Helped by a good reception of OP, Starter, and Danskin Now as well as exclusives at Wal-Mart, Iconix Brand Group's revenues climbed 9% in Q2 to $56.4 million from $51.7 million in Q2 last year.
On a conference call with analysts, Neil Cole, company chairman and CEO, said OP expanded into all Wal-Mart U.S. doors in Q2. In May, the surf brand received the premier real estate in the apparel section known as The Hot Spot and then received it again in July with a full BTS assortment. Starter “continues to grow each week as we roll out additional categories such as socks and footwear,” said Cole. Danskin Now is introducing a co-branded line with spokesperson and former volleyball star, Gabby Reece. Said Cole, “Danskin Now has continued to do well, maintaining high sell-throughs since it relaunched in the hot spot this past January.”
Iconix is also expanding its sports brands internationally at Wal-Mart. OP is now available across Canada and Mexico and will be going into Argentina this fall. Among other direct-to-retail brands, Candie's continues to do particularly well at Kohl's and Mudd had a good initial response to its new exclusive deal also with Kohl's. Mossimo was down, reflecting Target's sales trends. Joe Boxer is seeing growth at Kmart.
Among wholesale brands, the star was Ed Hardy, where royalties were up over 50% from last year on this quarter. (Iconix has joint ownership in Ed Hardy.). Rocawear is gaining market share in the urban market with continued growth at Macy's, but has been challenged by the closing of several specialty retail chains.
Net income in the quarter jumped 31% to $19.3 million, or 30 cents a share, from $14.6 million, or 24 cents, a year ago. EBITDA was $41.8 million, a 19% increase. Iconix raised its FY09 sales guidance range from $218 million to $225 million to a range of $223 million to $230 million. ICON kept its EPS guidance between $1.16 to $1.21, due to the impact of the equity offering this quarter.
