Thanks to better-than-expected Q1 results driven by the successful roll out of Op, Starter and Danskin Now at Wal-Mart as well cost-cutting efforts, Iconix Brand Group raised its guidance for the full year.
Iconix also acquired a 50% interest in Hardy Way, the owner of the Ed Hardy tattoo-inspired brand, for $17 million.
In the first quarter, revenues slid 9% to $50.5 million. The decline was primary tied to Mudd, which is being transitioned to an exclusive brand for Kohl's. On a conference call, management said that following a “tough holiday season,” sales improved in February and March.
On a non-GAAP basis, excluding non-cash interest related to the adoption of the new accounting method for convertible debt, earnings declined 4% to $17.6 million, or 29 cents a share, but was three cents better than Wall Street's consensus estimate.
EBITDA margin improved 230 basis points to 72%, reflects a 16% quarter-over-quarter decline in overall SG&A expense.
Looking ahead, its 2009 non-GAAP EPS guidance was raised to a range of $1.30 to $1.35 from $1.20 to $1.30 previously. Revenue guidance was raised to between $218 and $225 million from a previous range of $210 to $220 million.