G-III Shares Plunged: What You Need to Know (GIII)

G-III Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of sportswear specialist G-III Apparel Group (Nasdaq: GIII ) sank 17% on Thursday after its second-quarter earnings and full-year forecast missed Wall Street expectations.

So what: This marks the second straight quarter in which G-III has whiffed on its previous guidance, so investors are naturally growing skeptical over management's ability to meet targets. The company has been forced to offer customers significant margin-pressuring discounts in recent months, suggesting that the market remains a lot softer than many investors think.

Now what: Don't expect things to turn around anytime soon. G-III now sees full-year earnings of just $3.05 to $3.15 per share, well below the average analyst estimate of $3.21 per share. Of course, with the stock now down more than 45% since the end of April, and trading at a substantial P/E discount to rivals Columbia Sportswear (Nasdaq: COLM ) and Nike (NYSE: NKE ) , G-III seems like an intriguing bargain for long-term Fools.

Interested in more info on G-III? Add it to your watchlist.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Nike and Columbia, as well as creating a diagonal call position in Nike. Try any of our Foolish newsletter services free for 30 days.

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