DKNY parent G-III Apparel Group Ltd. (NASDAQ:GIII) stock rose Friday after the apparel company reported first-quarter results that topped Wall Street estimates and raised its fiscal 2027 earnings outlook.

The stock surged nearly 7%, as high short interest—exceeding 21% of the float—likely acted as a catalyst, amplifying buying pressure and accelerating the rally.

The company has a short float of 6.14 million shares, representing 21.64% of its publicly traded float, indicating a relatively high level of short interest among investors betting against the stock.

G-III Apparel First-Quarter Results Beat Expectations

The company reported an adjusted loss of 21 cents per share, beating analysts’ expectations for a loss of 30 cents per share. Revenue totaled $535.96 million, ahead of the consensus estimate of $529.92 million.

Sales declined 8% from a year earlier but exceeded the company’s guidance of about $530 million. The decline primarily reflected G-III’s planned exit from the Calvin Klein and Tommy Hilfiger businesses, which previously generated roughly $470 million in annual revenue.

Adjusted gross margin expanded 350 basis points year over year to 45.7%. The improvement was driven by higher full-price selling, a greater mix of higher-margin owned brands, disciplined inventory management and actions taken to mitigate tariff-related costs.

Executive Commentary

G-III Apparel Group Chairman and CEO Morris Goldfarb said the company remains financially strong, ending the first quarter with $394 million in cash and inventory down 8% year over year.

While geopolitical tensions in the Middle East and broader economic uncertainty continue to weigh on consumer sentiment, the company exceeded its first-quarter expectations and raised its fiscal 2027 outlook as its brands continued gaining market share.

Goldfarb said consumer demand for apparel has remained resilient despite higher fuel costs and ongoing global uncertainty. He noted that shoppers are becoming more selective but overall spending trends remain healthy, particularly in North America, where sell-through rates have not yet raised significant concerns.

Europe, however, has shown more cautious consumer behavior. He added that G-III has limited exposure to the Middle East, and the region’s conflicts have not had a material impact on the company’s business.

Owned Brands And Digital Business Gain Momentum

G-III’s owned brands continued to post strong growth. Donna Karan revenue increased about 40%, supported by roughly 60% growth in digital sales. DKNY delivered double-digit direct-to-consumer growth and more than 40% growth in e-commerce sales.

Karl Lagerfeld also expanded in North America and recorded improving digital performance.

Direct-to-consumer revenue increased about 40% year over year, while wholesale digital sales also exceeded company expectations.

The company highlighted its planned acquisition of Marc Jacobs in partnership with WHP Global as a key strategic initiative. G-III expects to invest approximately $500 million in the transaction, funded through cash and available credit facilities. Management estimates the brand could generate about $1 billion in annual revenue over time.

G-III Apparel Raises Fiscal 2027 EPS Outlook

Following the stronger-than-expected quarter, G-III raised its fiscal 2027 adjusted earnings outlook to a range of $2.15 to $2.25 per share from its prior forecast of $2.00 to $2.10 per share. The updated guidance is above the analyst consensus estimate of $2.08 per share.

The company maintained its fiscal 2027 revenue forecast of approximately $2.71 billion, compared with Wall Street expectations of $2.711 billion. The outlook implies an approximately 8% year-over-year decline, largely due to the loss of revenue from the PVH licenses.

G-III said its go-forward business is expected to grow at a high-single-digit rate during the year as it continues shifting toward higher-margin owned brands.

The company now expects fiscal 2027 gross margin expansion of about 400 basis points, up from its previous forecast of about 300 basis points.

For the second quarter, G-III projected adjusted earnings of 15 cents to 25 cents per share, compared with analysts’ expectations of 18 cents per share. Revenue is expected to reach about $570 million, above the consensus estimate of $555.23 million.

GIII Price Action: G-III Apparel Group shares were up 6.79% at $34.21 at the time of publication on Friday. The stock is trading near its 52-week high of $34.83, according to Benzinga Pro data.

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