Is G III Apparel Group (GIII) Below Fair Value Following Weak Earnings Guidance?

G-III Apparel Group (GIII) is back in focus after its latest earnings release showed a 9.6% year-on-year revenue decline, a miss versus analyst expectations, and forward EPS guidance that came in well below forecasts.

The latest results landed in a weak price backdrop for G-III Apparel Group, with the share price down 23% over the past 90 days and 9% year to date. However, the 1-year total shareholder return is still slightly positive at 3.6%, which suggests that recent selling pressure reflects a shift in sentiment after a stronger earlier period rather than a long-running collapse in investor returns.

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G-III Apparel Group now trades well below average analyst targets after a sharp pullback, yet the stock also carries weak recent guidance and a low value score. Is this a discount that reflects real risk?

Most Popular Narrative: 23% Undervalued

On the most followed view, G-III Apparel Group’s fair value sits at $34.75 versus a last close of $26.77, which puts the recent slide against a thesis that still sees meaningful upside once the PVH license transition plays through.

Ongoing replacement of Calvin Klein and Tommy Hilfiger licenses with higher margin owned brands such as DKNY, Donna Karan, Karl Lagerfeld and Marc Jacobs, with roughly US$700 million of the anticipated US$1.2b revenue loss already offset, could continue to support revenue and gross margin mix.

See why 3 investors see G-III Apparel Group as 23% undervalued.

Result: Fair Value of $34.75 (UNDERVALUED)

Still, the loss of Calvin Klein and Tommy Hilfiger licenses, along with any renewed supply chain disruption, could quickly challenge the upbeat G-III Apparel Group narrative.

Find out about the key risks to this G-III Apparel Group narrative.

Another View: SWS DCF Flags Less Upside

While analysts see G-III Apparel Group as undervalued against a $34.75 target, the Simply Wall St DCF model points the other way. Based on projected cash flows, an estimate of $23.62 per share sits below the recent $26.77 price. This frames the stock as expensive rather than cheap. Which lens do you trust when cash flows and earnings send mixed signals?

To understand how this cash flow view is built and where the pressure points sit, Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out G-III Apparel Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 27 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed messages on G-III Apparel Group so far. Take a few minutes to review the numbers, pressure points, and potential upsides yourself in 1 key reward and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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