Iconix Brand (ICON) Stock Jumps on Earnings Beat
NEW YORK (TheStreet) -- Shares of Iconix Brand Group (ICON) - Get Report were gaining 20.1% to $8.28 on Monday after the apparel company beat analysts' estimates for earnings for the third quarter.
Iconix reported earnings of 33 cents a share for the third quarter, beating analysts' estimates of 21 cents a share for the quarter. Revenue fell 19.4% year over year to $88.9 million for the quarter, below analysts' estimates of $105.67 million.
The company said that foreign currency exchange rates hurt its licensing revenue, and the lack of "other revenue" contributed to the large drop in overall revenue for the quarter. Iconix reported "other revenue" of $18.7 million in the year-ago quarter related to a joint venture for its Lee Cooper and Umbro brands in China.
"We have gone through a difficult transition period, but Iconix continues to have significant business strengths including its diversified portfolio of consumer brands, profitable business model and strong free cash flow generation," Chairman and Interim CEO Peter Cuneo said in a statement. "All of us at the Company are focused on capitalizing on these strengths and addressing the issues that have impacted more recent performance to improve our results and enhance value for shareholders."
On Friday, Iconix announced it will have to restate certain financial statements from 2013 to 2015, and provided its full year 2015 guidance. The company doesn't expect to see any "other revenue" for the rest of 2015.
About 5.5 million shares of Iconix were traded by 9:49 a.m. Monday, well above the company's average trading volume of about 1.7 million shares a day.
TheStreet Ratings team rates ICONIX BRAND GROUP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate ICONIX BRAND GROUP INC (ICON) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
You can view the full analysis from the report here: ICON
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