Iconix Brand Group 2Q profit contracts, cites Royal Velvet as an underperformer
Home Textiles Today Staff -- Home Textiles Today, 7/25/2012 2:37:16 PM
New York -- Iconix Brand Group, owner of Royal Velvet as well as several home and apparel brands, saw second quarter net income drop 31% to $28.6 million, or 40 cents per share. However, the figured bested Wall Street expectations.
Revenue for the quarter ended June 30 rose 5% to approximately $93.6 million
Net income for the first six months was fairly flat: $32.4 million vs. $32.3 million in the prior year quarter. The revenue gain was similarly modest: $182.1 million vs. $181.6 million for the prior year period.
During this morning's earnings call, Yehuda Shmidman, coo, said "As anticipated, the two largest declines in the past quarter were Royal Velvet due to the short-term impact of the license transition and our men's division."
Those declines were offset by strengths across the rest of the company's portfolio and the completion of a new joint venture in India, he said.
Neil Cole, chairman and ceo, noted: "The big hit is the transition from Royal Velvet, where we used to be at Bed Bath and Beyond and now we've just recently relaunched at JCPenney, [creating] a significant impact in the quarter and over the next two quarters."
Royal Velvet products have begun rolling out at JCP stores and according to Cole are "looking very good. We do believe we're positioned as the core of the home brand at JCP. We've been featured regularly in direct mail pieces, which look really great."
Moveover, he added: "We are no longer just the towel. Royal Velvet is a lifestyle brand. And we also see new products rolling out towards the backend of this year and into spring of next year and beyond."
He specified that new products would include "more furniture and window treatments and other things that would be in the JCPenny home area"
When asked about how Royal Velvet would be positioned in regard to Martha Stewart products, Cole responded: "Royal Velvet's hopefully going to have the core business on the soft side. We, quite honesty, have not seen Martha and don't know when it's actually coming."
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