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

The current priced-in claim for G III APPAREL GROUP LTD /DE/ (GIII) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/GIII

Headline

FieldValue
TickerGIII
CompanyG III APPAREL GROUP LTD /DE/
Current price$34.39/sh

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed2.1%
Operating margin today8.2%
Margin compression implied-6.1pp
Multiple paid6x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration 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 10% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
vs own history-0.24σ
implied end-window share0%

Valuation X-Ray

The price is supported by 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.

FamilyMedian price/FVModelsReads
Asset1.31x5expensive
Earnings0.79x5justifies
Relative0.49x5justifies
Growth0.89x3justifies

Families that justify the price: Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=18)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$38.450.89xyesFCF base $0.2B, growth -8% (input: historical growth), terminal g 0.5%, WACC 8.4%, 5yr projection
DCF Exit MultipleGrowth$39.710.87xyesExit EV/EBITDA: 4.6x / 6.6x / 8.6x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$59.160.58xyesP/E 22x (static sector reference · 2026-04), scenarios: 18.7x / 22.0x / 25.3x (bear / base = reference held flat / bull), EV/EBITDA 11.04x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$30.711.12xyesBV/sh $41.09, ROE (TTM) 6.9%, ke 9.3%
Two-Stage Excess ReturnAsset$26.311.31xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$16.452.09xyesRev $2.9B, growth -8% (input: historical growth; tapered), Terminal P/S: 0.4x / 0.5x / 0.6x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$34.081.01xyesEPS $2.84, growth 1% (input: historical EPS growth), PEG=9.19 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$53.650.64xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.25B × (1−22%) / WACC 8.4% → EPV (no growth)
Residual IncomeAsset$25.681.34xyesBV $41.09 + 5yr PV of (ROE (TTM) 6.9% − Kₑ 9.3%) × BV; BV grows 4.5%/yr
Graham NumberAsset$51.240.67xyes√(22.5 × EPS $2.84 × BVPS $41.09) — Graham's conservative floor
EV/EBITDA RelativeRelative$70.120.49xyesEBITDA $0.21B × sector EV/EBITDA 14.0x
FCF YieldEarnings$43.370.79xyesFCF $167.8M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$36.630.94xyesSBC-adj FCF $0.14B (FCF $0.17B − SBC $0.03B) capitalized at Kₑ
Ben Graham FormulaEarnings$91.640.38xyesEPS $2.84 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$18.901.82xyesBV $41.09 × (ROIC 3.9% / WACC 8.4%)
P/Sales SectorRelative$131.070.26xyesRevenue $2.91B × sector P/S 2.0x
PEG Fair ValueRelative$106.500.32xyesEPS $2.84 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$30.701.12xyesEPS $2.84 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net cash$378.5m
Net debt / NOPAT (after-tax)-2.19x (net cash)
Net debt / operating income (pre-tax)-1.70x (net cash)
Share count CAGR (buyback)-2.5%
Burning cashno

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

Bullet Takeaways

G-III is a mature consumer-cyclical apparel company priced as a value name. At $34.76 the market pays only about 6 times operating income, below what even a 5%-a-year decline in operating profit would warrant. The price is discounting trouble, not growth.

The valuation is asset-supported. Earnings-power, relative-multiple, and growth-DCF lenses all support the price, and several methods land well above it. The balance sheet is net cash, a roughly $379 million cushion.

The live story is the transition away from licensed Calvin Klein and Tommy Hilfiger toward owned brands. Q1 fiscal 2027 sales fell 8% on that lost licensed volume, but Donna Karan, DKNY, and Karl Lagerfeld grew, and management raised full-year EPS guidance. The bet is that the owned-brand pivot offsets the licensing loss.

Bull Case

G-III Apparel is a mature business in a mature, cyclical industry, and that stage is exactly how its numbers should be read: not as a growth stock to project forward, but as an established operator whose price has fallen below what its earnings power justifies. The market pays about 6 times operating income, the kind of multiple reserved for businesses the market expects to decline. Yet G-III earns a 6.4% trailing operating margin, sits on a net cash balance sheet, and is in the middle of a deliberate transformation from licensed brands toward owned ones. For a mature apparel company, the relevant question is not how fast it grows but whether its earnings are durable and whether the price already assumes they are not. Here the price assumes erosion, and the recent results argue the opposite for the part of the business that matters most.

The owned-brand pivot is working where it counts. In the first quarter of fiscal 2027, net sales fell 8% to $536.0 million, but that decline is almost entirely the planned loss of licensed Calvin Klein and Tommy Hilfiger volume, roughly $470 million of sales the company is intentionally walking away from over the year. Underneath that, the owned brands grew strongly: Donna Karan was up 40%, sales on donnakaran.com rose nearly 60%, DKNY's North American direct-to-consumer business posted double-digit comparable store growth, and Karl Lagerfeld and Vilebrequin contributed. GAAP net income jumped to $66.5 million, or $1.50 per diluted share, from $7.8 million a year earlier. The company is trading lower-margin licensed revenue for higher-margin, brand-controlled revenue, and the early data shows the owned portfolio scaling.

Management's actions back the confidence. G-III reiterated full-year fiscal 2027 sales guidance of about $2.71 billion and raised non-GAAP EPS guidance to $2.15 to $2.25, up from $2.00 to $2.10, even while absorbing the licensed-revenue loss. The full-year sales decline of 8% is the cost of the transition, not a sign of structural failure, and management is guiding earnings higher despite it. With a net cash balance sheet of about $379 million, the company has the financial room to invest in its owned brands, repurchase shares, or weather a soft retail cycle. Against the apparel-retail peer set of Urban Outfitters, Gap, Under Armour, Levi, and American Eagle, G-III is the rare name combining a deep-value multiple, a net cash position, and a self-directed shift toward owned brands that already carries momentum. The price treats the licensing loss as the whole story; the owned-brand growth is the part the market is undervaluing.

