Investors were not pleased with the second-quarter earnings report from Iconix Brand Group.
The company swung to a net loss of $79.4 million, or $1.26 a diluted share, from net income of $43.6 million, or 74 cents, a year ago. On an adjusted basis, net income was $7.7 million, or 12 cents a share. Licensing revenue fell 18.5 percent to $50.2 million from $61.6 million.
Wall Street was expecting adjusted earnings per share of 12 cents on revenues of $54 million.
Investors sent shares of Iconix down 18 percent to close at 50 cents in Wednesday’s trading session.
David Jones, chief financial officer, said, “with a stable balance sheet, we continue to focus on the business and have seen our licensing activity pick up year-over-year. We were pleased to register organic growth in both our men’s and international segments for both the second quarter of 2018 and the first half of 2018.”
The cfo added that the company’s “brands in transition continue to draw a lot of interest and we are working through several promising opportunities.”
While the company has been reviewing its brand portfolio and making progress on retooling its licensing opportunities, there’s also been chatter in the markets that the company is also eyeing a possible sale of certain non-core businesses. Some former fashion and home executives said they have provided an analysis of certain brands to clients who might be interested in them if they were to become available.
Meanwhile, the company in the first six months signed 43 new and replacement license agreements, and renewed 51 license agreements, according to the cfo.
Peter Cuneo, interim chief executive officer and chairman, said, “Iconix delivered financial results in line with our expectations for the second quarter and we do not anticipate any major changes to our full-year projections.”
Cuneo said the highlight of the quarter was the collaboration between its brand Starter and the Alliance of American Football Association. That collaboration has Starter becoming the official on-filed outfitter of all uniforms and sideline apparel for all Alliance teams.
For fiscal 2018, the company said it expects full-year revenue guidance at the lower end of the range between $190 million to $220 million, with a net loss, on a GAAP basis, of between $94.4 million to $104.4 million. The company also reiterated full-year free cash flow guidance of between $50 million to $70 million.
Last month, Iconix reached a cooperation agreement with Sports Direct International, settling a dispute between the two on board constituency.
Iconix’s fashion brands include Danskin, OP, Mossimo, Joe Boxer, Rampage, London Fog, Lee Cooper and Buffalo, to name a few.