Iconix Brand Group posted fourth-quarter results that beat Wall Street’s earnings per share estimates by 28 cents and revenues by $2.7 million.
For the three months ended Dec. 31, the company reported a net loss of $297.5 million, or $5.30 cents a diluted share, compared with a net loss of $263.0 million, or $5.44, a year ago. On an adjusted basis, the company posted net income of $22 million, or diluted EPS of 38 cents. Licensing revenue fell 7.9 percent to $87.1 million from $94.7 million, reflecting in part the sale of the Badgley Mischka brand earlier in 2016.
Wall Street was expecting EPS of 10 cents and revenues of $84.4 million.
By business segment, the company said women’s licensing revenue fell 16.8 percent to $18.8 million, while men’s fell 10 percent to $11.8 million. The balance of licensing revenues was from the home, entertainment and international businesses.
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The company also said it recognized a $7.3 million gain in connection with the recoupment and final settlement of unearned incentive compensation from the firm’s former chief executive officer, Neil Cole, in connection with previously announced financial restatements. Cole stepped down from his ceo post in August 2015.
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John Haugh, the current ceo, said that “2016 was a year of transition for Iconix. Our operating performance was in-line with our guidance. I believe the changes we have made over the past year provide a strong foundation to drive long-term growth and shareholder value.”
Last year, the company hired new talent to add to and augment its team, and undertook an in-depth analysis of its brands, partners and the marketplace to develop a long-term strategic plan to drive growth. The company also has retired over $300 million of debt since the beginning of 2016.
When Iconix held its investor day in November, Haugh said the firm has 32 brands under its umbrella, which collectively do $13 billion in global retail volume. He told analysts then that the company remains active in the mergers and acquisitions game, both as buyer and seller. In December, the company said it sold the rights to the Sharper Image for $100 million to ThreeSixty Group. Some brands under the group’s umbrella include Candie’s, London Fog, Mossimo, Rocawear, Lee Cooper, Umbro and Danskin. It also owns an interest in Material Girl, Peanuts and Nick Graham, among others.
Iconix said Wednesday that it would recognize a non-cash impairment charge in connection with certain of the firm’s trademarks and goodwill. It estimated the charge to be $443 million. The company also said a significant portion of the trademark impairment was driven by its “continuing depressed market capitalization.”
Iconix expects 2017 GAAP EPS to be 43 cents to 58 cents on revenues of $350 million to $365 million.
Shares of Iconix fell 0.3 percent to close at $9.18 in Nasdaq trading. The company released its earnings results after the markets closed.