G III APPAREL GROUP LTD /DE/ (GIII): what the price assumes

boothcheck covers G III APPAREL GROUP LTD /DE/ (GIII) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-07-26.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/GIII

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 9.6% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: n/a

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.2%); the inversion above states its own rate.

Per-Model Detail (n=18)

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• The Calvin Klein and Tommy Hilfiger licensed business that used to define this company is winding down: sales of those products fell 285.8 million dollars in the year to January 2026, and licensed wholesale slipped again to 163.0 million from 199.1 million in the quarter ended April 30.
• Owned brands have taken up the slack, reaching approximately 57% of our net sales in fiscal 2026, 52% of our net sales in fiscal 2025 and 47% the year before that.
• A one-off tariff recovery of 102.7 million dollars sits inside the 85.2 million of operating profit reported for the quarter ended April 30, so any trailing profit figure for this company currently describes a refund as much as a business.

Bull Case

Three of the four families of valuation method land above where this stock trades, and the one that does not is the one that measures book value rather than what the business earns. Peer multiples sit furthest above. The earnings-power approaches, which capitalise what the company makes today and assume no growth at all, land above it too. Even the discounted cash flow methods reach the price while being fed a negative revenue growth rate. When methods that disagree about almost everything else agree that the price is low, the interesting question is what they are all missing, and here the answer is unusually specific.

They are missing the licence. For years the company's largest business was making and selling Calvin Klein and Tommy Hilfiger product under agreements with the brand owner, and those agreements are expiring. The annual report is direct about the size of it: net sales of Calvin Klein and Tommy Hilfiger licensed product fell by 285.8 million dollars in the year to January 2026. That is the reason the shares look statistically cheap, and it is a known, dated, disclosed decline rather than an unpriced surprise.

What the methods are also missing is what replaced it. The 10-K states that Our owned brands include DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Eliza J, Jessica Howard, Andrew Marc, G.H. Bass, Wilsons Leather and Sonia Rykiel, and that those brands went from roughly 47% of net sales two years ago to 57% in the year just ended. In the quarter ended April 30 that shift showed up in the mix: proprietary wholesale sales of 351.8 million dollars against 363.6 million a year earlier, a decline of about 3%, while the licensed line fell nearly a fifth. Retail sales of owned brands actually grew, to 40.6 million from 36.4 million. An owned brand keeps its margin when a licence does not get renewed.

Owning the brand also changes the economics of a good quarter. Wholesale gross margin reached 63.8% in the quarter ended April 30 against 40.4% a year earlier. A tariff recovery accounts for most of that jump, and the company reports that the underlying figure improved as well. The mix effect is real and mechanical: licensed product carries a royalty payment to somebody else, owned product does not.

The balance sheet gives management the room to keep going. Borrowings are trivial, liquid holdings run near 394 million dollars, and interest and financing charges produced net income of 1.2 million in the quarter rather than an expense. Then there is the use they have put it to. On May 14, 2026 the company agreed to acquire the Marc Jacobs operating business from LVMH alongside WHP Global, funding roughly 500 million dollars from its own resources and its revolving facility, and taking an exclusive licence to the brand in the United States, Canada, Mexico and Western Europe. That is the strategy stated in a transaction rather than a slide: swap licensed volume it does not control for brands it does.

Capital return has started too, with a quarterly dividend of ten cents a share declared on May 27, 2026, and the diluted share count down to 44.4 million from 45.4 million over the year. Neither is large. Both are new behaviour from a company that spent a decade reinvesting everything.

Bear Case

The moat was somebody else's trademark, and it is being taken back. G-III built its scale as the licensee of Calvin Klein and Tommy Hilfiger, manufacturing and distributing product it never owned, under agreements that had to be renewed. Those agreements are running off. Sales of that product fell 285.8 million dollars in the year to January 2026, and in the quarter ended April 30 the licensed wholesale line dropped to 163.0 million from 199.1 million, a decline near a fifth in a single year. There is no version of this where negotiation, execution or brand-building slows it down. The counterparty decided.

What the erosion has already done to profit is the part the headline numbers hide. Operating profit for the year to January 2026 was 108.0 million dollars against 293.1 million the year before and 283.3 million the year before that. Roughly two thirds of the operating profit disappeared in a single year, and 48.6 million dollars of asset impairments sat inside the decline, against 8.2 million in the prior year. Impairments are the accountants agreeing that something the company paid for is worth less than they thought.

The most recent quarter looks like a recovery and largely is not. Operating profit of 85.2 million dollars for the quarter ended April 30 compares with 8.5 million a year earlier, but the filing attributes 102.7 million of benefit inside cost of goods sold to the expected recovery of previously incurred IEEPA tariffs on inventory sold in the prior year, with a 139.5 million dollar receivable recorded for it. Strip that out and the operating result for the quarter is negative. Any twelve-month profit figure for this company right now is dominated by a customs refund, and refunds do not repeat.

