XELB - Earnings call transcript Q3 2024

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Operator

Thank you for standing by. My name is Celine, and I will be your conference operator today. At this time, I would like to welcome everyone to the XELB's Q2 2024 Earnings Conference Call. [Operator Instructions] After the speaker remarks there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Burroughs. ahead. go Please

Seth Burroughs

on out went and filed Financial the everyone, report which The quarter earnings call. for company's us. should Robert will access With replay joining XXXX, greatly and being Friday. had and And are Commission Good Executive company's company XX, on have Jim September Chief the available report will Brands be thank for Haran. By Friday. third release the addition, ended last on is to Officer, us interest. and Xcel the your and earnings webcast XX-Q website with Exchange the call and quarterly quarter Welcome Relations in available release the today Investor appreciate Chairman Chief afternoon, D'Loren; the website. and participation last you the Officer, Securities of to at We a everyone XXXX the be call on www.xcelbrands.com. its quarterly Form This now,

events call forward-looking we mind any SEC. environment said on The filed factors otherwise. discussed detail macroeconomic statements. recent keep any from uncertainties the a to materially what publicly could whether is expectations call statements, materially could to subject These are the information, or change at revise today. report with cause of Xcel or as annual future this the of does that in not in risks that obligation undertake this to dynamic time. differ update any means current that result nature please forward-looking statements forward-looking new actual All certain contain are results most will explained here risk Before begin, in and company's

EPS non-GAAP management adjusted on will and income, that financial EBITDA. diluted non-GAAP today's certain note please including non-GAAP Finally, net measures, to refer call,

to performance the identify in a Our measures related these operating operations. of business and consistent company's basis to management to comparing performance to metrics on non-GAAP period trends from of uses assist as results period

These management costs because and are performance these of assist believes also for adjust supplemental thus, certain isolation accordance other investors believes as not in should alternatives results, with and that business representative provide any financial they results. to financial or the management considered earnings per useful or in measures net to be Our GAAP. non-GAAP and information other operating core calculated financial of company's not measurements in presented income, evaluating events share our these performance measures are measure

a of company's attachment to Form XX-Q refer Bob, and ahead. the for non-GAAP Executive may Officer. Robert measures. And now pleased D'Loren, to I'm the the release reconciliation You Chief Item Chairman please or go X, earnings introduce of X to Part to

Robert D'Loren

on today. afternoon, and us call Thank quarter the After performance update thank detail. results that, year. you, our start outlook more and our Seth. everyone, our I a you Good third brief Jim joining discuss would financial like our in today's with Haran, the will the for for to for of CFO, remainder

capital-light progress third our plan licensing media. transition in a social business, executing to to concluding the made working Fundamentals streaming Project we and fully continued core quarter, During TV live over on and

portfolio. bottom increased Although, Lori strategic we brand our brand cost revenues Goldstein of our declined a as top line a result the end actions the of improved result last licensing sale of from at nonetheless of revenues our our reductions as the and operating quarter, results line

in to them X caused make continued fulfillments up to the and hurricanes. The we sales of retail by disruptions is on although be despite year year shows XX% adjusted Our quarter approximately to last caused the third plan performing of from well approximately increased C. over sales HSN, expect and for fourth and quarter improved disrupted, canceled improved quarter XXXX. September's by programming. earnings by lost XX% on be brand Wonder the impact from remaining our hurricanes These EBITDA into non-GAAP last with XX% up October,

We will retailers, expected of XX%. and to and we given handbags brand next expect Hill in on Christie Separately, additional to on sales Strong plan HSN grow the ancillary year. second other in additional to third results, Brinkley products on upon footwear, see license on We as during across successfully retail by HSN with footwear XXXX and continue volume including garden. the bags, and additional launched launch its mentioned, are during partners spring strong in home previously care, is planned the And the beauty, potential we track for licensing categories for XXXX. Tower airtime retailers. product and interest in XXXX brand received to into sales continue new categories, signed of launch are quarter. introduce quarter based believe skin track very to by growth multiple quarter strongly other HSN finally, have categories third for we the first exceed on

