G-III Apparel Group, Ltd.
) reported adjusted earnings of $2.43 per share in the third
quarter of fiscal 2013, surpassing the Zacks Consensus Estimate
of $2.31. Reported results were also above the company's guided
range of $2.25 to $2.35.
On a GAAP basis, including expenses associated with the
acquisition of Vilebrequin, the company recorded earnings of
$2.37 per share, substantially above the year-ago earnings of
$2.16 per share.
G-III Apparel's net sales surged 6.6% year over year to $543.5
million, but fell short of the Zacks Consensus Estimate of $569.0
million as shipments during the end of October were disrupted by
The significant growth in net sales was chiefly aided by improved
performance of wholesale licensed apparel (up 7.6%
year-over-year) and retail operations (up 21.0%), partially
offset by a dip of 6.7% in the wholesale non-licensed segment.
The robust wholesale licensed apparel sales were driven by higher
sales of Calvin Klein products. Retail sales surged on the back
of unit growth as well as comp uptick of 18.9% in the quarter.
During the quarter, G-III Apparel's gross profit expanded 17.2%
to $190.2 million due to lower input costs.
At the end of the quarter, G-III Apparel had cash of $39.6
million and shareholders' equity of $419.0 million, compared with
$16.1 million and $351.9 million in the year-ago quarter,
respectively. Long-term debt at the end of the quarter was $18.6
Based on strong third quarter results, the company raised its
adjusted earnings per share guidance for 2013 to $2.82-$2.92 from
the previous forecast of $2.74 to $2.84. Adjusted EBITDA outlook
is also increased to $110.8 million-$114.2 million from $108.2
million-$111.5 million. However, net sales projection is cut from
the earlier forecast of $1.41 billion to $1.39 billion.
G-III expects to conclude 2013 on a great note based on expansion
through unit growth, strong demand for its core products and new
business initiatives. In the future, management also expects to
grow through acquisitions and presently remains upbeat regarding
the acquisition of the leading luxury resort brand,
The acquisition will boost growth through geographic expansion
and support in the development of a high margin multi-category
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Additionally, we expect estimates to go up in the coming days
driven by upbeat third quarter results and increased outlook. The
Zacks Consensus Estimates for fiscal 2013 and fiscal 2014 are
pegged at $2.86 and $3.25, respectively.
G-III, engaged in the apparel business, currently retains a Zacks
#1 Rank, which translates into a short-term Strong Buy rating. We
are also maintaining our long-term Outperform recommendation on
the stock. G-III peers include
Columbia Sportswear Company