Iconix Buys Lee Cooper, Ups 2013 Sales, Profit Forecasts

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Spring/Summer looks from British brand Lee Cooper

Spring/Summer looks from British brand Lee Cooper

New York—Iconix Brand Group today reported that a drop in licensing revenue resulted in a 4% decline in its fourth quarter net profit, but its adjusted profit beat expectations and the company raised its 2013 forecast.

For the quarter ended Dec. 31, Iconix posted a profit of $26.1 million, or 37 cents a share, from $27.2 million, or 36 cents a share, a year earlier.

Excluding adjustments related to the accounting of convertible debt and other one-time items, Iconix earned 41 cents a share coming in ahead of analysts’ average estimate for 37 cents a share.

The quarter’s results were based on 7% fewer outstanding shares than the 2011 period, which has the effect of boosting earnings per share.

Net revenue fell 11% to $85.1 million, but beat market estimates of $82.51 million. Licensing and other revenue fell 11% to $85.1 million, from $95.5 million.

In other news, the company confirmed that through its subsidiary, Iconix Luxembourg Holdings Sarl, it purchased the Lee Cooper brand for $72 million in cash.

British Denim Brand Its Latest Acquisition

The inconic British denim brand has licenses in casual wear, footwear and accessories and the brand is sold in more than 80 countries worldwide with about $500 million in global sales.

“We are excited to add another truly global brand to our portfolio and expect with the addition of Lee Cooper, our international business to represent approximately 33% of our overall business in 2013,” said Neil Cole, Iconix’ chief executive. “With Lee Cooper’s portfolio of international licensees we look forward to leveraging these new relationships to further grow our worldwide footprint.”

Iconix, which owns brands such as Candie’s, Rocawear and London Fog, has been trying to expand its international sales over the last four years through brand acquisitions and joint ventures in China, India, Europe and Latin America.

As a result of the Lee Cooper acquisition, Iconix boosted its 2013 adjusted profit forecast by 5 cents to a range of $2.05 to $2.15 a share. It also raised its revenue estimate by $10 million to a range of $425 million to $435 million.

Analysts’ consensus expects a 2013 profit of $2.05 a share on sales of $416.4 million.

The company also said Wednesday that its board approved a new stock buyback program allowing the repurchase up to $300 million of its shares over a three-year period. It replaces the existing $200 million program, which Iconix said it expects to soon complete.