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G-III Apparel Group, Ltd. GIII is currently trading at a low price-to-earnings (P/E) multiple, which is below the average of the Zacks Textile - Apparel industry and Consumer Discretionary sector. With a forward 12-month P/E of 6.51, GIII is priced lower than the industry average of 11.05 and the sector average of 17.62.
This makes the G-III stock undervalued relative to its industry peers, presenting an attractive opportunity for investors seeking exposure to the sector. The company’s Value Score of A underscores its appeal as a potential investment.
GIII Looks Attractive From a Valuation Standpoint
Image Source: Zacks Investment Research
Shares of the company are currently trading 24% below its 52-week high of $36.18 reached on Dec. 13, 2024, making investors contemplate their next moves. In the past month, the GIII stock has gained 3.1%, outperforming the industry’s 15% decline. The company’s focus on global expansion and strategic brand building has enabled it to outpace the sector and the S&P 500 index’s declines of 7.2% and 4.3%, respectively, at the same time frame.
GIII Stock Past-Month Performance
Image Source: Zacks Investment Research
G-III is undergoing a transformative shift toward its owned brands, which account for more than 50% of total net sales as of March 13, a significant increase from previous levels. The company has steadily reduced reliance on licensed brands such as Calvin Klein and Tommy Hilfiger, which represented only 34% of sales in fiscal 2025, down from more than 50% two years ago. This shift enhances profitability, brand control and pricing power.
Key owned brands like DKNY, Donna Karan, Karl Lagerfeld and Vilebrequin achieved more than 20% growth in fiscal 2025, significantly contributing to revenue expansion. The company also generated more than $80 million in licensing royalty income, a 10% year-over-year increase. These results reinforce the strength of G-III’s owned-brand strategy and its ability to drive sustainable growth.
G-III strategically expanded its brand portfolio with the launch of four brands — Donna Karan, Nautica, Halston and Champion outerwear — significantly contributing to revenue growth in the fourth quarter of fiscal 2025. Net sales increased 9.8% year over year to $839.5 million. The relaunch of Donna Karan was particularly successful, exceeding expectations with strong sell-throughs and high average unit retail prices (AURs). By the end of fiscal 2025, the brand had more than 1,500 points of sale and is expected to exceed 1,700 by Spring 2026.
The international licensing strategy for Donna Karan, including new fragrance and jewelry lines, is set to accelerate growth, targeting $1 billion or more in annual net sales. Similarly, the Karl Lagerfeld brand delivered above $580 million in reported net sales, growing more than 20% year over year. G-III anticipates continued double-digit growth for DKNY, Karl Lagerfeld and Donna Karan in fiscal 2026, reinforcing its leadership in the fashion segment.
The company is rapidly expanding its international presence, unlocking revenue streams beyond North America. Currently, only 20% of net sales come from international markets, presenting a significant long-term opportunity. G-III’s 20% investment in All We Wear Group (“AWWG”), a European fashion platform generating $650 million in revenues across 86 countries, will accelerate the company’s global footprint. AWWG will expand DKNY, Donna Karan and Karl Lagerfeld across Spain and Portugal, while G-III will introduce AWWG brands like Pepe Jeans and Hackett to North America.
Karl Lagerfeld’s new distributor in Latin America opened five stores in fiscal 2025, with six planned for fiscal 2026. With continued expansion into Western Europe and Latin America, G-III’s global growth prospects remain strong.
G-III has made substantial investments in digital infrastructure, enhancing omnichannel capabilities. Sales from owned-brand digital platforms grew more than 20% in fiscal 2025, demonstrating strong consumer adoption. The company optimized its digital presence on retailer websites and expanded partnerships with Amazon and Zalando, boosting online visibility.
GIII is leveraging AI-powered technologies to streamline operations, improve supply-chain transparency and enhance digital merchandising, driving incremental margin expansion. The company’s turnaround strategy in North America’s retail segment has cut losses by half and added more than $15 million in profitability, positioning the segment for continued improvement in fiscal 2026.
The company stands out as an attractive investment option due to its shift toward higher-margin owned brands, international expansion and digital transformation. By strengthening proprietary labels like DKNY and Karl Lagerfeld while reducing reliance on licensed brands, the company is enhancing profitability.
G-III’s global growth initiatives and digital advancements, including AI-driven efficiencies and e-commerce expansion, position it for sustained success. With strong market positioning and a solid growth strategy, GIII offers a compelling opportunity for investors. The company currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks are The Gap, Inc. GAP, Stitch Fix SFIX and Gildan Activewear Inc. GIL.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Gap’s fiscal 2025 earnings and revenues indicates growth of 7.7% and 1.6%, respectively, from the fiscal 2024 reported levels. GAP delivered a trailing four-quarter average earnings surprise of 77.5%.
Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for SFIX’s fiscal 2025 earnings implies growth of 64.7% from the year-ago actuals. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.
Gildan Activewear is a manufacturer and marketer of premium quality branded basic activewear. It carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for GIL’s current financial-year earnings and revenues implies declines of 16% and 4.4%, respectively, from the year-ago actuals. GIL delivered a trailing four-quarter average earnings surprise of 5.3%.
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This article originally published on Zacks Investment Research (zacks.com).
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