Xcel Brands, Inc. XELB posted third-quarter 2019 results, wherein the bottom line lagged the Zacks Consensus Estimate. Meanwhile, sales increased year over year, owing to improved products.
Xcel Brands, Inc Price, Consensus and EPS Surprise
Xcel Brands’ adjusted earnings amounted to 5 cents per share, including stock-based compensation expenses. The Zacks Consensus Estimate for the same for the reported quarter was pegged at 10 cents.
In the reported quarter, net revenues were $10.9 million, up 32% year over year. The upside was backed by solid performance in apparel and jewelry wholesale along with robust e-commerce operations.
Further, gross profit remained flat year over year at $8 million in the quarter, as portions of the business were transformed from licensing to wholesale. Additionally, SG&A expenses advanced 5.9% to $1.4 million in the quarter. Meanwhile, SG&A as a percentage of sales decreased 310 bps to 12.4%.
Adjusted EBITDA declined 21.7% to $1.8 million from $2.3 million reported in the prior-year quarter.
Other Financial Aspects
The company ended the reported quarter with cash and cash equivalents of $5.9 million, long-term debt of $15.9 million, and total stockholders’ deficit of $103.4 million. Further, cash flow from operations amounted to $3 million.
The Zacks Rank #3(Hold) company is on track with the implementation of new technology across different business categories for boosting efficiency. Additionally, it is focusing on product launches and brand development. In fact, the company recently collaborated with Hilco to acquire the rights of the Longaberger brand. The brand is well-known for American heritage home and collectibles.
Management believes that the company is well-positioned for growth in the forthcoming period. Moreover, it anticipates sales growth and better margins for fourth-quarter 2019.
Notably, shares of the company have rallied 39.2% in the past six months against the industry’s decline of 20%.
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Burlington Stores BURL, with a Zacks Rank #2 (Buy), has a long-term growth rate of 15.9%.
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Xcel Brands, Inc (XELB): Free Stock Analysis Report
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