Looking to growth at our increase, quarter quarter. off for first a second business, XX% Judith continue coming Ripka the royalties rate

the almost achieved The XXX% growth growth. and XX% from second third quarter year-over-year quarter

JTV. expect with We We drive fourth and royalties. holiday continued quarterly look sales quarter XXXX carry sales forward beyond into continued to growth sequential forward to momentum on seeing revenue

As launched quarter. previously Halston G-III discussed, Apparel this

for handbags spring footwear to expect the and fourth begin XXXX. they addition, quarter In during shipping

to from previously expect beyond. in begin As this license and discussed, up pick XXXX to revenues we

mentioned, commerce marketing Orme launched previously began quarter As marketplace second in video and July. its during soft social the and

brands. U.S., over pleased onboarding extension date. economy. transform of will democratize Orme our represents of to believe They Xcel, app to to it will Orme. We its doing and achieve creator Orme awareness potential natural great one results is The about TV. of goal very social the team For commerce video video and expertise a the with influencer and be building forces commerce the in are the job and a premier marketplace excited in the for this We're

and start and following social of total in spokesperson nearly robust our new with with expect brand portfolio the some Orme launches followers will we we a a and a off best exceed our up designer roster XX,XXX enter industry, XXXX and million brand of group XX aspirational media As brands. wrap XX good celebrity to in influencers XXXX users XXXX. is for of

with what do HSN strongly turn to our call to growing business in on best where discuss over space. And to is focused we financial would are things going our and I like Our is and company retail results. now, the the Jim

James Haran

This million financial afternoon, and million, third of third from C. was our HSN quarter XXXX. million results facility. Also party that representing of will fulfillment Bob, discuss Total revenues the $X.X we Longaberger disruptions good other to X despite 'XX the a X impacted approximately Hill of their was brand notably the Wonder revenue current Thanks, business $X.X licensing now sale decrease by quarter, caused of driven of ended Brinkley studio hurricanes on location for million revenue most Christie HSN. by September $X.X to brands, recognized remaining brand the quarter decline primarily licensing everyone. in new mainly the cost. at the attributable brand from months offset to inventory This of generated decline net the a increased briefly by the Goldstein partly in our Tower a by second the our all and by current XXXX. the quarter Lori and brand, and for of third during the the our and $X.X both the quarter I XX, quarter in revenues, approximately of sale

declined the to all months Year-to-date the and $XXX,XXX Following by X total for current million the brand. the previously sale, by to of plan year Project some decreased we revenue Lori sale related during current million, due operating final approximately books. wholesale on period, part $X.X mentioned no Fundamentals any basis, year-to-date product as the brand aforementioned in our due $XXX,XXX inventory for 'XX. only revenue Longaberger inventory of of to approximately licensing primarily of the that $X.X million exit the began mainly the our longer to were inventory. sale businesses from The have the Goldstein sale $X.X On our a year sales current of remaining our jewelry approximately also

Our the representing of quarterly On in reductions the the million prior $X.X period, These reduction from as down decreases and cost year-to-date for which direct XX%. $XX.X operating the the staffing operating in from to levels well direct reductions year, expenses quarter, and XX% by $X.X current months the a X $X.X related included attributable current quarter. overhead basis, prior or prior decreased the for $X.X approximately costs costs. year the other or million as business in for direct costs wholesale year-to-date million both expenses the for a million were and discontinuance of in year were million periods to operating

potential year operating our reduced $XX have we run for completed, substantially of per to initiative Fundamentals the rate further million approximately Project the reductions. With costs a with

operating at Goldstein non-cash result our sale by approximately of as year nature, X primarily the for depreciation a quarter Looking the $X.X prior and months, costs brand. prior for other amortization in the predominantly expenses. million are $X.X and and the expense which year of million Lori decreased

