Xcel Brands Inc.’s profits fell sharply, more than 50 percent, in the third quarter while sales soared double digits to $7.3 million, driven by increases in licensing revenues.
Among its accomplishments in the quarter, Chairman and CEO Robert D’Loren noted, the company completed its public offering, closed the C. Wonder brand acquisition and entered into a licensing agreement with Hudson’s Bay Co.
“We are pleased to report impressive top-line growth driven by strong performance across our core brands and continued progress in international expansion,” said D’Loren in a release. “… We are excited for our collaboration with HBC, which will include developing lines for four of our brands under a fast fashion supply chain planned to launch in 2016 at HBC stores including Lord & Taylor in the United States and The Bay in Canada. Additionally in September, we launched the H by Halston brand on QVC. Thus far the products and results have exceeded our expectations.”
Its popular Isaac Mizrahi brand was one of Xcel’s first offerings on the QVC network.
Xcel’s share price had risen about 4 percent at press time.
Net Income: Profit, for the quarter ended Sept. 30, 2015 declined 55 percent to $30,000 from $66,000 in the comparable quarter.
EPS: Earnings per diluted share were 0 cents compared to diluted EPS of 2 cents in the same year-ago quarter.
Net Revenue: Total revenue increased 36 percent to $7.3 million from $5.4 million in the comparable quarter
Adjustments: Non-GAAP net income for the third quarter was $1.4 million, or non-GAAP diluted EPS of 8 cents, compared to non-GAAP net income of $1.4 million, or non-GAAP diluted EPS of 11 cents, for the prior-year quarter.
Hit, Miss or Beat: Wall Street predicted EPS of 5 cents and revenues of $7.98 million.
Executive Insights: “The success of this launch and our third quarter achievements provide strong evidence of the strength of our business model, our ability to successfully expand our business by investing in design, marketing, and media related to our brands, and our commitment to increasing value for our shareholders.” — D’Loren