GIII Beats on Q3 Earnings, Ups FY26 Outlook Despite Tariff Pressures

G-III Apparel Group, Ltd. GIII has reported third-quarter fiscal 2026 results, wherein the top line missed the Zacks Consensus Estimate and the bottom line beat the same. The company’s net sales and earnings decreased year over year. 

However, the fiscal third-quarter results were impacted by the performance of its brand portfolio, especially owned brands, along with a strong full-price sales mix and successful tariff mitigation efforts. Based on the fiscal third-quarter results and despite continued consumer uncertainty and tariff-related margin pressure, the company has raised its fiscal 2026 earnings guidance. 

With a strong brand portfolio, an efficient operating model, and a solid financial position, the company is confident in achieving its fiscal 2026 goals while continuing to return capital to stockholders and pursue profitable growth opportunities.

More on GIII's Q3 Results

Adjusted earnings per share (EPS) of $1.90 beat the Zacks Consensus Estimate of $1.60. However, the figure decreased 26.6% from the year-earlier quarter’s $2.59. 

Net sales decreased 9% year over year to $988.6 million and lagged the consensus estimate of $1,011 million.

Insight Into G-III Apparel's Margins & Expenses

Gross profit decreased 11.7% year over year to $381.5 million in the fiscal third quarter. We note that the gross margin declined 120 basis points (bps) year over year to 38.6%.

SG&A expenses increased 0.5% year over year to $260.4 million. As a percentage of net sales, this metric increased 240 bps year over year to 26.3%.

Adjusted EBITDA declined 28.4% year over year to $124.9 million. We note that the adjusted EBITDA margin declined 340 bps year over year to 12.6% in the quarter under review.

GIII’s Financial Snapshot: Cash, Debt & Equity Overview

G-III Apparel ended the fiscal third quarter with cash and cash equivalents of $184.1 million and total debt of $10.6 million. Total stockholders’ equity was $1.79 billion. Inventory increased 3% year over year to $547.1 million at the end of the quarter.

The company repurchased 209,851 shares for $5.4 million in the fiscal third quarter.

G-III Apparel’s FY26 Guidance

The company has revised its fiscal 2026 guidance to reflect a strong third???quarter performance, while maintaining a measured perspective on current consumer trends and the anticipated impact of tariffs on revenues and profitability. The projected gross tariff impact is now $135 million, with a portion mitigated through vendor support, shifts in sourcing strategies, and selective pricing actions. The remaining unmitigated effect included in the fiscal 2026 outlook is estimated at $65 million.

For fiscal 2026, net sales are anticipated to be $2.98 billion compared with the previously mentioned $3.02 billion, whereas it reported $3.18 billion in fiscal 2025. Net income is projected between $121 million and $126 million, up from the prior stated $112-$122 million. 

Earnings per share are forecast between $2.72 and $2.82 compared with the earlier mentioned $2.53-$2.73, and lower than fiscal 2025 earnings per share of $4.20 on net income of $193.6 million.

Adjusted net income for fiscal 2026 is expected between $125 million and $130 million compared with the previously stated $113-$123 million. This equates to adjusted earnings per share of $2.80-$2.90 versus the earlier mentioned $2.55 to $2.75, and suggests declines from adjusted net income of $203.6 million and adjusted earnings per share of $4.42 reported in fiscal 2025.

Adjusted EBITDA for fiscal 2026 is expected between $208 million and $213 million compared with the prior mentioned $198-$208 million, whereas the company registered $325.9 million in fiscal 2025.

GIII Stock's Past 3-Month Performance

Shares of this Zacks Rank #3 (Hold) company have gained 11.1% in the past three months against the industry’s 1.1% decline.

Key Picks

We have highlighted three better-ranked stocks, namely, FIGS Inc. FIGS, Boot Barn Holdings, Inc. BOOT and Allbirds Inc. BIRD.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. 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 FIGS’ current financial-year earnings and sales indicates growth of 450% and 7%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank of 2 (Buy). 

The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.

Allbirds is a lifestyle brand with naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for Allbirds’ current financial-year sales and earnings indicates a decline of 15.1% and growth of 19.9%, respectively, from the year-ago actuals. BIRD delivered a trailing four-quarter average earnings surprise of 18.5%.

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This article originally published on Zacks Investment Research (zacks.com).

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