What Happened:
Shares of fashion conglomerate G-III (NASDAQ:GIII) jumped 23.8% in the morning session after the company reported second-quarter earnings results. G-III blew past analysts' EBITDA and EPS expectations.
On the other hand, its revenue guidance for the next quarter was underwhelming, and its revenue fell short of Wall Street's estimates. Zooming out, we think this was a mixed quarter featuring some areas of strength but also some blemishes.
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What is the market telling us:
G-III’s shares are somewhat volatile and over the last year have had 10 moves greater than 5%. But moves this big are very rare even for G-III and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago, when the stock dropped 16.2% on the news that the company reported fourth-quarter results, with revenue and EPS missing Wall Street's estimates. Its revenue guidance for the next quarter beat analysts' expectations, but looking at the company's full-year 2024 outlook, its forecasted revenue was in line, while its forecasted EPS fell short. Overall, the results could have been better.
G-III is down 4.9% since the beginning of the year, and at $31.84 per share it is trading 10.1% below its 52-week high of $35.41 from December 2023. Investors who bought $1,000 worth of G-III’s shares 5 years ago would now be looking at an investment worth $1,336.
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