Bear Case

The variable with the most leverage over G-III is one management cannot fully control: the consumer and the macro backdrop that drives discretionary apparel spending. G-III sells fashion, the most cyclical corner of retail, and its results ride tariffs, import costs, promotional intensity, and household budgets. The price may look cheap at 6 times operating income, but apparel multiples compress in downturns for a reason: inventory becomes markdown risk overnight, wholesale partners cancel orders, and a brand that was hot last season can be dead this one. The current price does not reflect a recession-grade hit to discretionary spending, and a mature, fashion-dependent business is precisely the kind that gets repriced hard when the consumer pulls back. A low multiple is not a floor; in a cyclical it can fall further.

The second problem is the transition risk at the heart of the bull case. G-III is walking away from roughly $470 million of Calvin Klein and Tommy Hilfiger licensed revenue, and the entire thesis depends on owned brands growing fast enough to replace it. Q1 fiscal 2027 sales fell 8% precisely because of this swap, and while Donna Karan and DKNY grew, replacing nearly half a billion dollars of established licensed volume with owned-brand sales is a multi-year execution challenge with real risk of falling short. Owned brands require marketing spend, carry their own fashion risk, and lack the built-in retail shelf space that licensed labels enjoyed. If the owned portfolio does not scale on schedule, the company is left with a shrinking top line and a market that punishes apparel names for declining revenue regardless of the strategic logic.

The third issue is that the value support, while real, is not bulletproof. The earnings-power and relative-multiple methods support the price today, but those rest on current margins holding, and apparel margins are fragile. The non-GAAP loss of $0.21 per share in the seasonally weak first quarter is a reminder that the business is not uniformly profitable through the year. Tariffs and input-cost inflation pressure gross margin, and a promotional retail environment can erase pricing power quickly. The net cash balance sheet is a genuine cushion, but it does not insulate the income statement from a consumer slowdown or a stumble in the brand transition. The bear case is not that G-III is going to zero; it is that a cheap multiple on a cyclical, transition-stage apparel company can stay cheap or get cheaper if the consumer weakens or the owned-brand pivot disappoints, and the price offers little reward for taking that combined risk.

Valuation

The inversion points clearly toward value. At $34.76 (June 27, 2026) the market is paying only about 6 times company-wide operating income, a multiple so low the price sits below what even a 5%-a-year decline in operating profit would warrant. This is a bound, not a precise solve: rather than implying a growth rate, the price is consistent with the market expecting earnings to fall. The priced-in assumption reads as within range, and the near-term pace is within what the company has recently delivered, so the market is pricing pessimism, not optimism.

The model X-ray supports the value read. This is a below-floor, asset-supported name where no family flags the price as expensive. Earnings-power frames land at or above the price (earnings-power value near $54, FCF yield near $43). Relative-multiple methods land well above it (relative valuation near $59, EV/EBITDA relative near $70, P/sales sector near $131). The growth-DCF frames land near or above the quote (DCF perpetual growth near $38, DCF exit multiple near $40). Even the asset-based methods bracket the price (two-stage excess return near $26, simple excess return near $31, ROIC-justified book near $19). The blended cross-method anchor sits near $36, just above the quote. The pattern, multiple independent methods clustering at or above the price, is the signature of a value name rather than a growth bet.

The balance sheet reinforces the case rather than complicating it. G-III holds net cash of about $379 million against roughly $185 million of trailing operating income, so there is no leverage risk and ample flexibility to fund the brand transition or return capital. The Q1 fiscal 2027 results, an 8% sales decline driven by the planned licensed-revenue exit but with strong owned-brand growth and raised full-year EPS guidance, are real and central to the forward view. The reasonable conclusion is that G-III is a financially sound, mature apparel company trading at a decline-implying multiple while actively reshaping its revenue mix toward owned brands. The value is real; the catch is that realizing it depends on the consumer holding up and the brand pivot delivering. You are paid a cheap price to take that execution-and-cycle risk.

Catalysts

The Q1 fiscal 2027 report on June 8 (quarter ended April 30, 2026) was the most recent catalyst and beat expectations. Net sales of $536.0 million were down 8% year over year but ahead of the roughly $530 million guide. GAAP net income was $66.5 million, or $1.50 per diluted share, up sharply from $0.17 a year earlier, while the seasonally weak quarter produced a non-GAAP loss of $0.21 per share, better than guidance. The stock rose on the print. (Sources: StockTitan Q1 FY2027 release; The Motley Fool transcript; Investing.com earnings call.)

The brand transition is the dominant forward catalyst. Owned brands led the quarter, with Donna Karan up 40%, donnakaran.com up nearly 60%, and DKNY North American direct-to-consumer posting double-digit comparable growth. Management reiterated full-year fiscal 2027 sales guidance of about $2.71 billion (down 8%, reflecting roughly $470 million of lost Calvin Klein and Tommy Hilfiger volume) and raised non-GAAP EPS guidance to $2.15 to $2.25 from $2.00 to $2.10. The signals to watch are the pace of owned-brand growth, especially Donna Karan and DKNY, gross-margin trends as the mix shifts toward owned labels, and any tariff or consumer-demand pressure on discretionary apparel. Because the price is set for decline, evidence that owned brands are replacing the licensed revenue faster than expected would be the clearest upside catalyst. (Sources: StockTitan; Value The Markets; The Motley Fool transcript.)

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

Methodology Note

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.

View the full interactive GIII report on boothcheck