What Happened?
Shares of fashion conglomerate G-III (NASDAQ:GIII) fell 2.4% in the morning session after investors showed caution ahead of the company's earnings report, scheduled for release the next day. Analysts expected the fashion conglomerate's revenue to decline by 6.9% year over year. This sentiment followed the company's previous quarterly report, where its full-year revenue guidance missed analyst expectations. Furthermore, even after G-III beat earnings per share estimates in the last quarter, its share price dropped significantly the following day, indicating that investors were more focused on the weaker outlook. The combination of expected revenue decline and a history of negative reactions to guidance likely contributed to the stock's fall ahead of the announcement.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy G-III? Access our full analysis report here.
What Is The Market Telling Us
G-III’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 17 days ago when the stock gained 5.5% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
G-III is down 6.4% since the beginning of the year, and at $29.98 per share, it is trading 17% below its 52-week high of $36.10 from December 2024. Investors who bought $1,000 worth of G-III’s shares 5 years ago would now be looking at an investment worth $1,251.
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