Sequential Brands Stock Soars On Q4 Revenue Beat

Jessica Simpson Debuts Active Shoes
Jessica Simpson active shoes for fall '16.
Courtesy of brand.

Sequential Brands Group Inc.’s stock has been flying in early morning trading Wednesday — up more than 25 percent at press time — after the firm reported high-double digit revenue growth in the fourth quarter.

The New York-based brand management company said its revenue rose 69 percent to $31.4 million, compared to revenue of 18.6 million in the prior year’s quarter. Analysts had predicted revenues of $29.9 million.

Sequential, which acquired the Jessica Simpson brand, Joe’s and Martha Stewart Living Omnimedia Inc. last year, posted a net loss of $5.7 million, or 12 cents per diluted share, compared to a net loss of $3.8 million, or 10 cents per diluted share, in the prior year’s quarter. On a non-GAAP basis, fourth quarter net income was $11 million, or 23 cents per diluted share. Market watchers had forecast diluted EPS of 17 cents.

2015 was a significant year of growth for Sequential. With over 150 licensees, strong brands driving $4 billion in annual retail sales, committed financial stakeholders, a continued eye on strategic acquisitions and a winning activation team, we believe that we are well positioned for further growth in 2016 and beyond,” Sequential CEO Yehuda Shmidman said in a release. “We are fully on track with the integration of the Martha Stewart business into our platform and we are encouraged by our early progress to date in activating new growth for the long term.”

The company’s full-year revenue increased 111 percent to $88.3 million, compared with $41.8 million in the prior year. Net loss was $2.9 million for the year, or 7 cents per diluted share, compared to a net loss of $1.1 million, or 4 cents per diluted share, in the prior year.

Looking ahead, the company reiterated its full-year guidance for revenues of $145 to $150 million in revenue and adjusted EBITDA of $83 to $87 million.