Markets

Consumer Sector Update for 04/02/2015: SQBG,KMX,UACL

Top Consumer Stocks

WMT +0.26%

MCD -0.86%

DIS +0.27%

CVS +0.30%

KO -0.01%

Consumer stocks were broadly higher today with shares of consumer staples companies in the S&P 500 advancing over 0.5% while shares of consumer discretionary firms in the S&P 500 were posting a 0.7% gain.

In company news, Sequential Brands Group Inc. ( SQBG ) rose sharply after signing an agreement to acquire a majority stake in the Jessica Simpson brand, lifting royalty revenue to as much as $90 million during the first 12 months after the deal closes for the apparel retailer.

Financial details of the agreement were not disclosed.

The company said that concurrent with the closing for the Simpson brand stake, Camuto's Group's master license for the brand line will be replaced by new long-term licensing agreement to manufacture and distribution footwear.

The deal is projected to increase royalty revenue across all of SQBG's brand portfolio to $88 million to $90 million over the first year post-closing. The company also now expects between $53.5 million to $55 million in adjusted EBITDA, adding it will offer more financial guidance once the transaction close.

SQBG shares were ahead over 13% at $12.10 apiece, earlier climbing as high as $12.09 a share. The stock has traded within a 52-week range of $6.89 to $14.75 a share, already rising more than 32% over the past 12 months prior to today's rally.

In other sector news,

(+) KMX, (+9.4%) Q4 adjusted earning of $0.65 per share top analyst expectations by $0.05 per share. Revenue grew 14% over year-ago levels to $3.51 billion, edging out Capital IQ consensus by around $10 million.

(-) UACL, (-15.8%) Warns Q1 earnings will trail analyst consenus by at least $0.05 per share. Projected revenue also come up at least $34 million short of $300 million consensus. Also, cut to Hold from Buy at Stifel Nicolaus.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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