By Thomas J. Ryan
Sequential Brands Group (Nasdaq:SQBG), which recently closed on the acquisition of the Gaiam yoga brand, said total revenue for the second quarter expanded 69.3 percent to $34.2 million. The company’s revenues largely represents royalty payments from licensees.
The gains were driven by the expansion of its Avia and And1 brands at Wal-Mart, CEO Yehuda Schmidman said on a conference call with analysts. Both brands were acquired in 2014 from Caleres Inc.
Avia’s range at Wal-Mart includes activewear and sneakers while And1 focuses on boys’ sneakers and t-shirts. The core licensees of Avia are E.S. Originals, Inc. (ESO) for footwear and Delta Galil U.S.A. Inc. for apparel. Licensees for And1 include ESO for footwear and High Life, LLC for apparel. Sequential Brands also owns Martha Stewart, Emeril Lagasse, Joe’s Jeans, William Rast, Revo, Ellen Tracy, DVS and Heelys.
Regarding the just-acquired Gaiam brand, Schmidman sees the potential to add “significant market share” in hardgoods for Gaiam with “even larger growth potential” in softlines, a category introduced a few seasons ago.
“Studies show that over 235 million people in the U.S. practice yoga today, up 76 percent in the past four years, and another 80 million people aspire to practice yoga,” Schmidman said. “With these stats and the demand that we see from our channel partners, we see a strong future for the brand within our active division.”
Sequential Brands reported a net loss of $100,000, or less than 1 cent a share, during the period, but that was an improvement over a loss of $1.3 million, or 3 cents a share, a year earlier. On a non-GAAP basis, net income improved to $3.6 million, or 6 cents per share, from $3.3 million, or 8 cents per share, in the prior year’s comparable quarter. Adjusted EBITDA improved to $17.3 million compared to $12.4 million in the prior year’s comparable quarter.
Lead photo courtesy Sequential Brands
