G-III Apparel Group Sees Valuation Discount Amid Global Fashion Market Growth
As the global fashion market continues to grow, G-III Apparel Group, Ltd. (GIII) has found itself trading at a lower valuation multiple compared to its industry peers and sector averages. The company's forward 12-month price-to-earnings (P/E) ratio of 6.47 is significantly below the Zacks Textile - Apparel industry average of 12.40 and the Consumer Discretionary sector average of 19.36.
This undervalued status presents an attractive opportunity for investors seeking exposure to the fashion sector, as GIII's Value Score of A underscores its appeal as a potential investment. The company's shares have been trading at 24.6% below their 52-week high of $36.18 reached on December 13, 2024, making it a prime candidate for consideration by investors.
G-III Stock Performance Outpaces Industry and Sector
In the past three months, GIII stock has gained 3.4%, outperforming the industry's decline of 12.2% and the S&P 500 index's growth of 0.1%. The company's focus on global expansion and brand building has enabled it to achieve this outperformance, with its omnichannel capabilities and digital infrastructure investments driving growth.
G-III's emphasis on innovation and expansion is evident in its partnerships with major e-commerce platforms such as Amazon and Zalando, which have increased its digital visibility and reach. The company is also embracing AI-driven technologies to streamline operations, improve supply-chain transparency, and enhance digital merchandising.
Strategic Investments Drive Growth
G-III's strategic investments in digital innovation, brand expansion, and international market development are key drivers of the company's long-term growth prospects. The relaunch of Donna Karan has been particularly successful, with strong sell-through rates and high average unit retail prices. By the end of fiscal 2025, the brand was available at more than 1,500 points of sale, with a goal of reaching 1,700 locations by spring 2026.
The company's partnership with ALDO Product Services for G.H.BASS footwear, bags, and small leather goods in North America is another notable example of its strategic investments. This collaboration blends G.H.BASS's classic American heritage with ALDO's strong sourcing and omnichannel capabilities, aiming to expand brand reach and appeal to younger, fashion-forward consumers.
International Expansion Key to Growth
G-III's international expansion remains a central pillar of its broader strategy. The company acquired a 20% stake in All We Wear Group ("AWWG"), a European fashion platform operating in 86 countries. This partnership will drive the expansion of DKNY, Donna Karan, and Karl Lagerfeld in Spain and Portugal while enabling G-III to introduce AWWG's Pepe Jeans and Hackett brands to the North American market.
In Latin America, Karl Lagerfeld opened five stores in fiscal 2025, with six more planned for fiscal 2026. These efforts signal G-III's commitment to long-term global growth and market diversification.
Challenges Ahead
However, the company faces near-term challenges from rising costs and cautious sales guidance, which may pressure profitability and create uncertainty for investors. The fiscal 2026 guidance signals a challenging environment, with net sales projected to decline 1% year over year to $3.14 billion. Adjusted net income is expected between $192 million and $197 million, suggesting a decline from the $203.6 million reported in fiscal 2025.
Adjusted earnings per share (EPS) are forecast at $4.15 to $4.25, whereas it reported $4.42 in the previous year. Adjusted EBITDA is anticipated to decrease year over year to $310-$315 million from $325.9 million. This subdued guidance reflects uncertainty in demand and signals a difficult transition period.
Conclusion
G-III Apparel Group's long-term growth prospects are supported by strategic investments in digital innovation, brand expansion, and international market development. Despite near-term challenges, the company's recent resilience and ability to outperform broader market trends suggest that investors may find value in holding G-III shares as it works to overcome current obstacles and achieve sustainable growth.
The company currently has a Zacks Rank #3 (Hold), indicating a neutral outlook for the stock. Investors seeking exposure to the fashion sector may want to consider other better-ranked stocks, such as Canada Goose Holdings Inc. (GOOS), Stitch Fix, Inc. (SFIX), or Allbirds, Inc. (BIRD).