Iconix Reiterated at Outperform - Analyst Blog
26 November 2013 - 5:00AM
Zacks
On Nov 22, we reiterated our Outperform recommendation on
Iconix Brand Group, Inc (ICON) given its solid
third quarter 2013 results and an enhanced guidance for the
year.
Why the Reiteration?
Iconix reported solid third quarter 2013 results on Oct 30.
Earnings of 59 cents increased 44% from the year-ago earnings,
bolstered by top-line growth, strategic acquisitions and lower
share count owing to buybacks. Earnings also surpassed the Zacks
Consensus Estimate.
Total revenue surged 24% year over year to $107.2 million backed
by the company’s recent acquisitions (Umbro, Buffalo and Lee
Cooper) and continued focus on international expansion, which
includes the new joint venture in Australia. The formation of this
new joint venture in Australia contributed approximately $5 million
to the current quarter’s revenues. Revenues however slightly missed
the Zacks Consensus Estimate.
Following the solid third quarter 2013 result, Iconix raised its
2013 adjusted earnings guidance to $2.30–$2.40 per share from the
previously announced range of $2.20–$2.30 per share. The company
has raised its earnings guidance in all the three quarters of 2013,
which reflects the company’s growth potential. Moreover, Iconix
expects to deliver over 20% revenue and earnings per share growth
for 2013.
After the strong third quarter results and the increase in
guidance, most estimates were revised higher. The Zacks Consensus
Estimate for 2013 went up 1.7% to $2.33 per share. For 2014, the
Zacks Consensus Estimate increased 0.8% to $2.46 per share.
Iconix’s overall growth story looks compelling. This clothing
brand licensing company has been aggressively acquiring brands and
entering into joint ventures to expand its portfolio. Most
recently, the company purchased approximately 14.4% minority
interest in Complex Media, a multi-media lifestyle company and
owner of Complex magazine and its online counterpart, Complex.com
in Sep 2013. In Jul 2013, the company purchased a 10% minority
interest in Marcy Media, which is a multi-media portfolio company.
In May, it added the rest of Ecko and Marc Ecko Cut & Sew under
its banner.
In late Feb 2013, Iconix acquired the renowned lifestyle brand
Lee Cooper and earlier in the same month formed a joint venture
with Buffalo International ULC to acquire a 51% interest in the
latter’s Buffalo David Bitton brand. The acquisition of the
renowned football brand Umbro from Nike, Inc.
(NKE) in Dec 2012 added another iconic brand to its portfolio.
Iconix holds a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other stocks in the consumer discretionary sector worth
considering are Deckers Outdoor Corp (DECK) and
Sequential Brands Group, Inc. (SQBG). Both of them
hold a Zacks Rank #2.
DECKERS OUTDOOR (DECK): Free Stock Analysis Report
ICONIX BRAND GP (ICON): Free Stock Analysis Report
NIKE INC-B (NKE): Free Stock Analysis Report
SEQUENTIAL BRND (SQBG): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
Sequential Brands (NASDAQ:SQBG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sequential Brands (NASDAQ:SQBG)
Historical Stock Chart
From Jul 2023 to Jul 2024