Iconix Brand Group Dives On Outlook Reduction

NEW YORK (AP) — Shares of Iconix Brand Group Inc. dived Wednesday after the apparel maker cut its full-year profit and sales outlook.

Shares of Iconix — which owns, licenses and markets apparel brands including London Fog — dropped $3.54, or 22.4 percent, to $12.26 in afternoon trading. The stock has ranged from $5.11 to $18.30 over the past year.

The transition of its Rocawear women's license to a new licensee and a June equity offering of 10.7 million shares led Iconix to lower its full-year earnings forecast to a range between $1.17 and $1.22 per share. The company previously predicted income of $1.30 to $1.35 per share.

Analysts polled by Thomson Reuters, whose estimates normally exclude one-time items, forecast net income of $1.34 per share.

Iconix also reduced its full-year revenue outlook to a range of $215 million to $220 million, from a prior range of $223 million to $230 million. Analysts expect 2009 revenue of $229.9 million.

Lazard Capital Markets analyst Todd Slater in a client note said that although Iconix cut its outlook, the company still expects decent revenue growth, given the poor economy.

The company's outlook also assumes that there won't be any acquisitions, but Slater said there's a chance that Iconix may make a purchase that boosts its results.

Slater lowered his share price target by $1 to $20, but that still implies shares have room to rise 26.6 percent from Tuesday's closing price of $15.80.