Will Wholesale Unit Drive G-III Apparel's (GIII) Q3 Earnings?

G-III Apparel Group, Ltd. (NASDAQ:GIII) is likely to report top and bottom-line growth for third-quarter fiscal 2020.

The Zacks Consensus Estimate for fiscal third-quarter earnings has gone up a penny to $1.95 over the past 30 days. This suggests an increase of 3.7% from the year-ago period’s reported figure. The consensus mark for revenues is $1,173 million, indicating a rise of 9.3% from the figure reported in the year-ago quarter.

Notably, this manufacturer, designer and distributor of apparel and accessories delivered a positive earnings surprise of 4.6 % in the last reported quarter. Further, its earnings have outperformed the Zacks Consensus Estimate by 11.6%, on average, in the trailing four quarters.

Key Factors to Note

G-III Apparel has been bolstering brands across channels through new launches and improved marketing strategies. The company’s strong Wholesale segment has been driving the performance. The segment has been gaining from DKNY, Tommy Hilfiger and Calvin Klein brands. Effective merchandising, sourcing and selling strategies have been boosting the Tommy Hilfiger brand. Moreover, the company’s efforts to expand the Calvin Klein business have been yielding results.

Further, the company has been launching products, along with opening and reshaping stores under the DKNY and Donna Karan banners. Also, G-III Apparel has been augmenting licensing agreements for these brands to reach out to a broader consumer base. These, in turn, have been benefiting the company’s Wholesale segment. In its last earnings call, management projected enhanced performance of DKNY and Karl Lagerfeld stores for the second half of the year, backed by improved products and store designs. This is likely to reflect on the company’s third-quarter performance. The Zacks Consensus Estimate for third-quarter sales in the Wholesale segment is currently pegged at $1,117 million, suggesting growth of 11.1% from the figure reported in the year-ago period.

However, the company’s Retail segment has been dismal for a while now, thanks to weakness in underlying brands. Sales decline at Wilsons and G.H. Bass has been hampering the segment’s performance. The consensus mark for third-quarter sales in the Retail segment is currently pegged at $82 million compared with $111 million reported in the year-ago period.

Apart from this, potential tariff impacts are concerns.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for G-III Apparel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

G-III Apparel has an Earnings ESP of +0.94% and a Zacks Rank #3.

Other Stocks With Favorable Combinations

Here are some other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Costco (NASDAQ:COST) currently has an Earnings ESP of +1.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

lululemon athletica (NASDAQ:LULU) presently has an Earnings ESP of +0.73% and a Zacks Rank #3.

Dollar General (NYSE:DG) currently has an Earnings ESP of +0.47% and a Zacks Rank #3.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>