Why G-III Apparel Shares Popped

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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 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.

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