Shares of G-III Apparel (NASDAQ: GIII) were on the move today, jumping after the apparel licensing company posted better-than-expected results in its fiscal 2025 second-quarter earnings report.
As of 1:03 p.m. ET, the stock was up 24.3% on the news.
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G-III soars again
Revenue in the quarter ended July 31 continued to decline at G-III, falling 2% to $644.8 million, which was below estimates at $649.4 million. G-III owns brands like DKNY and Karl Lagerfeld and licenses others like Calvin Klein, but the company is successfully managing the business to drive increased profit.
However, investors responded favorably to the results further down the income statement as adjusted earnings per share (EPS) jumped from $0.40 to $0.52, easily beating the consensus at $0.27. A 24% reduction in inventories to $610.5 million also helped drive the bottom line higher, and the company cut selling, general, and administrative (SG&A) expenses by 4% to $229 million.
Management said performance in its owned brands was strong with DKNY and Karl Lagerfeld up double digits. The company also added a new licensing agreement with Converse in the quarter.
CEO Morris Goldfarb said the company was raising its earnings guidance for the year, adding, "Despite the macroeconomic environment, we remain optimistic about the remainder of the year and our order book is in a good position for the important fall and holiday seasons."
Can G-III keep climbing?
G-III continues to forecast a 3% increase in net sales to $3.2 billion, in line with estimates. On the bottom line, meanwhile, it raised its forecast for adjusted EPS from a range of $3.58 to $3.68 to a range of $3.95 to $4.05, which compares to $4.04 in fiscal 2024 and the analyst consensus at $3.66.
Based on that forecast, G-III trades at a forward P/E of less than 8. There's more upside for the stock if it can return to growth and continue to improve its margins.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends G-III Apparel Group. The Motley Fool has a disclosure policy .
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