This Apparel Group 'Not In A Panic Mode' Over Trump Tariffs, Although Uncertainty Looms

G-III Apparel Group Ltd GIII shares were trading under pressure despite the company reporting upbeat fourth-quarter results.

According to Telsey Advisory Group, a meeting with the management highlighted a "more challenging sourcing environment" due to looming tariffs and some growth opportunities.

The G-III Apparel Group Analyst: Analyst Dana Telsey maintained a Market Perform rating and price target of $30.

The G-III Apparel Group Thesis: While it is tough to estimate the severity of the problem caused by tariffs, the company has some sourcing strategies that can be implemented. Management is "not in a panic mode," Telsey said in the note.

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"GIII is the dominant company in the factories it sources from and the factories themselves are in good financial standing," she added.

The analyst stated there is uncertainty around how consumers' discretionary spending will be adjusted due to the rising prices of essentials. "The brands in its portfolio are strong, its balance sheet is solid, and it has meaningful relationships with its vendors and customers."

As tariffs are likely to have a ripple effect, G-III Apparel Group is "assessing the elasticity of demand for discretionary goods." At the same time, both the Donna Karan and Karl Lagerfeld brands offer the strongest pricing power across its portfolio, Telsey said.

GIII Price Action: Shares of G-III Apparel Group declined by 0.25% to $25.14 at the time of publication on Friday.

Read More:  G-III Apparel Boosts Profit Forecast As Brand Growth Surges 30% In Q3

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