G-III Apparel Upped to Strong Buy - Analyst Blog

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On Dec 6, Zacks Investment Research upgraded G-III Apparel Group, Ltd. ( GIII ) to a Zacks Rank #1 (Strong Buy). Shares of this textile-apparel retailer rose over twofold year to date.

Why the Upgrade?

G-III Apparel has been witnessing rising earnings estimates based on better-than-expected third-quarter fiscal 2014 results and an upbeat guidance for fiscal 2014. Moreover, the company has delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 96.6%. The long-term expected earnings growth rate for this stock is 16.5%.    

G-III Apparel reported third-quarter results on Dec 5. Adjusted quarterly earnings came in at $2.88, which were 10.3% higher than the Zacks Consensus Estimate of $2.61 and up 18.5% year over year. Total revenue climbed 23.0% year over year to $668.7 million and handily beat the Zacks Consensus Estimate of $621.0 million.

Impressive results were driven by robust performance of specialty retail operations and the wholesale business. Going forward, the company expects acquisition of G.H. Bass & Co. to further boost specialty retail operations. Moreover, gross profit for the quarter was $227.3 million, up 19.5% year over year and operating income was $98.7 million, up 21.7% from the prior-year quarter.

Based on robust results and expected synergies from the acquisition of G.H. Bass & Co, G-III Apparel raised its full-year 2014 guidance.  The company now anticipates sales to be about $1.73 billion, as against the earlier projection of $1.61 billion.

Further, net income is expected to be $72-$74 million or $3.47-$3.57 per share compared to the prior range of $68.6-$70.6 million or $3.30-$3.40 per share. On the other hand, adjusted earnings per share are expected to be $3.50 to $3.60 for fiscal 2014.

The Zacks Consensus Estimate for fiscal 2014 increased 8.5% to $3.59 per share over the last 7 days, while for fiscal 2015, it jumped by 5.5% to $4.24 per share over the same time frame.

Other Stocks to Consider

Some better-ranked retail stocks that look promising include Hanesbrands Inc. ( HBI ), Michael Kors Holdings Limited ( KORS ) and Columbia Sportswear Company ( COLM ). While Hanesbrands has a Zacks Rank #1 (Strong Buy), Michael Kors and Columbia Sportswear carry a Zacks Rank #2 (Buy).



COLUMBIA SPORTS (COLM): Free Stock Analysis Report

G-III APPAREL (GIII): Free Stock Analysis Report

HANESBRANDS INC (HBI): Free Stock Analysis Report

MICHAEL KORS (KORS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: COLM , GIII , HBI , KORS

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