Why G-III Apparel Shares Popped

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 clothing company G-III Apparel Group (Nasdaq: GIII  ) zoomed higher by as much as 11% today after the company reported better-than-expected second-quarter results.

So what: For the quarter, G-III, which sells apparel under the Marc New York label, but also has fashion licenses for the Sean John, Kenneth Cole, and Calvin Klein brands, saw revenue rise 9% to $251.5 million as net income dipped slightly to $0.07 from the $0.08 it reported in the year-ago period. Despite the drop in income, these results were more or less in line with Wall Street's expectations of $250.5 million in revenue and a profit of $0.07. Where G-III really got its boost was in its upped full-year forecast, which now calls for revenue of $1.41 billion (up from $1.35 billion), and an EPS range of $2.68-$2.78 (including one-time costs), up from a previous forecast of $2.62-$2.72.

Now what: Here we go again with more evidence that consumers are cutting back spending on everything except for brand names. Michael Kors (NYSE: KORS  ) has been the poster child for brand-name-clothing growth, posting same-store sales growth north of 30% in multiple quarters, and it appears G-III is experiencing that same lift from its brand name licenses. I admit to still being a little leery about jumping on a company that's rocketed higher in the apparel sector, considering that so many retailers have fallen short of earnings recently, but it definitely deserves a spot on My Watchlist.

Craving more input? Start by adding G-III Apparel to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2007256, ~/Articles/ArticleHandler.aspx, 9/22/2014 12:20:03 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement