GIII

Why G-III Apparel Stock Was Falling Today

Shares of G-III Apparel Group (NASDAQ: GIII) dropped after the diversified company reported disappointing top-line results in its fourth-quarter earnings report. As a result, G-III stock was down 13.1% on the news as of 3:19 p.m. ET.Women's blouses on a rack in a clothing store

Image source: Getty Images.

G-III comes up short in Q4

G-III, which licenses and owns several apparel brands, said that revenue in the quarter fell 10.5% to $764.8 million, which was well below estimates of $817.5 million. The company slashed its inventories in the quarter, which fell 27%, as part of a strategy to shore up margins as gross margin jumped from 33% to 36.8%.

The company also credited its margin expansion to the growth of its higher-margin, owned brands like DKNY, Karl Lagerfeld, and Vilebrequin. These made up 47% of net sales, compared to 40% in the quarter a year ago.

Improving margins also helped drive adjusted earnings per share up from $0.41 to $0.76, which was better than estimates of $0.67.

CEO Morris Goldfarb also noted the company's improving financial position saying, "Our diverse business model and disciplined operating approach has allowed us to further strengthen our credit profile as we ended the year in a net cash position, with over a billion dollars in liquidity."

What's next for G-III

Looking ahead, the company expects revenue of around $3.2 billion this year, representing an increase of 3% and matching the consensus. On the bottom line, it expects adjusted earnings per share of $3.50-$3.60, which is well below the $4.04 per share it made last year.

Management noted incremental expenses of around $60 million related to the launches of Donna Karan, Nautica, and Halston. Nonetheless, investors were still disappointed with the guidance and sent the stock sliding on the news.

Should you invest $1,000 in G-III Apparel Group right now?

Before you buy stock in G-III Apparel Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and G-III Apparel Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of March 11, 2024

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends G-III Apparel Group. The Motley Fool has a disclosure policy.

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

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.