Against the peer set, the underlying profitability is the weakest part of the story rather than the strongest. LEVI converts revenue at a roughly 10.6% operating margin, ANF at 13.0%, URBN at 9.8%, GAP at 8.4%. G-III's 108.0 million dollars of operating profit for the year came on net sales near 2.9 billion. Owning the brand improves gross margin; it has not yet improved what reaches the operating line, because owned brands require the marketing, design and distribution spending that a licensor used to underwrite.

Which makes the Marc Jacobs transaction the largest open risk on the page. The company will commit roughly 500 million dollars from cash on hand and its revolving credit facility, and the filing itself lists among its risks the possibility that the acquisition does not close, the ability to transition the business and realise the benefits on time, and the fact that operating the business depends on a license agreement that is terminable under certain circumstances. That last clause deserves a slow read. The company whose central problem is that a licence was withdrawn is spending most of its spare capital to acquire an operating business it will run under a licence.

Where that leaves the price is not a valuation argument at all. Three families of method land above today's level, so the shares are not expensive on any conventional read. The bear case is that the conventional read is being taken on a profit base inflated by a one-time tariff recovery, on a revenue base that is still shrinking as licences expire, and ahead of a half-billion-dollar acquisition whose economics nobody outside the company can yet check.

Valuation

Which operating profit you use decides whether this company looks cheap or ordinary, and the gap between the two answers is wide enough to matter. For the year to January 2026 the company reported operating profit of 108.0 million dollars. For the quarter ended April 30, 2026 it reported 85.2 million, of which 102.7 million was a benefit inside cost of goods sold from an expected tariff recovery. Enterprise value sits near 1.38 billion dollars. Divide by the first figure and the business trades in the low teens of operating profit. Divide by a trailing figure that includes the refund and it trades at half that. Only one of those two is a description of the business.

The embedded assumption in the price is undemanding either way. Today's level sits below what a business shrinking its operating profit by roughly 5% a year would warrant, which is a low bar for a company whose largest revenue line is contractually going away but whose replacement is already 57% of sales. The market is not asking for a turnaround. It is asking whether the decline stops.

The methods themselves mostly say the price is low. Peer-multiple approaches land furthest above it, the earnings-power approaches next, and the discounted cash flow methods land near it despite being run on a negative revenue growth input. The asset-value approaches are the exception and land below, because they measure return on a book value of about 41 dollars a share against a return on equity in the high single digits. That split is the whole picture in miniature: the company earns too little on its book to satisfy the asset methods, and sells for too little against its profits to satisfy the earnings methods.

Cohort position sharpens it. LEVI runs an operating margin near 10.6% on 6.6 billion dollars of revenue, ANF near 13.0%, URBN near 9.8%. G-III's operating profit for the year came to 108.0 million on net sales near 2.9 billion, which places it at the bottom of that group. The peer-multiple methods that make this stock look inexpensive are applying sector-average multiples to a company with below-sector profitability, and that is a large part of why they read the way they do.

The balance sheet is the reason the situation is survivable and also the reason it is about to change. Liquid holdings of roughly 394 million dollars sit against borrowings of about 16 million; measured that way there is roughly 379 million dollars of surplus, and counting capitalised lease obligations as borrowings it is nearer 100 million. Most of that surplus is now committed: the Marc Jacobs investment of roughly 500 million dollars will be funded from those resources and the revolving facility. A buyer at today's level is underwriting a company with a shrinking licensed business, a growing owned-brand business, one large acquisition in flight, and a profit figure that will not be readable cleanly until the tariff recovery is out of the comparison.

Catalysts

The largest dated event is a transaction. On May 14, 2026 the company entered into definitive agreements to acquire the Marc Jacobs operating business from LVMH, with WHP Global taking the trademarks through a jointly formed vehicle; press reporting put the total at 850 million dollars for the brand, of which G-III commits roughly 500 million for the operating side. Closing and the transition of the business are the milestones to watch, and the filing flags both the risk that the deal does not close and the risk of a slow handover.

Second quarter results for fiscal 2027 are scheduled for September 3, 2026. The number that matters is not the headline. It is what the licensed wholesale line does against the 163.0 million dollars it printed in the quarter ended April 30, and whether owned brands can hold their own base while the licences roll off. Gross margin will also need reading carefully, because the tariff recovery that lifted the last quarter is a comparison problem for several reporting periods to come.

