XCel Brands, Inc. :XELB-US: Earnings Analysis: Q1, 2017 By the Numbers : June 26, 2017

XCel Brands, Inc. reports financial results for the quarter ended March 31, 2017.

Highlights

  • Summary numbers: Revenues of USD 8.43 million, Net Earnings of USD -0.40 million.
  • Change in operating cash flow of 22.27% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Earnings decline largely a result of non-operational activity, pretax margins improved from -1.14% to 0.68%.

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

2017-03-31 2016-12-31 2016-09-30 2016-06-30 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 8.43 6.92 8.33 9.12 8.39
Revenue Growth (%YOY) 0.45 -7.47 13.56 44.22 27.33
Earnings (mil) -0.4 2.72 0.12 -0.09 -0.05
Earnings Growth (%YOY) -786.67 258.37 168.18 -104.16 61.86
Net Margin (%) -4.73 39.33 1.42 -0.99 -0.54
EPS -0.02 0.14 0.01 -0 -0
Return on Equity (%) -1.5 10.42 0.46 -0.35 -0.18
Return on Assets (%) -1.03 6.93 0.31 -0.24 -0.12

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, XELB-US‘s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if XELB-US‘s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by 21.91% and earnings by -114.67% compared to the previous period.

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

XELB-US‘s year-on-year change in operating cash flow of 22.27% is around its change in earnings. This suggests that there are likely no significant movement in accruals or reserves for managing earnings this period.

Margins

The company’s earnings decline is largely a result of non-operational activity. As a matter of fact, the company showed increases in operating (EBIT) and pretax margins. EBIT margins improved from 4.04% to 5.16% and pretax margins widened from -1.14% to 0.68%.

EBIT Margin History
PreTax Margin History

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Company Profile

XCel Brands, Inc. is a media and brand management company, which engages in the design, production, licensing, marketing, and director to consumer sales of branded apparel, footwear, accessories, jewelry, home goods, and other consumer products, and the acquisition of dynamic consumer lifestyle brands. It operates under the following brands: Isaac Mizrahi, Judith Ripka, Wonder, and High Line Collective. The company was founded by Robert W. D’Loren in August 31, 1989 and is headquartered in New York, NY.

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