Iconix Brand Group, Inc.
) posted second quarter 2013 adjusted earnings of 72 cents per
share, surpassing the Zacks Consensus Estimate of 56 cents by
28.6% and the year-ago earnings of 45 cents by 60%. The upswing
in earnings can be attributed to solid revenues, strategic
acquisitions and lower share count owing to share buyback.
Quarter in Detail
Total revenue in the quarter surged 23% year over year to
$115.1 million. The solid results were driven by the company's
strong brand portfolio, recent acquisitions and continued focus
on international expansion, which includes the new joint venture
in Canada. Revenues surpassed the Zacks Consensus Estimate of
The formation of this new joint venture in Canada contributed
approximately $9.8 million to current quarter revenues.
Similarly, the last quarter included the formation of the
company's joint venture in India, which contributed approximately
$5.6 million to revenues.
On a year-over-year basis, earnings before interest, taxes,
depreciation, and amortization (EBITDA) increased 24.0% to $72.7
million in the second quarter.
Iconix exited the quarter with free cash flow of $60.8 million
compared with $51.8 million at the end of the first quarter of
In the second quarter, Iconix bought back 5.2 million shares
at an average price of $25.42. The company now has $53 million
remaining under the previous $300 million stock repurchase
program, which was approved by the company's board in Feb
Since initiating the share repurchase program in Oct 2011, the
company has repurchased approximately $447 million of its stock.
During the quarter, Iconix's board authorized a new share
repurchase program to repurchase up to $300 million shares over a
Following the solid second quarter 2013 earnings, Iconix
raised its 2013 adjusted earnings guidance to $2.20-$2.30 per
share from the previously announced range of $2.10-$2.20 per
share. The company has been raising its guidance since the last
two quarters to reflect the ongoing acquisitions of the company.
Moreover, Iconix expects to deliver over 20% revenue and earnings
per share growth for 2013.
Iconix reaffirmed its revenue guidance in the range of
$425-$435 million. Free cash flow is expected in the range of
$203 millon-$210 million for 2013.
Iconix's overall growth story looks compelling. This clothing
brand licensing company has been aggressively acquiring brands
and entering into joint ventures to expand its portfolio, having
added the rest of Ecko and Marc Ecko Cut & Sew under its
banner in May 2013. In late-Feb 2013, Iconix acquired the
renowned lifestyle brand Lee Cooper and earlier in the same
month, formed a joint venture with Buffalo International ULC to
acquire a 51% interest in the latter's Buffalo David Bitton
brand. The acquisition of the renowned football brand Umbro from
) in early-Dec 2012 added an iconic brand to its portfolio.
Iconix holds a Zacks Rank #3 (Hold). Other stocks in the
consumer discretionary sector that are performing well and are
therefore worth considering include
Brown Shoe Co Inc
Rocky Brands Inc
), both of them holding a Zacks Rank #1 (Strong Buy).
BROWN SHOE CO (BWS): Free Stock Analysis
ICONIX BRAND GP (ICON): Free Stock Analysis
NIKE INC-B (NKE): Free Stock Analysis Report
ROCKY BRANDS (RCKY): Free Stock Analysis
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