Capital policy has quietly changed. On May 27, 2026 the board declared a quarterly cash dividend of ten cents a share, the first regular payout from a business that has historically retained everything. It is a small sum against the company's cash generation and a large signal about how management now sees the growth runway: enough to fund an acquisition and still return something, which is not how a company behaves when it thinks every dollar has a better use inside.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• LEVI (LEVI STRAUSS & CO)
• FY2025 10-K: …supply chain. Logistics . During fiscal year 2024 and as part of Project Fuel, the Company changed its distribution strategy from an owned and operated model to a mix of owned and third-party operated distribution centers used to warehouse and ship products to our wholesale customers, retail stores and e-commerce…
• FY2025 10-K: …or non-compliance can raise reputational challenges with our consumers and other stakeholders for various reasons, including the inability to sufficiently verify the origins for the material used in the products we sell. The global apparel industry is subject to intense competition and cost and pricing pressure. The…
• COLM (COLUMBIA SPORTSWEAR COMPANY)
• FY2025 10-K: …("EMEA"), and Canada. The following tables disaggregate the Company's reportable segment Net sales by product category and channel, which the Company believes provides a meaningful depiction of how the nature, timing and uncertainty of Net sales are affected by economic factors: Year Ended December 31, 2025 (in…
• FY2025 10-K: , especially during periods of heightened economic uncertainty in our key markets. • Highly Competitive Markets. In each of our geographic markets, we face significant competition from global and regional branded apparel, footwear, accessories, and equipment companies. More recently this competition has extended to…
• CRI (Carter's, Inc.)
• FY2025 10-K: …comfort and fit, quality, pricing, style, selection, convenience, and breadth of distribution. Both national brand and private label manufacturers, as well as specialty apparel brands and retailers, aggressively compete in the baby and young children's apparel market. Our primary competitors include (in alphabetical…
• FY2025 10-K: …recruiting costs, and other related costs. Amounts are reflected within Selling, general, and administrative expenses in our consolidated statement of operations. (4) Related to a non-cash impairment charge on the OshKosh indefinite-lived tradename asset in fiscal 2024. U.S. Retail U.S. Retail segment net sales…
• GAP (GAP, INC)
• FY2025 10-K: …preferences and practices, including the increasing shift to digital brand engagement, social media communication, and digital shopping; • developing innovative, high-quality products in sizes, colors, and styles that appeal to customers of varying demographics and tastes; • purchasing and stocking merchandise to…
• FY2025 10-K: …transactions and demand for our merchandise are influenced by our marketing efforts. We use various marketing channels to drive customer awareness and consideration of and interest in shopping our brands with the aim of increasing sales, and we are increasingly using digital advertising to drive sales and traffic to…
• AEO (American Eagle Outfitters, Inc.)
• FY2025 10-K: …of climate change, the availability of import quotas, transportation disruptions and foreign currency exchange rate fluctuations, could adversely affect our business and cause our results of operations to fluctuate. We operate in a highly competitive industry, and we face significant pricing pressures from existing…
• FY2025 10-K: …a sufficient number of qualified senior managers and other key personnel. We must also attract, develop, and retain a sufficient number of qualified field and distribution center personnel. Competition for talent is intense and the turnover rate in the retail industry is generally high, and we cannot be sure that we…
• ANF (Abercrombie & Fitch Co.)
• FY2025 10-K: …its competition through product, providing high quality and newness; brand voice, amplifying and consolidating brand messaging; and experience, investing in immersive, participatory omnichannel shopping environments. Operating in a highly competitive industry environment can cause the Company to engage in greater…
• FY2025 10-K: …in competition from established companies. These increases in competition could reduce our ability to retain and grow sales, resulting in an adverse impact to our operating results and business. We face a variety of challenges in the highly competitive and constantly evolving retail industry, including: •…
• URBN (Urban Outfitters, Inc.)
• FY2025 10-K: …in highly competitive domestic and international markets. Our Retail segment competes on the basis of, among other things, the location of our stores, website, mobile application and catalog presentation, website and mobile application design and functionality, the breadth, quality, style, price and availability of…
• FY2025 10-K: …Our Retail segment utilizes point-of-sale register systems connected by a secure data network to our home offices. Additionally, our stores have mobile point-of-sale devices that have virtually the same functionality as our cash registers. These systems provide for register efficiencies, timely customer checkout and…
• UAA (UNDER ARMOUR, INC.)
• FY2025 10-K: …of operations. We operate in highly competitive markets and the size and resources of some of our competitors may allow them to compete more effectively than we can, resulting in a loss of our market share and a decrease in our net revenues and gross profit. The market for performance apparel, footwear and…
• FY2025 10-K: …in innovations around sustainability; and greater economies of scale. In addition, some of our competitors have long-term relationships with our key retail customers that are potentially more important to those customers because of the significantly larger volume and product mix that our competitors sell to them. As…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.