Zacks Investment Research upgraded
Iconix Brand Group, Inc
) to a Zacks Rank #1 (Strong Buy) on Apr 23 driven by a spate of
accretive acquisitions made in the recent past. The company
reported first quarter 2013 results on Apr 24 and raised its view
for 2013, thus supporting the upgrade.
Why the Upgrade?
Iconix successfully completed three acquisitions in the past
five months. In late-Feb 2013, Iconix acquired the renowned
lifestyle brand Lee Cooper, which includes multiple lifestyle
categories including men's and women's casual wear, footwear and
accessories. 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 in order to expand its retail
footprint in the U.S. and Canada. In early-Dec 2012, Iconix
acquired the renowned football brand Umbro from
) in order to further strengthen its portfolio with an iconic
brand that focuses on the fashion, athletics, electronics,
entertainment and home industries.
The successful completion of acquisitions helped the company
deliver another solid performance in the first quarter of 2013.
Iconix's revenues in the quarter surged 19% year over year and
surpassed the Zacks Consensus Estimate by 4%. First quarter
earnings of 54 cents per share also beat last year's result by
26% and the Zacks Consensus Estimate by 5.9%. In fact, Iconix has
topped earnings estimates in nine out of the last twelve
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 earlier raised its earnings guidance in fourth
quarter 2012 to account for the effect of the acquisition of Lee
Estimates have mostly increased after the strong first quarter
results and bright outlook for the year. The Zacks Consensus
Estimate increased 0.5% to $2.14 per share for 2013, while it
grew 5.4% to $2.35 per share for 2014 over the past 7 days.
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
more iconic brands. Iconix expects to deliver over 20% revenue
and EPS growth for 2013.
Other Stocks to Consider
Other stocks that are worth considering are
), both of them carrying a Zacks Rank #2 (Buy).
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