the included basis, year-to-date recognized transfer the divestiture the if Isaac In X amounts interest not provisioned notably XX.X% sale to revenue are interest to WHP. Also company our $X.X on XXXX. the the Lori results sub-lease it prior estimated in in obligation impairment or most negative that $X.XX the gain the related in a loss $X.XX in share represents charge the current million Brand investment or most current million notably approximately year-to-date in share related the for to value IM from prior the to our Backing net contractual per year first $X.X million the the the Goldstein or of compared charges, both of And improvement year, location. a was EBITDA a the minus net quarter from current we For per of loss Topco million of recognize $X.X $X.X year of $X.X $X.XX WHP charge give million a of net quarters Overall, the third a XXXX $X.XX to contingent were office ownership a charge million net million prior loss XX% million non-GAAP XXXX, membership Mizrahi back EBITDA $X.X the $X which $X.X the of period, improvement $X.X non-GAAP quarter of including quarter. of million non-cash with quarter share, IM quarter other a from $X.X a this would to and in for and Topco. of or loss our we million equity of to had minus in included to our we a our the net finally, of out, exit quarter had had a brand and million year. of with per we of loss minus asset minus portion for March XXXX. current the current adjusted various $X last GAAP compared negative achieved, after a loss non-cash conjunction On compared as quarter. The was $X.X share million targets per

impacted hurricanes management previously expecting portion X were continued quarter where of fourth going revenues growth, up As in in by in of improvement XXXX and make the new a EBITDA forward. quarter. With structure HSN and we're cost that revenue mentioned, anticipates our improved the revenues to place projected fourth

the of of the that or should compared continue had or basis, periods to share $X.X a which on Adjusted approximately non-GAAP $X.X year-to-date prior year-over-year to like unaudited negative share XX% basis, the current grow. a net year minus loss million Once to EBITDA future of or in per diluted for our $XX.X EBITDA are $X.X $X.XX this in loss of cost adjusted period. net million, of months the year minus in share, measurement opportunity minus net terms. loss for represents the an prior from current are income, minus million licensing months. On our as per Now year-to-date $X.XX from a per basis rightsized X improvement improve representing revenues months. remind a or improvement had EPS in loss X again, we X $X.XX net $X.X comparable non-GAAP I we non-GAAP per million prior non-GAAP everyone XX% a the have On projected $XX.X the we non-GAAP that take share approximately months structure, approximate a EBITDA a would of million negative net X million and year $X.XX with was non-GAAP to

release XX-Q reconciliation the Our these earnings and of GAAP measures. press directly items most with Form a comparable present

Now turning to sheet our and balance liquidity.

restricted. $X approximately equivalents September cash million the of had which As was XXXX, $X.X of XX, total million, and company of cash

capital, was net $X.X Our deficit excluding of and obligations shares million. working any current payable a lease deferred the approximately revenue obligations portion of in

loan provides XXXX. into after the our last the million $X.X a repayment $XX capital loan $X.X we approximately company agreement, term new of million and liquidity with increased of However, by XX, term week, approximately debt entered September subsequent additional working million which to previous

repayments commence not principal over with to under quarterly until the Additionally, term March call that, I like back Bob? XXXX. And the Bob. turn will XX, new loan would to

Robert D'Loren

This Thank remarks. our Operator? concludes prepared you, Jim.

Operator

you. Thank

now will question. first We Markets. the question Kupinski line for Your of Instructions] with open Capital comes Michael [Operator from Noble

Michael Kupinski

that's sort more you this quarter kind and can being wondering, we there's looking new was of some if that next of wondering performing. was give color on you give first bit I the that the on thing. balance how of is Rob, can that I a year. Halston and some us if know product of you're how into us little shipped into go year as kind indicating of I insights

Robert D'Loren

at product. this And a Michael, job we We and collection. they've shoes think we've reports nice looked done bags. on have the sales with don't

know are year and is and to off until a after good days their expectations outerwear, with next won't that they we But we they're handbags and what hear the comfortable are XX where footwear. it quarter. start for in sportswear, So,

Michael Kupinski

prospects be opinion this seem about hasn't of as point? were the mean to this changed with at you at as Halston Do point? really you sanguine I your XXXX

