Shares of Sequential Brands Group Inc. ended the day’s trading session down nearly 1.8 percent after posting first-quarter results.
Karen Murray, Sequential’s chief executive officer, told Wall Street analysts during a conference call, “It’s been a strong start to 2018 as we continue to execute on our strategy to drive organic growth through both existing and new business, manage our expenses and improve our balance sheet.”
Murray also said the company reviews its portfolio on a regular basis and would consider divesting certain assets that are no longer growth drivers. The ceo said the company divested its Revo eyewear brand in the quarter.
For the three months ended Mar. 31, the net loss was $2.3 million, or 4 cents a diluted share, compared with a net loss of $1.2 million, or 2 cents, a year ago. Adjusted net income for the quarter was $3.6 million, or 6 cents a diluted share. Net revenue fell 3.3 percent to $38.1 million from $39.4 million.
The company said during the quarter that it adopted a new revenue recognition standard that was required for all public firms. The new standard requires the company to recognize revenue from its contractual guaranteed minimum royalties on a straight line basis for most of its licensing agreements, with the revenue impact dependent on the terms of each contract.
Murray said also said the company would provide more information on its refinancing efforts during the second quarter.
She also noted that since joining the company a year ago, there’s been changes on the management team, as well as a realignment of internal resources to maximize organic growth initiatives. The companies six core brands — AND1, Avia, Giaim, Martha Stewart, Jessica Simpson and Joe’s — represent 80 percent of the company’s business, Murray said.
Peter Lops, chief financial officer, told Wall Street the company expects full-year 2018 revenue growth in the mid- to high-single-digits. He said that, similar to the first quarter, the second quarter will be impacted by the expiration of certain Martha Stewart legacy licenses. The cfo also added that the company expects “revenue for 2018 to be weighted to the back-half of the year” due mostly to the national seasonality of the company’s businesses.
Shares of Sequential closed at $1.68 in Nasdaq trading.