Why Sequential Brands Group Inc Stock Jumped Today

By Jeremy BowmanMarketsFool.com

What happened

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Shares ofSequential Brands Group Inc(NASDAQ: SQBG) were surging today after the fashion-label owner delivered a better-than-expected first-quarter earnings report.

As of 11:00 a.m. EDT, the stock was up 16.8%.

Image source: Sequential Brands.

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So what

The parent of Martha Stewart and other fashion and lifestyle brands said revenue increased 16% to $39.4 million, breezing past analyst estimates at $37 million, while adjusted earnings per share increased from $0.04 to $0.09. That easily topped estimates at $0.03 as well.

CEO Karen Murray said:

Separately, the company also announced a multiyear partnership between the Martha Stewart brand and QVC, which includes appearances by Stewart for her to promote her beauty and fashion products.

Now what

Management reiterated its full-year guidance with revenue of $170 million to $175 million and $98 million to $102 million in adjusted EBITDA. However, the company raised its adjusted earnings per share guidance from a previous range of $0.32-$0.37 to $0.37-$0.41.

That is still below analyst expectations at $0.49 a share, but that guidance may be conservative considering the company refused to raise its revenue forecast. Even so, after the strong earnings and revenue beat, the stock deserves a boost.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.