Robert D'Loren

No.

particularly product in happy what the and expect and said they we're We made, that where do are. with have apparel, adjustments they they will with and that the of some they the comfortable we're

Michael Kupinski

the you continue there anticipate was wondering give structure Isaac to situation can know Isaac forward? interest that explains maybe if is the and going background your the and with XX-Q and I Mizrahi I going you in us the how story

Robert D'Loren

a where and with took a the Michael, conservative have because been issue it's given things We value not with QVC. asset systemic on Yes. approach going, Isaac

are in in down and studio challenge person hours his Our has been Isaac getting back significantly.

to We January. in airtime starting up that someone introducing be are of Isaac's lot next and studio year a pick in will

we we're Jim that concerned. So, value is to as the can optimistic, of walk you adjustment. stay be mechanics thought but conservative And the through best asset it would

James Haran

early is took the in answer. balance for I we're work quarter. -- specifically to that I We mean think essentially, reserve a it's non-cash measurement the time. will can we I against year then on charge itself anything, the the If sheet, what the pretty is, going be and adjustment think asset against straightforward fulfill we and next out mean, value. what and we we that when that arrives it we a period that at netted will adjustment put made now will it the

in So, XXXX. very little be there impact will

Michael Kupinski

that my still Or you indicating All will last towards do that QX you you you right. to forward? Do profits improvement. in QX And think might show EBITDA going QX? is show were question, that anticipate positive swing adjusted going Jim, where

James Haran

be residual third the HSN quarter. was benefit improvement the It it the turn of will know reporting, profitability. forecast be know where having to an extent there if we to doing it improvement. We We to an from if without X our of again, return from know And will October will hurricanes. some will we're business impact There in it having it. the still certainly best be with don't the positive. don't I back the will the just can do

Michael Kupinski

whether way been how the impacted Is much provide that? Is revenues there any monitor there quantify any to hurricanes? some by have to or way monetary might

Robert D'Loren

it a show a $XXX,XXX. for able realization and XX% last Well, because airtime HSN. was was or can was tell secure on We week show. Michael. to and was And moved the about you It it were TSV us did great hurricane TS on was, and we to day of the what $XXX,XXX, I great that more TS

period be will but ends. until swing reporting So, fourth we're hopeful the quarter, to profitability we that won't in returns can everything and and the the ships we normal know

Michael Kupinski

line additional squeeze were you stand just I quarter? launching quarter. going last I additional brands if in that was one wondering that And know the just brands you may And where time of the the indicated more of kind I on into in. do anticipating you

Robert D'Loren

of be brand did be will new That say launch year. that there a next So we brand. March home would a category in

others under the that launching prototypes several agreements category have are kitchen will March year. LOI, in X, and home in wrapping be on We X up definitive we working next for that we're and launch.

we several and in will well launch year as other have We apparel hoping in that that new transactions we're hard home, goods. X potential next

Operator

Your next the Anthony question comes Lebiedzinski from Sidoti. of with line

Anthony Lebiedzinski

it quarter but as as timing you fourth follow-up I the can color the provide Just revenue as the it sense like sounds is mean, a of that kind as call, like as think quarter, what given just today's So, better will there in? of expectations. far you where come here? guess, might I than -- far to additional third should think other you any be happen any

Robert D'Loren

if think should we weeks by I shipments year, we it out these But hold, ships in of unless this said, everything the I Anthony. know year-end. X December last did that get as won't

Anthony Lebiedzinski

you. Got

you just So, year? say quarter last if it hold, that. you could or fourth should to third of mean when relative quarter clarify Just you the

Robert D'Loren

forecasting been for fourth Where we've quarter.

Anthony Lebiedzinski

Got you. Okay.

