Iconix Brand Group. reported Q409 sales jumped 21% to $65.8 million, boosted by the rollout of its sports brands in licensing deals with Wal-Mart and its acquisition of Mark Ecko Enterprises, which includes Zoo York. Earnings rose 28.8% to $19.7 million, or 27 cents per share, from $15.3 million, or 25 cents per share, in Q4 2008.
On a conference call with analysts, Yehuda Shmidman, Iconixs EVP of operations, said its three exclusive licensed brands at Wal-Mart – Ocean Pacific, Starter and Danskin Now – experienced substantial growth last year as Wal-Mart added new categories, expanded door counts and increased rack space. As we head into 2010, the Wal-Mart brands are continuing on the same growth path, with strong momentum, said Shmidman. Danskin Now and Starter are jointly featured in a new hotspot that launched last week in collaboration with NBCs “The Biggest Loser” television series. As part of the collaboration, Danskin Now and Starter products will be integrated into the hit show.
Among other direct-to-retail brands, Candies, an exclusive with Kohls, had a strong year and is benefiting from its endorsement from Britney Spears. MUDD jeans, another Kohls exclusive, has expanded rapidly since its introduction last fall. Mossimo, a Target exclusive, had strong sales in the second half after showing some weakness in the first half.
Among its wholesale brands, Rocawear was described as holding up given the challenges in the urban market. Badgley Mischka was hurt by weakness in the luxury market. Ed Hardy continues to see growth in its core T-shirt line and was the number one-selling fragrance at Macy’s this past holiday season. In the Ecko portfolio of brands, Zoo York has been repositioned to the mid-tier segment with its entry into J.C. Penney and Kohl’s through a new long-term licensing deal with Li & Fung.
Looking ahead, Iconix reaffirmed its 2010 outlook for EPS between $1.13 and $1.18 a share on sales ranging from $260 million to $270 million. In 2009, it earned $1.10 a share on sales of $232.1 million.
