Iconix Brand Group, Inc.
) started the year on a strong note. Iconix posted first quarter
2013 adjusted earnings of 54 cents per share, surpassing the
Zacks Consensus Estimate of 51 cents by 6% and the year-ago
earnings of 43 cents by 26%. The bottom line was boosted by solid
revenues and the company's brand portfolio, strengthened through
Quarter in Detail
Total revenue in the quarter surged 19% year over year to
$105.1 million. Revenues surpassed the Zacks Consensus Estimate
of $101 million.
On a year-over-year basis, earnings before interest, taxes,
depreciation, and amortization (EBITDA) increased 14.0% to $64.6
million in the first quarter.
Iconix exited the quarter with free cash flow of $51.8 million
compared with $37.9 million at the end of the fourth quarter of
2012. Since Jan 1, 2013, the company has repurchased $210 million
worth of shares at an average share price of $24.07.
Iconix successfully completed three acquisitions in the past
In early-Dec 2012, Iconix acquired the renowned football brand
) in order to further strengthen its brand portfolio with an
iconic brand. With this acquisition, the company now comprises 29
consumer brands in the fashion, athletics, electronics,
entertainment and home industries. Further, these brands are
expected to generate approximately $13 billion in retail sales
globally, with over $2.5 billion attributable to the company's
portfolio of athletic brands.
Later, in early-Feb 2013, Iconix formed a joint venture with
Buffalo International ULC to acquire a 51% interest in the
latter's Buffalo David Bitton brand for $76.5 million in cash.
According to the deal, Buffalo International will be the core
licensee for the joint venture. Iconix will control the joint
venture, manage the brand's operations and expand its retail
footprint in the U.S. and Canada. The brand offers denim,
sportswear, activewear, and accessories that are primarily sold
through 3000 department stores including
) and specialty store locations in over 18 countries around the
world. It also has 30 standalone retail stores, mainly in
In late-Feb 2013, Iconix acquired the renowned lifestyle brand
Lee Cooper for $72 million in cash through the company's
Luxembourg subsidiary, Iconix Luxembourg Holdings Sarl and
strengthened its brand portfolio. Lee Cooper includes multiple
lifestyle categories including men's and women's casual wear,
footwear and accessories. Lee Cooper's portfolio of 35
international licensees is expected to generate approximately $14
million in annual royalty revenues and account for 33% of its
overall business in 2013.
Following the solid first quarter 2013 earnings, Iconix raised
its 2013 adjusted earnings guidance to $2.10-$2.20 per share from
the previously announced range of $2.05-$2.15 per share. The
company had also raised its earnings guidance in the last quarter
to account for the effect of the acquisition of Lee Cooper.
Iconix reaffirmed its revenue guidance in the range of
$425-$435 million. Free cash flow is expected in the range of
$203-$210 million for 2013.
We remain impressed with Iconix's strategic acquisitions and
consistent expansion of licensing agreements. Iconix expects to
explore additional opportunities and enhance its portfolio with
brands. Iconix expects to deliver over 20% revenue and EPS growth
for 2013. Iconix holds a Zacks Rank #1 (Strong Buy).
DILLARDS INC-A (DDS): Free Stock Analysis
ICONIX BRAND GP (ICON): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
NIKE INC-B (NKE): Free Stock Analysis Report
To read this article on Zacks.com click here.