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Iconix: Q3 revenues decline 13 percent, lowers full year outlook

By Prachi Singh

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Business

Iconix Brand Group, Inc. for the third quarter ended September 30, 2018 reported total revenue of 46.2 million dollars, a 13 percent decline as compared to the prior year quarter. For the nine months, total revenue of 145 million dollars, declined 16 percent compared to the nine months period last year.

Commenting on the results, Bob Galvin, Iconix’s CEO said in a statement: "Our results for the quarter were negatively impacted by the Sears bankruptcy filing which resulted in P&L charges, however, we continue to forecast debt covenant compliance. While the domestic business did not see the progress we had hoped for, our international business continued its profitable growth. We are critically evaluating our operational cost structure to ensure it is aligned with our current level of business and near term plans."

Highlights of Iconix’s third quarter financial results

The company said, decline in the third quarter and nine months was expected, principally as a result of the transition of its Danskin, OP and Mossimo DTR's in the women’s segment, men’s segment declined in the third quarter due to the Starter and Buffalo brands.

International segment, however reported organic growth primarily from the Umbro and Lee Cooper brands, specifically in Europe, India and China territories. The Home segment declined 6 percent and 9 percent for the third quarter and nine months, respectively. The company added that adoption of the new revenue standard increased Q3 revenue by approximately 2.4 million dollars and by approximately 0.6 million dollars for the nine months, and is expected to increase full-year revenue by approximately 2.5 to 3 million dollars.

GAAP net loss from continuing operations attributable to Iconix for the third quarter reflects income of 20.2 million dollars as compared to a loss of 550.6 million dollars, while GAAP diluted EPS from continuing operations reflects a loss of 0.01 dollar as compared to a loss of 9.64 dollars for the third quarter of 2017. GAAP net loss from continuing operations attributable to Iconix for the nine months reflects a loss of 31.4 million dollars compared to a loss of 559.7 million dollars for the nine months ended September 30, 2017, while GAAP diluted EPS from continuing operations was a loss of 0.81 dollar compared to a loss of 9.83 dollars last year.

Non-GAAP net income from continuing operations for the third quarter was 1.2 million dollars compared to 13.9 million dollars for the third quarter of 2017, while non-GAAP diluted EPS from continuing operations was 0.02 dollar compared to 0.24 dollar for the third quarter of 2017. Non-GAAP net income from continuing operations for the nine months was 15 million dollars compared to 41.7 million dollars for the nine months ended September 30, 2017, while non-GAAP diluted EPS from continuing operations was 0.23 dollar compared to 0.73 dollar for the nine months ended September 30, 2017.

Iconix lowers 2018 guidance

As a result of the Sears Holdings Corporation bankruptcy filing on October 15, 2018, Iconix is lowering full year guidance and now expects full year revenue to range between 185 million dollars to 195 million dollars, down from 190 million dollars to 220 million dollars.

GAAP net income guidance is lowered to a loss of approximately 105 million dollars to 115 million dollars, from 94.4 million dollars to 104.4 million dollars, full year non-GAAP net income guidance is lowered to 5 million dollars- 15 million dollars, down from 20 million dollars to 30 million dollars.

Picture:Facebook/Candie's

Iconix Brand Group