Danskin Now, an exclusive brand for Walmart, was called out as one of Iconix Brand Group’s “strongest performers,” across the company’s wide portfolio. On a conference call with analysts, Seth Horowitz, who was recently promoted to Iconix’s EVP and COO, said Danskin Now was helped by increased floor space and expanded assortment at Walmart. But Horowitz also said its two key other sports brands, Umbro and Starter, are also positioned well for growth.
Umbro recently launched a number of new partners, including licensees in Italy, India, Australia and North Africa. This May, Umbro will be unveiling limited edition collections with Urban Outfitters and the Gap on a global basis in connection with the 2014 World Cup and the brand's 90-year anniversary. For the World Cup, the global alliance with the Gap will be complemented by a “launch around country pride” through its 40 licenses around the world. Added Horowitz, “We do anticipate this being a strong year for Umbro and world football, soccer, and believe we can carry that momentum forward.”
Horowitz said the Starter brand relaunched Major League Baseball co-branded jackets in the U.S. With its prior return to the other leagues, the return of the Starter satin jacket is helping Starter regain space at Foot Locker, Dick's Sporting Goods and Sports Authority. He also said Starter’s basic business is performing solidly and “has found its place on the Wal-Mart floor.”
OP (Ocean Pacific), another exclusive at Walmart, saw a “tough” first quarter, but the surf brand has “already seen an uptick in business, partially based on weather and partially based on expanded assortment on the Wal-Mart floor,” led by swim and footwear.
Overall, Iconix raised its guidance for fiscal 2014 after delivering better-expected quarterly results. Non-GAAP diluted EPS for the first quarter of 2014 increased 33 percent to 72 cents a share, exceeding Wall Street’ consensus estimate of 63 cents. Revenues rose 10.5 percent to $116.1 million.
Among its other brands, its men's fashion brands – Rocawear, Ecko and Ed Hardy – were down year-over-year and are expected to see another transition year in 2014. However, Horowitz said the company is “confident that we have strong new licensees in place and the right distribution strategies for each to reignite sales.” Its fashion brands overall faced challenges domestically, but the company is seeing robust expansion internationally across much of its portfolio and its Peanuts brand is doing particularly well.
Looking to 2014, Iconix increased its 2014 revenue guidance to $450-$460 million from $440-$455 million, and increased its 2014 Non-GAAP diluted EPS guidance to $2.55-$2.65 from $2.50-$2.60.
Neil Cole, Iconix’s president and CEO, said Iconix is looking at a number of large global opportunities that could further diversify the company “while staying true to our asset light business model.”
