Iconix Acquires Ecko Brands - Analyst Blog
May 28 2013 - 1:20PM
Zacks
Clothing brand licensing company Iconix Brand Group
Inc (ICON) has acquired the remaining 49% interest in IP
Holdings Unltd LLC ("IPHU") for $45 million in cash. IP Holding,
through its subsidiary, manufactures and markets fashion and
lifestyle products in the United States and internationally and
owns brands such as Ecko Unltd. and Marc Ecko Cut & Sew. Iconix
had previously acquired a 51% stake in IP Holdings Unltd LLC in
2009.
Marc Ecko Enterprises will continue to remain the core apparel
licensee for the brands. In addition, the sellers will no longer be
obligated to pay about $52 million in IP Holdings debt.
Besides acquisition of the Ecko portfolio of brands, New
York-based Iconix has made a number of accretive acquisitions in
the recent past, which helped the company deliver solid first
quarter results and an upbeat guidance. Iconix first quarter 2013
earnings of 54 cents per share beat last year’s result by 26% and
the Zacks Consensus Estimate by 5.9%. Iconix’s revenues in the
quarter surged 19% year over year and also surpassed the Zacks
Consensus Estimate by 4%. Following solid first quarter 2013
earnings, Iconix raised its 2013 adjusted earnings guidance to
$2.10–$2.20 per share from the previously announced range of
$2.05–$2.15 per share.
Iconix successfully completed three acquisitions in the past
five months. In late-Feb 2013, Iconix acquired the renowned
lifestyle brand Lee Cooper, which includes multiple lifestyle
categories including men’s and women’s casual wear, footwear and
accessories. In early-Feb 2013, Iconix formed a joint venture with
Buffalo International ULC to acquire a 51% interest in the latter’s
Buffalo David Bitton brand and expand its retail footprint in the
U.S. and Canada. In early-Dec 2012, Iconix acquired the renowned
football brand Umbro from Nike, Inc. (NKE) to
further strengthen its portfolio with an iconic brand that focuses
on the fashion, athletics, electronics, entertainment and home
industries.
We remain impressed with Iconix’s strategic acquisitions and
consistent expansion of licensing agreements. Iconix expects to
explore additional opportunities and enhance its portfolio with
more iconic brands in the upcoming quarters. Iconix expects to
deliver over 20% revenue and earnings per share growth for 2013.
Iconix holds a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Other stocks in the consumer discretionary sector that are
performing well and are therefore worth considering include
Hanesbrands Inc (HBI) which holds a Zacks Rank #1
(Strong Buy) and Joes Jeans Inc (JOEZ) which
carries a Zacks Rank #2 (Buy).
HANESBRANDS INC (HBI): Free Stock Analysis Report
ICONIX BRAND GP (ICON): Free Stock Analysis Report
JOES JEANS INC (JOEZ): Free Stock Analysis Report
NIKE INC-B (NKE): Free Stock Analysis Report
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