Seeking Alpha
Research analyst, growth, value, IPOs
Profile| Send Message|
( followers)  

G-III Apparel Group (NASDAQ:GIII) reported first quarter earnings on Tuesday. The outerwear and accessory wholesale company reported net sales of $229.4 million, a 16.5% increase from last year's first quarter. This also marked a record for net sales in a quarter by the retailer. Despite strong sales, the company did record a net loss of $0.04 per share in the quarter. Analysts on Yahoo Finance had projected a loss of $0.04.

G-III Apparel Group owns and licenses brands that are sold in categories of outerwear, ready to wear, sports, and accessories. G-III is a leader in outerwear and dresses for women. The company has a growing base in luggage, handbags, and sportswear. The company's owned brands, which made up 21.7% of G-III's fiscal 2012 net sales, include:

· Andrew Marc

· Marc New York

· Marc Moto

· Jessica Howard

· Eliza J

· Black Rivet

· G-III

· Winlit

· Marvin Richards

Licensed brands include:

· Calvin Klein (NYSE:PVH)

· Kenneth Cole

· Cole Haan

· Guess?

· Tommy Hilfiger

· Levi's

· Jessica Simpson

The company also maintains licenses from all four major sport leagues in the United States. G-III has licensing deals with over 100 universities and colleges in the United States as well. G-III has licensing partnerships with Major League Soccer as well. For fiscal 2012, wholesale licensed brands made up 65.5% of net sales.

G-III owned and licensed products are sold in department stores and specialty retailers including:

· JC Penney (NYSE:JCP)

· Dillards (NYSE:DDS)

· Macy's (NYSE:M)

· Bloomingdale's

· Nordstrom (NYSE:JWN)

· Lord & Taylor

· Bon-Ton Stores

· Belk

· Kohl's (NYSE:KSS)

G-III also works as a partnership with JC Penney, Kohl's, and Express to design clothing under the retailers private label programs.

Along with its wholesale businesses, G-III also operates as a retailer with its Wilsons Leather Outlet and Andrew Marc brands. The stores offer outerwear products and accessories. As of January 31, the company had 135 Wilsons Leather Outlet stores and 4 Andrew Marc outlet stores. The company had plans to open fourteen more outlet stores for the current fiscal 2013. Retail stores represented 12.8% of fiscal 2012's net sales.

One of the bright spots for G-III Apparel is a partnership with its licensed Calvin Klein brand. The first Calvin Klein Performance store opened in the United States in 2012. The company will open several more in this fiscal year. A joint venture was signed in March to expand the retailer to China and Hong Kong. G-III maintains 51% ownership and will begin building stores in fall of 2012.

For fiscal 2013, analysts are projecting the company to earn $2.70 per share, which makes shares trade at a price to earnings ratio of 9.2. G-III reaffirmed its full year guidance of $2.62 to $2.72 per share. In 2014, analysts see the company earning $3.07. I think the company should trade closer to a 10 to 12 ratio for next year's earnings. This would give shares a price target of $30.70 to $36.84. I think shares are worth buying at this level.

Source: Analyzing G-III Apparel's First Quarter Earnings