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Iconix Brand Group Inc. easily beat expectations for its third-quarter earnings and initiated guidance for fiscal 2014 above Wall Street’s early estimates.
In the three months ended Sept. 30, the New York-based brand management firm generated net income of $29 million, or 50 cents a diluted share, 6.9 percent above the $27.1 million, or 38 cents, registered in the comparable quarter of 2012. On an adjusted basis, EPS was 59 cents, 7 centsabove the 52-cent analysts’ consensus estimate.
Earnings before interest, taxes, depreciation and amortization rose 26.6 percent to $65.6 million from $51.8 million.
Revenues in the quarter, principally from licensing royalties, rose 23.8 percent to $107.2 million from $86.6 million. On average, analysts had expected revenues of $105.9 million.
In addition to raising its full-year estimates, the company initiated guidance for fiscal 2014, with adjusted EPS expected to be in a range of $2.50 to $2.60 and revenues seen growing to between $440 million and $455 million. Wall Street had expected adjusted EPS of $2.47 on revenues of $451.8 million.
Revenues for the current year are now expected to land between $425 million and $435 million with adjusted EPS of between $2.30 and $2.40, 10 cents higher than earlier projections.
“We believe the performance we have achieved year to date, with over 20 percent revenue growth and over 40 percent EPS growth, demonstrates the power of our business model and the strength of our portfolio,” said Neil Cole, chairman and chief executive officer. “Looking ahead into 2014 and beyond, we expect to continue to deliver strong growth through both organic initiatives as well as acquisitions as we continue to build our global footprint and further leverage our strong balance sheet.”
Investors liked the results, sending shares of Iconix up 85 cents, or 2.5 percent, to $34.31 in the early minutes of Nasdaq trading Tuesday.
For the nine months, net income rose 22.3 percent to $101.9 million, or $1.67 a diluted share, from $83.3 million, or $1.15. Revenues expanded 21.8 percent to $327.4 million from $268.9 million.
The Iconix brand portfolio includes Candie’s, Badgley Mischka, Mudd and Marc Ecko as well as equity interests in Ed Hardy, Material Girl and Buffalo.