G-III Apparel Group Ltd. (GIII) is thriving in the challenging consumer environment, posting better than expected Q3 results in early December and providing an optimistic view on Q4.
Company Description
G-III Apparel Group designs and manufactures a range of leather outerwear and accessories primarily in the United States. The company sells its products through its ownership of 120 Wilson Leather Outlet stores, but also has branding contracts with other retailers like Tommy Hilfiger, Coach and Kenneth Cole. G-III was founded in 1956 and has a market cap of $361 million.
You’d be hard pressed to find a smoother trend than GIII has been riding higher for most of the last nine months. Shares of GIII got an extra boost on Dec 2 when the company reported better than expected Q3 results.
Third-Quarter Results
Sales were up 3.4% from last year to $363.5 million. Earnings also came in strong at $1.87, 23 cents ahead of the Zacks Consensus Estimate. The company has surprised in each of the last 3 quarters by an average of 23%.
G-III’s gross margin expanded 200 basis points to 34%, while its cash position increased $9 million to $17 million.
An Optimistic View
The company was optimistic about its near-term prospects, with CEO Morris Goldfarb saying “in the short term, we expect a good finish to the fiscal year and a strong spring season for the first quarter of next year.”
Estimates Jump
Analysts agree with the positive view, with estimate jumping higher on the good quarter. The current year added 28 cents, now at $1.34. The next-year estimate is pegged at $1.56, a 17% growth projection.
Based on the current-year estimate, this stock has a forward P/E of 16, in line with the overall market.
The Chart
Shares of GIII have had a great run over the last 9 months after bottoming out with the market in early March. More recently, shares have run into some short-term resistance at $22, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
