Value Play: G-III Apparel Group (GIII)

G-III Apparel Group Inc. (GIII) recently revised full year estimates higher after sales soared 39% in the fiscal second quarter.

G-III Apparel Group is a manufacturer of outerwear, dresses, sportswear, and women’s suits under its own brands of Andrew Marc, Marc New York, Marc Moto, Jessica Howard and Tannery West.

It also has licenses for Calvin Klein, Sean John, Kenneth Cole, Cole Haan, Guess?, Jones New York, Jessica Simpson, Nine West, Ellen Tracy, Tommy Hilfiger, Levi’s and Dockers brands.

The company also has sports licenses for products with the NFL, NBA and MLB, and more than 100 U.S. colleges and universities.

Additionally, G-III operates retail outlet stores under the Wilsons Leather name.

G-III Surprised by 850% in the Fiscal Second Quarter

G-III Apparel Group reported its fiscal second quarter results on Sep 1 which crushed the Zacks Consensus by 17 cents.

Analysts were expecting a loss of 2 cents but the company made a profit of 15 cents. It lost 17 cents per share in the year ago quarter.

Sales jumped 39% to $189 million from $135.9 million in the year ago period. The quarter was boosted by much better than expected sales of women’s dresses, sportswear and suits as well as better results from the Wilsons Leather chain.

Full Year Guidance Raised

G-III expects the momentum to continue in the second half of the year, especially as fall and winter outwear sales loom.

It raised its fiscal 2011 full year earnings per share guidance to a range of $2.60 to $2.70 from $2.20 to $2.30 per share. The company made just $1.83 in the prior fiscal year.

Sales are also expected to be higher, in the range of $1.025 billion, up from the prior forecast of $950 million.

Sales totaled $800.9 million in the previous fiscal year.

Zacks Consensus Estimates Rise

Given the company’s higher guidance, it’s not surprising that the analysts are all moving to raise estimates.

The fiscal 2011 Zacks Consensus has jumped to $2.69 from $2.33 in the last week at all 5 estimates moved higher. This is at the high end of the company’s guidance range and is earnings growth of about 54%.

Fiscal 2012 has also moved higher by 28 cents to $2.97 per share with 4 estimates moving higher out of 7 estimates in the last 7 days.

Value Fundamentals

G-III is a value stock with a forward P/E of just 11.1, just under the industry average of 12.

With its double digit growth rate, it sports a PEG ratio of just 0.6, which easily beats the industry which averages 1.0.

The company has a price-to-book ratio of 2.4, which, under 3.0, is within the parameters of a value stock.

G-III is a Zacks #1 Rank (strong buy) stock.

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