G-III Apparel Analysts Slash Their Forecasts After Q1 Results

G-III Apparel Group reported Q1 adjusted EPS of $0.19, exceeding estimates of $0.12, and sales of $583.61 million, also above the $580.37 million consensus, driven by double-digit growth in key owned brands. Despite the positive results, G-III withdrew its FY26 profit guidance due to tariff and macroeconomic uncertainty, anticipating a $135 million tariff impact, and projects Q2 EPS of $0.02-$0.12 on revenue of approximately $570 million, below the $621 million estimate; analysts subsequently lowered price targets on the stock, and shares fell 2.7%.

Analysis

G-III Apparel Group (GIII) reported mixed first-quarter results, with adjusted earnings per share of 19 cents beating the analyst consensus of 12 cents, and quarterly sales of $583.61 million, though down 4% year-over-year, surpassing the Street view of $580.37 million. This performance was driven by double-digit growth in its key owned brands—DKNY, Karl Lagerfeld, and Donna Karan—which largely offset the exit from Calvin Klein's jeans and sportswear businesses. However, significant headwinds led G-III to withdraw its FY26 profit guidance, citing tariff and macroeconomic uncertainty, and anticipating a $135 million unmitigated tariff impact predominantly in the second half. While the company affirmed its FY2026 sales guidance of $3.14 billion, anticipating a weaker first half followed by second-half acceleration, its second-quarter EPS guidance of $0.02–$0.12 and revenue forecast of approximately $570 million fell notably short of the $621 million revenue estimate. Consequently, G-III shares fell 2.7% to $21.90, and analysts adjusted price targets downwards: Telsey Advisory Group maintained Market Perform but lowered its target to $27, Keybanc maintained Overweight with a target reduction to $30, and Barclays maintained an Underweight rating, cutting its target to $18.

Key Decisions for Investors

• Investors should acknowledge the contrast between G-III's Q1 earnings beat and the significant concerns raised by its withdrawn FY26 profit guidance and the anticipated $135 million tariff impact.
• A cautious approach is advisable given the weak Q2 outlook, the substantial tariff headwinds, and the across-the-board reduction in analyst price targets, reflecting increased uncertainty.
• Closely monitor management's execution on mitigating tariff impacts and achieving the projected second-half sales acceleration, as these will be critical determinants for future stock performance.