GIII - Embedded Expectations Analysis - 2018 11 08
The G-III Apparel Group, Ltd. (GIII:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 15.0x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management is concerned about their capital budgeting, global growth opportunities, and DKNY product mixSpecifically, management may be concerned about their year-to-date capital expenditures, and their falling cash reserve levels. Additionally, they may be exaggerating how favorable their positioning is in North America, and may lack confidence in their ability to find growth opportunities around the world. Moreover, they may lack confidence in their ability to effectively expand their brand in China and the Middle East, and may be concerned about changes to their DKNY product mix. Furthermore, they may lack confidence in their ability to sustain strong performance in their Donna Karan businesses, and to increase Vilebrequin sales
G-III Apparel Group designs, sources and markets a range of apparel, including outerwear, dresses, sportswear, swimwear, women's suits and women's performance wear, women's handbags, footwear, small leather goods, cold weather accessories and luggage. The company has two segments: wholesale operations, which includes sales of products under brands licensed by the company from third parties and sales of products under its own brands and private label brands, and sales related to the Vilebrequin business; and retail operations, which consists of the company's Wilsons Leather, G.H. Bass and DKNY stores operated as outlet stores, and a limited number of Calvin Klein Performance and Karl Lagerfeld Paris stores.
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