Financial Analysis: Birkenstock (NYSE:BIRK) versus G-III Apparel Group (NASDAQ:GIII)

G-III Apparel Group (NASDAQ:GIII) and Birkenstock (NYSE:BIRK) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Risk & Volatility

G-III Apparel Group has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Birkenstock has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Institutional & Insider Ownership

92.1% of G-III Apparel Group shares are held by institutional investors. Comparatively, 19.9% of Birkenstock shares are held by institutional investors. 15.0% of G-III Apparel Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares G-III Apparel Group and Birkenstock”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
G-III Apparel Group	$2.96 billion	0.44	$67.35 million	$3.04	9.99
Birkenstock	$2.32 billion	2.56	$385.46 million	$2.13	15.68

Birkenstock has lower revenue, but higher earnings than G-III Apparel Group. G-III Apparel Group is trading at a lower price-to-earnings ratio than Birkenstock, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for G-III Apparel Group and Birkenstock, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
G-III Apparel Group	0	4	2	0	2.33
Birkenstock	1	5	13	0	2.63

G-III Apparel Group presently has a consensus target price of $34.75, suggesting a potential upside of 14.46%. Birkenstock has a consensus target price of $51.91, suggesting a potential upside of 55.43%. Given Birkenstock’s stronger consensus rating and higher possible upside, analysts plainly believe Birkenstock is more favorable than G-III Apparel Group.

Profitability

This table compares G-III Apparel Group and Birkenstock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
G-III Apparel Group	4.75%	5.53%	3.71%
Birkenstock	14.82%	13.36%	7.21%

Summary

Birkenstock beats G-III Apparel Group on 10 of the 14 factors compared between the two stocks.

About G-III Apparel Group

G-III Apparel Group, Ltd. designs, sources, and markets women's and men's apparel in the United States and internationally. The company operates through two segments, Wholesale Operations and Retail Operations. Its products include outerwear, dresses, sportswear, swimwear, women's suits, and women's performance wear; and women's handbags, footwear, small leather goods, cold weather accessories, and luggage. The company markets apparel and other products under the proprietary brands, including DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather, Sonia Rykiel, and G-III Sports by Carl Banks; and licensed brands, such as Calvin Klein, Tommy Hilfiger, Levi's, Guess?, Kenneth Cole, Cole Haan, Vince Camuto, Margaritaville, and Dockers. It has licenses with the National Football League, National Basketball Association, Major League Baseball, and National Hockey League, as well as approximately 150 U.S. colleges and universities. The company offers its products to department, specialty, and mass merchant retail stores. It also sells its products online. G-III Apparel Group, Ltd. was founded in 1956 and is based in New York, New York.

About Birkenstock

Birkenstock Holding plc manufactures and sells footwear products. It also offers sandals, shoes, closed-toe silhouettes, skincare products, and accessories. The company sells its products through e-commerce sites and a network of owned retail stores, as well as business-to-business channels. It operates in the United States, Brazil, Canada, Mexico, Europe, APMA, and internationally. Birkenstock Holding plc was founded in 1774 and is based in London, the United Kingdom. Birkenstock Holding plc is a subsidiary of BK LC Lux MidCo S.à r.l.