Iconix Brand Group Inc. Tuesday credited its direct-to-retail partnerships for a second-quarter profit gain and raised its full-year revenue forecast.
This story first appeared in the August 5, 2009 issue of WWD. Subscribe Today.
For the three months ended June 30, the New York-based licensing firm reported a 31.8 percent increase in net income to $19.3 million, or 30 cents a diluted share, from $14.6 million, or 24 cents a share, a year ago.
Excluding one-time items, EPS was 33 cents, 3 cents above the expectations of analysts polled by Yahoo Finance.
Revenues in the quarter rose 9.1 percent to $56.4 million from $51.7 million in 2008.
Chairman and chief executive officer Neil Cole said the company’s exclusive deals for its brands with retailers — such as Starter at Wal-Mart and Candie’s at Kohl’s — accounted for 55 percent of second-quarter revenues. A year ago such arrangements made up 27 percent of revenues.
“What attracts us to the DTR [direct-to-retail] model is the premium support we receive from our partners with respect to placement within the store, placement on circular and newspaper ads and general marketing, as well as a strong credit profile of our partners,” Cole said.
He added he expects the relationships to be a future growth area for Iconix.
For the first half of 2009, the firm’s profits were up 12.2 percent to $34.9 million, or 56 cents a share, from $31.2 million, or 51 cents a share, in the comparable period. Revenues in the six months slid 0.4 percent to $106.9 million from $107.4 million in 2008.
The company raised its revenue guidance for the year to a range of $223 million to $230 million. Iconix had previously expected full-year revenues to be between $218 million and $225 million.
The firm reaffirmed its full-year diluted EPS forecast of between $1.16 and $1.21.
Shares of Iconix Tuesday fell 39 cents, or 2.2 percent, to close at $17.63. Their 52-week range is $5.11 to $18.30.