Iconix Brand Group indicated that some of its active brands are facing challenges in lower channels that is not being completely offset by momentum seen by several of its labels in mid-tier and independent channels.

On a conference call with analysts, John Haugh, CEO of Iconix, noted that Starter, for example, was down at Wal-Mart, as expected, as the giant discounter has shifted certain basic categories from Starter to their house brands. But Starter Black, its legacy line of jackets and caps featuring retro team logos, “had very strong sell throughs and are being proactively worn by a number of celebrities and athletes.”

Danskin’s overall revenues were down because of a change in Danskin Now’s tiered royalty structure with Wal-Mart, but is overall seeing healthy sales growth at the chain. The royalty rate was reduced earlier this year due to higher overall Danskin Now sales at Walmart. Said John Haugh, CEO of Iconix, “The Danskin brand remains one of our strongest performing brands and was up for the full year. We are also pleased to announce that we have agreed to an additional two years with Danskin Now at Walmart.”

Danskin is also being relaunched in upstairs channels in activewear and intimates categories. Jenna Dewan-Tatum, the dancer and actress who stars in Supergirl, was hired last year as the new line’s spokesperson and was at the Project fashion show this week supporting the relaunch efforts. Said Haugh, “This is an upstairs Danskin that we have just haven’t frankly pursued before.”

Pony and Ecko are also seeing “good momentum.” Pony has been positioned to capitalize on the resurgence of the retro trend. A new footwear program will launch in spring 2017 with plans to roll out additional categories later in the year.

For Ecko, the focus last year was on stabilizing the brand following a transition to a new core apparel partner at the end of Q1. JCPenney continues to “substantially support” Ecko and intends to open about 30 in-store shops in key doors in 2017. An Ecko Function athleisure line is also being launched.

Among its other active brands, Haugh noted that Umbro remains a growth driver although he didn’t provide an update on the soccer brand’s progress. He did note that the company’s international sales are expected to grow in 2017 on the momentum seen by Umbro and Lee Cooper overseas and continued international expansion of Starter, Ecko, Danskin, OP (Ocean Pacific) and Zoo York.

Companywide, Iconix reported a loss of $297.5 million, or $5.30 a share, in the quarter after taking a $424.9 million impairment charge related to certain of the company’s trademarks and goodwill. Of the charge, about $185 million was due to the company’s continuing depressed market capitalization, about $170 million was tied to a revision of the company’s reported segments, and about $70 million directly related to the lower valuation of its more than 30 brands. In the year-ago period, the company lost $263 million, or $5.44, after a $402.3 million impairment charge.

Excluding the impairment charges, operating income in the quarter grew 46 percent to $57.4 million, largely due to a gain of $28.1 million related to the sale of Sharper Image. Excluding that gain, operating income declined as a result of lower revenue and higher compensation expense due to accruals related to new performance-based incentive plans. Sales, which are largely royalty income, declined 8 percent to $87.1 million.

For the full year 2016, revenues were down 2.8 percent to $368.5 million. The net loss widened to $249.5 million, or $4.82 a share, from $188.9 million, or $3.92, a year ago. Excluding the impairment charges, operating income was approximately $200.1 million, a 14.4 percent year-over-year increase.

For 2017, the company expects revenue to be in a range of approximately $350 million to $365 million. This compares to revenue of $359 million in 2016, when excluding revenue from the Sharper Image brand. Excluding non-recurring items, EPS is expected to land in the range of 70 to 85 cents a share, up from an adjusted 78 cents in 2016.

The company’s other brands include Candie’s, Bongo, Joe Boxer, Rampage, Mudd, Mossimo, London Fog, Rocawear, Cannon, Royal Velvet, Fieldcrest, Charisma, Waverly, Artful Dodger and Strawberry Shortcake. In addition, Iconix owns interests in The Material Girl, Peanuts, Ed Hardy, Truth Or Dare, Modern Amusement, Buffalo, Nick Graham and Pony.

Image courtesy Danskin