Iconix Brand Group. reported Q4 sales jumped 21% to $65.8
million, boosted by the rollout of its sports brands in licensing deals to
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, a year ago.
EBITDA reached $41.9 million, an 11% increase versus the
year-ago period. Free cash flow grew 6% to $33.2 million.
On a conference call,
Yehuda Shmidman, Iconix’s 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. And with OP, we are gearing up for our new marketing
campaign to support the spring/summer season, which is already showing early
signs of success in-store.”
Among other direct-to-retail brands, Candie’s, an exclusive
with Kohl’s, had a “strong year” and is benefiting from its endorsement from
Britney Spears. MUDD jeans, another Kohl’s 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. Target recently
renewed its Mossimo license through January 2013.
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. Iconix acquired stakes in both Ed Hardy and
Ecko last year.
Looking ahead, Iconix reaffirmed its 2010 outlook for EPS between
$1.13 and $1.18 on sales ranging from $260 million to $270 million. In 2009, it
earned $1.10 a share on sales of $232.1 million.