G-III Apparel's Strategic Transformation Gains Steam With Marc Jacobs

G-III Apparel Group, Ltd. GIII is advancing its strategic transformation following the completion of its acquisition of Marc Jacobs. The transaction deepens the company’s owned-brand portfolio while reducing its reliance on licensed Calvin Klein and Tommy Hilfiger products. It also adds a globally recognized luxury label with meaningful expansion potential across categories, channels and markets.

Marc Jacobs’ operating business is expected to generate $360 million in global sales in fiscal 2027. G-III believes the brand can ultimately generate $1 billion in annual revenues. Handbags, small leather goods and accessories currently account for roughly 90% of revenues, creating considerable whitespace in ready-to-wear, wholesale distribution, international markets and licensing.

The ownership structure offers several value-creation avenues. G-III controls the Marc Jacobs operating company, encompassing retail, wholesale and e-commerce, while holding 50% of the brand’s intellectual property joint venture with WHP Global. Combining G-III’s sourcing expertise and retailer relationships with WHP’s licensing capabilities could broaden distribution and strengthen licensing income over time.

Notably, G-III’s wider portfolio shift is already supporting profitability. Second-quarter fiscal 2027 net sales declined 10% to $554.1 million, largely reflecting planned reductions in Calvin Klein and Tommy Hilfiger sales. Nevertheless, the go-forward portfolio grew at a high-single-digit rate, while the gross margin expanded 440 basis points to 45.2%.

Management maintained fiscal 2027 sales guidance of $2.71 billion and raised the adjusted EPS guidance to $2.20-$2.30, excluding the impacts of Marc Jacobs. The acquisition is expected to be dilutive during the first 12 months of ownership and accretive thereafter. Although execution and license-exit risks remain, G-III’s brand-building record, liquidity and growth playbook provide a solid foundation for expanding Marc Jacobs.

GIII’s Price Performance, Valuation & Estimates

Shares of G-III have risen 4.9% over the past year against the industry’s 7% decline.

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From a valuation standpoint, GIII trades at a forward price-to-sales ratio of 0.43, below the industry’s average of 2.30. It has a Value Score of B. 

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The Zacks Consensus Estimate for G-III’s fiscal 2027 earnings implies a year-over-year decline of 14.2%, whereas the estimate for fiscal 2028 indicates an uptick of 9.8%. Earnings estimates for fiscal 2027 and 2028 have been unchanged over the past 30 days.

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GIII currently carries a Zacks Rank #3 (Hold).

Key Picks

FIGS, Inc. FIGS is an apparel company focused on the healthcare industry. Its offerings include lab coats, jackets, footwear, bags, socks and other accessories used by healthcare professionals. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for FIGS’ current financial year earnings and sales suggests growth of 89.5% and 18.2%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 201.8%.

Boot Barn Holdings, Inc. BOOT is the largest lifestyle retailer in the United States, specializing in western and work-related footwear, apparel and accessories. The company also has a Zacks Rank #2 at present. 

The Zacks Consensus Estimate for Boot Barn’s current fiscal-year earnings and sales suggests growth of 22.6% and 15.7%, respectively, from the year-ago actuals. BOOT delivered a trailing four-quarter average earnings surprise of 11.4%.

Fossil Group, Inc. FOSL is involved in designing, marketing and distributing consumer fashion accessories. It also carries a Zacks Rank #2.

The Zacks Consensus Estimate for Fossil Group’s current fiscal-year earnings suggests growth of 96.7% from the year-ago actuals. FOSL delivered a trailing four-quarter average negative earnings surprise of 236.2%.

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