What Happened?
Shares of fashion conglomerate G-III (NASDAQ:GIII) jumped 16% in the pre-market session after the company reported strong fourth quarter results which beat analysts' revenue expectations. In addition, its EPS guidance for next quarter exceeded Wall Street's estimates.
The real story was the nearly 10% increase in sales, driven by solid growth in its owned brands, including DKNY, Donna Karan, Karl Lagerfeld, and Vilebrequin. But there's a catch. The company is still moving away from its Calvin Klein and Tommy Hilfiger licenses, and that's creating a bit of a headwind. With that transition in play, it wasn't exactly shocking to see them miss full-year revenue guidance and come up short on next quarter's revenue outlook.
Overall, this was a mixed yet decent quarter which showed that investors were becoming more familiar with the long term picture.
After the initial pop the shares cooled down to $26.60, up 4.9% from previous close.
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What The Market Is Telling Us
G-III’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. But moves this big are rare even for G-III and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 23.8% on the news that the company reported strong second-quarter earnings results. G-III blew past analysts' EBITDA and EPS expectations.
On the other hand, its revenue guidance for the next quarter was underwhelming, and its revenue fell short of Wall Street's estimates. Zooming out, we think this was a mixed quarter featuring some areas of strength but also some blemishes.
G-III is down 16.9% since the beginning of the year, and at $26.60 per share, it is trading 26.3% below its 52-week high of $36.10 from December 2024. Investors who bought $1,000 worth of G-III’s shares 5 years ago would now be looking at an investment worth $1,752.
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