Bridging The Gap To Profitability: Analyst Outlines Challenges And Opportunities For GIII Apparel In FY24

- Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of G-III Apparel Group GIII with a price target of $14.
- GIII is scheduled to report Q1 earnings results on Tuesday, June 6, before the market opens.
- For Q1, the analyst sees EPS of $(0.10) as compared to the consensus of $(0.10) and guidance for EPS in the range of $(0.15) - $(0.05).
- On the topline, the analyst looks for total sales to decline 18.7% to $560 million, compared to the consensus for 19.0% contraction to $558 million and in line with guidance for sales of $560 million.
- Reflecting ongoing inflationary pressures on both the consumer and GIII, including costs related to managing higher levels of inventory, GIII took a cautious view on FY24, said the analyst.
- GIII's conservative FY24 outlook seems appropriate, in the analyst’s view, given the company's exposure to the North American wholesale channel.
- Encouragingly, GIII has been increasing its higher margin owned-brand exposure, growing DTC penetration, and strengthening its owned brand portfolio, added the analyst.
- Easing port congestion and improving lead times should be tailwinds in FY24, leading to an improvement in inventories, said the analyst.
- With macro pressures and consumer uncertainties persisting, near-term execution and the pathway to long-term profitability potential remains challenging, opined the analyst.
- Price Action: GIII shares are trading lower by 5.6% at $16.09 on the last check Wednesday.

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