Iconix Shares Soar After Earnings Beat, Sale Of Peanuts And Strawberry Shortcake Brands

By Tonya GarciaMarketsMarketWatch Pulse

Iconix Brand Group Inc. shares soared 10.7% in Wednesday premarket trading after the company reported first-quarter sales that beat consensus and announced a deal to sell the Peanuts and Strawberry Shortcake brands. Iconix's portfolio includes clothing and shoe brands Rampage, Mossimo, London Fog and Candie's. Net loss was $4.3 million, or 9 cents per share, after net income of $18.6 million, or 37 cents per share, for the same period last year. Adjusted EPS was 34 cents per share, beating the 22-cent FactSet consensus. Sales were $58.7 million, down from $66.1 million and below the $89.3 million FactSet consensus. Last year's sales included the Sharper Image brand, worth about $1.4 million in revenue, and Badgley Mischka, worth sales of $0.2 million, which were both sold in 2016. Iconix announced Wednesday that it has entered an agreement to sell the Peanuts and Strawberry Shortcake brands to DHX Media Ltd. for $435 million in cash. Peanuts was acquired in 2010 and Strawberry Shortcake in 2015 for a total cost of $246 million. Going forward, the entertainment segment will be reported as a discontinued operation. Iconix expects full-year 2017 sales in the range of $235.0 million and $245.0 million, below the $355.6 million FactSet consensus. EPS expectations were revised down to 29 cents to 44 cents from 43 cents to 58 cents, and adjusted EPS is expected to be 70 cents to 85 cents. The FactSet consensus is 80 cents. Iconix shares are down 27.4% for the last three months while the S&P 500 index is up 3.5% for the period.

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