Here's Why G-III Apparel is a Promising Stock for Investors

G-III Apparel Group, Ltd. GIII is poised for sustained growth and profitability, with a strategic emphasis on omnichannel capabilities, market expansion, robust brand development and effective financial management laying a solid foundation for success. The company's diverse strategies and strong execution are projected to drive significant sales growth and bolster its global market presence.

G-III Apparel is enhancing its e-commerce platforms, especially for its DKNY and Karl Lagerfeld Paris brands. This includes modernizing site aesthetics, expanding CRM capabilities and improving technical operations. Partnerships with major online retailers, such as Amazon and Fanatics, support this digital push.

Through a strategic partnership with AWWG, G-III Apparel is expanding its European presence, leveraging AWWG's infrastructure in Spain and Portugal. Additionally, AWWG's strong position in the India market offers growth opportunities for G-III's brands.

GIII is transforming its retail business in North America by making significant marketing investments to boost global brand awareness and sales. This includes reducing reliance on PVH brands and increasing market penetration in fast-growing regions like India and China. G-III Apparel plans to add more than 2,500 points of sale at retail partners across better department stores this fall, which is expected to drive significant sales growth.

Image Source: Zacks Investment Research

Brand Development & Marketing Bode Well

Brand development and marketing efforts have been robust for G-III Apparel. DKNY saw strong double-digit sales growth in the first quarter of fiscal 2025, driven by marketing campaigns and strategic partnerships, including one with the New York Yankees. International pop-up events have bolstered European expansion.

Karl Lagerfeld experienced nearly 50% growth in North America, expanding distribution to 500 locations and introducing the sustainable Karl Lagerfeld Jeans line, with plans to leverage the upcoming Olympics for brand promotion.

The relaunch of Donna Karan was a standout success, marked by high average unit retails, better sell-through rates and significant retailer margins. Marketing campaigns featuring Cindy Crawford and Karlie Kloss have driven consumer engagement.

Driven by these factors, G-III Apparel reaffirmed its fiscal 2025 net sales guidance at $3.2 billion, indicating 3% year-over-year growth. This positive outlook is supported by robust brand performance, strategic marketing investments and effective cost management.

Estimate Trend

The positive sentiment surrounding G-III Apparel is reflected in the upward revisions of the Zacks Consensus Estimate for earnings per share. Over the past 30 days, analysts have increased their estimates, resulting in an upward revision of 8 cents in the consensus estimate of $3.63 per share. The consensus estimate for the next fiscal year has also advanced 11 cents to $3.73 per share. Impressively, the Zacks Consensus Estimate for current and next year's sales is pegged at $3.20 billion and $3.30 billion, suggesting year-over-year growth of 3.3% and 3.2%, respectively.

Valuation Standpoint

From a valuation perspective, G-III Apparel's shares present an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 7.09, below the five-year median of 7.72 and the industry's average of 12.49, the stock offers compelling value for investors seeking exposure to the sector. The company currently has a Value Score of A, further validating its appeal.

Conclusion

In the past six months, shares of G-III Apparel have lost 14.5% compared with the Zacks Textile - Apparel industry's steeper decline of 20.5%. Despite this relative underperformance, the company presents an attractive opportunity due to its discounted valuation compared with its industry peers. The upward movement in the Zacks Consensus Estimate highlights the GIII stock's solid fundamentals.

Additionally, the company's strategic initiatives, including its e-commerce endeavors, international expansion, growing direct-to-consumer penetration and owned-brand exposure, are expected to help effectively navigate the current operating environment. Current stakeholders should consider accumulating shares and potential investors might find this an ideal entry point to capitalize on the stock's anticipated recovery. With G-III Apparel flaunting a Zacks Rank #2 (Buy) at present, its growth prospects appear promising.

3 Other Promising Stocks

A few other top-ranked stocks are Hanesbrands Inc. HBI, Skechers U.S.A., Inc. SKX and Guess, Inc. GES.

Hanesbrands engages in the designing, manufacturing, sourcing and sale of apparel essentials. The company currently sports a Zacks Rank #1 (Strong Buy).

The Zacks Consensus Estimate for HBI's 2024 earnings indicates growth of 666.7% from the 2023 reported figures. HBI has a trailing four-quarter average earnings surprise of 10.2%.

Skechers U.S.A., Inc. designs, develops, markets and distributes footwear. The company has a Zacks Rank of 1 at present. SKX delivered a 20.9% earnings surprise in the last reported quarter.

The consensus estimate for Skechers' 2024 earnings and sales indicates growth of 16.9% and 10.6%, respectively, from the 2023 reported figures. SKX has a trailing four-quarter average earnings surprise of 34.1%.

Guess designs, markets, distributes and licenses casual apparel and accessories. It has a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for Guess' fiscal 2024 sales indicates growth of 11.7% from the year-ago period's reported figures. GES has a trailing four-quarter average earnings surprise of 31%.

To read this article on Zacks.com click here.