G-III Apparel: Telsey Advisory raises PT to $27, maintains Market Perform rating.

G-III Apparel: Telsey Advisory raises PT to $27, maintains Market Perform rating.

G-III Apparel (GIII) has received an upgrade in its price target by Telsey Advisory, with the firm raising its target to $27 from $26. Despite this increase, Telsey Advisory has maintained its Market Perform rating for the company. The upgrade comes amid G-III's strong second-quarter performance, which saw revenue growth driven by the company's core brands, including Calvin Klein and Tommy Hilfiger. However, the firm noted that the increase in tariffs has had an overall net negative impact on earnings, with an unmitigated impact of $70 million on EBIT [1].

In the second quarter, G-III reported a 4% increase in revenue, with Tommy Hilfiger and Calvin Klein both contributing to this growth. The Americas region delivered 11% revenue growth, while EMEA and APAC saw growth of 3% and 1% respectively, although the latter was negatively impacted by currency fluctuations [1]. The company's gross margin fell by 240 basis points to 57.7%, primarily due to higher promotions, shipment mix, and Calvin Klein shipment delays, as well as the early effect of tariffs and North America license transitions [1].

Telsey Advisory cited G-III's strong operational performance and its ability to mitigate tariff impacts as key reasons for the price target increase. The firm also highlighted the company's focus on product innovation and marketing initiatives, which have driven growth in its core brands. However, Telsey Advisory remains cautious about the potential impact of ongoing tariff headwinds and the company's reliance on international diversity to offset these impacts [1].

The upgrade in the price target comes as G-III has reaffirmed its full-year non-GAAP guidance for revenue, margin, and EPS, despite absorbing an increased $70 million EBIT headwind from higher U.S. tariffs. The company expects to fully mitigate these impacts over time and has stepped up its marketing investment in the second half of the fiscal year to amplify brand campaigns through high-impact activations and global talent [1].

In conclusion, while G-III has received a positive upgrade in its price target from Telsey Advisory, the firm remains cautious about the potential impact of ongoing tariffs and the company's reliance on international diversity. The upgrade reflects the company's strong operational performance and its ability to mitigate tariff impacts, but investors should remain vigilant about the risks associated with the current macroeconomic environment.

References:
[1] https://www.fool.com/earnings/call-transcripts/2025/08/27/pvh-pvh-q2-2025-earnings-call-transcript/