares of UAA have jumped 20.8% over the past year.
The Zacks Consensus Estimate for Under Armour’s next-year sales and EPS suggests respective growth of 6.1% and 5% from the year-ago corresponding readings. UAA has an expected EPS growth rate of 25% for three-five years.
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