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Iconix Group lowers FY15 revenue and EPS outlook

Business REPORT

Iconix Group lowers FY15 revenue and EPS outlook

By Prachi Singh

Nov 6, 2015

The Iconix Group has revised its full year 2015 guidance estimates led by the preliminary third quarter results, the elimination of ‘other revenue’ from its estimates, revised expectations for the Peanuts brand, weak performance in men's fashion, and reductions in revenue in the first nine months of 2015 and reductions in revenue assumptions for the fourth quarter of 2015.

“While we are disappointed in the restatement of our results and revision to our guidance, we believe the actions being taken will create a more solid foundation for Iconix and represent a positive step toward the future of the Company. As we look forward, Iconix continues to have significant business strengths from which to build, including its diversified portfolio of consumer brands, profitable business model and strong free cash flow generation,” said Peter Cuneo, Chairman of the Board and Interim Chief Executive Officer of Iconix.

Negative impact of several factors on Q3

Based on the several factors that are expected to affect the quarter, the company expects the third quarter licensing revenue to be approximately 89 million dollars and zero ‘other revenue’.

Non-GAAP diluted EPS is anticipated to be approximately 0.09 dollar. This includes the negative impact from the increase in accounts receivable reserve and a tax adjustment. Excluding these two items, non-GAAP diluted EPS is expected to be approximately 0.33 dollar. The company expects GAAP diluted EPS to be approximately 0.13 dollar.

Revised outlook for FY15

The Peanuts brand has been one of the company's strongest performing brands. With the upcoming movie, new promotional partnerships and new retail programs, the company currently expects licensing revenue related to the Peanuts brand to grow approximately 20-25 percent in 2015, excluding 17.1 million dollars of revenue related to the Company's license renewal with ABC in 2014. However, this is an approximate 24 million dollars downward revision from the company's previous forecast.

For the full year 2015, the company expects licensing revenue guidance to a range of 370 million dollars - 380 million dollars from 410 million dollars - 425 million dollars. ‘Other revenue’ guidance is revised to zero from 5 million dollars to 15 million dollars and non-GAAP diluted EPS guidance to a range of 1.35 dollars - 1.40 dollars from 2 dollars - 2.15 dollars. GAAP diluted EPS guidance is expected to a range from 1.55 dollars - 1.60 dollars from 2.24 dollars - 2.39 dollars.