Iconix Brand Group, Inc. :ICON-US: Earnings Analysis: Q3, 2016 By the Numbers : November 21, 2016

Iconix Brand Group, Inc. reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of Iconix Brand Group, Inc. – Hanesbrands Inc., V.F. Corporation, Skechers U.S.A., Inc. Class A, Sequential Brands Group, Inc., Deckers Outdoor Corporation, Crocs, Inc., Time Warner Inc., Comcast Corporation Class A and Twenty-First Century Fox, Inc. Class A (HBI-US, VFC-US, SKX-US, SQBG-US, DECK-US, CROX-US, TWX-US, CMCSA-US and FOXA-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 90.94 million, Net Earnings of USD 15.22 million.
  • Year-on-year change in operating cash flow of -49.07% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-09-30 2016-06-30 2016-03-31 2015-12-31 2015-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 90.94 95.74 94.63 94.65 94.13
Revenue Growth (%YOY) -3.39 1.75 0.89 -15.8 -0.97
Earnings (mil) 15.22 11.58 18.62 -263.01 -5.39
Earnings Growth (%YOY) 382.46 -15.69 -70.77 -1201.86 -115.95
Net Margin (%) 16.73 12.1 19.67 -277.87 -5.72
EPS 0.27 0.23 0.37 -5.44 -0.11
Return on Equity (%) 7.15 5.71 9.53 -115.94 -2.04
Return on Assets (%) 2.47 1.85 2.95 -38.42 -0.73

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Market Share Versus Profits

Revenues History
Earnings History

ICON-US‘s change in revenue this period compared to the same period last year of -3.39% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that ICON-US is holding onto its market share. Also, for comparison purposes, revenues changed by -5.01% and earnings by 31.38% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Cash Versus Earnings – Sustainable Performance?

ICON-US‘s change in operating cash flow of -49.07% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 38.28% to 43.92% and (2) one-time items. The company’s pretax margins are now 32.69% compared to 5.65% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Iconix Brand Group, Inc.

Company Profile

Iconix Brand Group, Inc. engages in the provision of brand management services. It markets, merchandises, and licenses consumer brands directly to retailers, wholesalers, and suppliers of clothes, shoes, accessories, and novelty items. The company was founded in 1978 and is headquartered in New York, NY.

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