Why G-III Apparel Shares Are Plunging Today

Zinger Key Points
  • G-III Apparel's Q1 FY25 sales of $609.7 million missed the consensus estimate of $616.3 million.
  • Despite a gross profit increase, operating margin declined, and adjusted EPS stood at $0.12 vs. $0.13 in the prior year quarter.
  • G-III Apparel provided weak Q2 forecast.

G-III Apparel Group, Ltd. GIII shares are trading lower after the company reported first-quarter FY25 results.

Sales of $609.7 million missed the consensus estimate of $616.3 million. The gross profit rose to $258.9 million from $249.8 million a year ago. Operating profit declined to $13.504 million from $15.264 million in the prior year quarter.

Adjusted EPS stood at $0.12 versus $0.13 in the prior year quarter and above the consensus loss of $0.03.

The company held $508.4 million in cash and equivalents as of April-end.

Outlook: G-III continues to see FY25 sales of $3.20 billion (consensus $3.189 billion) and raised adjusted EPS to $3.58-$3.68 (from $3.50 – $3.60 earlier) versus the consensus of $3.55.

It now targets an adjusted EBITDA of $295.0 million-$300.0 million (vs. $290 million–$295 million expected earlier).

G-III sees second-quarter net sales of $650 million vs. consensus of $665.45 million, with adjusted EPS of $0.22-$0.32 vs. estimate of $0.33.

Morris Goldfarb, G-III’s Chairman and Chief Executive Officer, said, “Our performance was driven by double-digit increases in DKNY and Karl Lagerfeld along with a successful relaunch of Donna Karan, reflecting our commitment to investing in our owned brands and our ability to meet the ever-changing needs of our consumers.”

“This morning’s announcement of the amendment and extension of our ABL credit facility further solidifies our financial position. With approximately $1 billion in cash and availability, we are well positioned to continue to invest in our brands and infrastructure to drive long-term growth and shareholder value.”

Apart from this, G-III announced a strategic partnership and investment in All We Wear Group, acquiring an approximately 12% ownership stake. As part of this partnership, AWWG will become the agent for DKNY, Donna Karan, and Karl Lagerfeld in Spain and Portugal.

Investors can gain exposure to the stock via Pacer US Small Cap Cash Cows Growth Leaders ETF CAFG and Pacer US Small Cap Cash Cows 100 ETF CALF.

Price Action: GIII shares are trading lower by 12.81% at $27.29 at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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