Okay. That's helpful. very

any competitively the that at look of release. at retailers, And you're macro at a far could overall business? Bob, as when just I little as at levels But you your seeing bit your macro is inventory overall, curious, perspective? just as impact sense of how retailers I your picture, levels what inventory Okay. what then press from in as just you referenced know, look mean, the that far

Robert D'Loren

they'll but would aggressively Maybe impact Halston, some inventory that generally, be this thought, there. could seen don't that be push I Well, enough think a And there our an interactive mark there with haven't obviously, could aren't if there if out but we impact impact. retailers be material sales business? Halston inventoried at impact G-III that, there down has are sales. they And television what and on time could over

Anthony Lebiedzinski

very us trajectory brands. that. next I mean, in you That's as Just on an know helpful. how for expecting? regards you of I gave additional Orme, What as are year? launches think then update you a number curious brand of to far the do And about

Robert D'Loren

higher selective on, average aspirational So, typically that Flip. on or say, brands than, they being luxury values on about have brands very the bring find is looking kinds order shops Orme TikTok that you Anthony. what They're would of for

Orme to order Flip are TikTok the is today, competing the with around XXX. goal average Our Those above Shop keep marketplaces. and are values XX. And X at

So, it's Orme -- will It in universe live zone brands. XXX will and we of be better be for to believe that the brands XXX marketplace streaming.

there's onboarded ramp couple that that brands couldn't hundred and So, begin reason Orme with XX now, of no up. add another

Anthony Lebiedzinski

And your perhaps like said, perhaps? are color you're there far provide done then helpful. certainly, with guys very us a you And as your on reducing nice it cost. as looking do opportunities Jim job some take any what to Can That's expenses. what additional as costs, out operating of have more you to sounds based to

Robert D'Loren

We've to that cut disrupting we looking in are $XXX,XXX And been think next there's we of $XXX,XXX going move Yes. and to QX can without into very do that year. carefully expenses to that at another going overhead. we operations, operating

Anthony Lebiedzinski

Got you.

Okay. so new liquidity have then loans. the you And improved lastly, with term guys your

Or for a do we think do Or I raise? that? think good in another mean, perhaps how forward, guys be going need you should shape? about see Just you capital you'll

Robert D'Loren

in I we think upon have pipeline. it the of transactions depends all that our

definitive would only a I are require and of capital. in earlier, existing stream these LOI It an would And one and of them some converting of As revenue brand. be purchase to agreement. said

and influencer JVs, more personality-driven start-up costs. are some others which have The

that we retailers, we if in to that on and that, accretive conclude we all our partners us we with TV do HSN. interactive based they're if -- need and QVC to So, of all particularly we've had conversations these And see transactions. to would

Anthony Lebiedzinski

to holidays all. happy and luck of Best

Robert D'Loren

Anthony. you, Thank

You too.

Operator

comes Instructions] Howard from of Shields. next Wellington the line Your question Brous [Operator with

Howard Brous

of, been comfortable you've When say, an Robert, some tremendous at XXXX, it, for progress $X with numbers how are there, making. call congratulations start you the on million? of out I the number EBITDA looking

Robert D'Loren

range between that there. are out we're numbers the [ out X.X ] it, a Howard, call there, there's in comfortable number So that and range the, X.X and

working drops will the And bottom driven performance that can course, on, revenue, get and amount by both Of we be EBITDA. will that signed to start if of because significant to G-III's some it top and of those new a some extent, early it generate transactions we're drive line.

Howard Brous

when for, be bottom you half top How basically second second when of the because significant say, could -- XXXX, you'll line, part that's know? about that talk line

Robert D'Loren

numbers the where good are, Howard. analyst We're

Howard Brous

the about... mean X.Xx about talking the Taking EBITDA. you're a thoughts company selling between two, Any that's at

Robert D'Loren

value. Xx you contract that cap. know, is our it's attractive have significant We market asset also but as Halston just One, we an multiple, believe worth the alone

Howard Brous

How my of do terms sheet? you question was next in know balance that

Robert D'Loren

We and the way Howard. the embedded it do, the in look And at given it just intangibles, to stock it's price multiple that same incredible where at you EBITDA our of see value is.

Howard Brous

luck, of and Best New a Happy Christmas Year. Merry

Robert D'Loren

you. Than

Operator

now turn concludes the to for remarks. speakers back I will any our session. question-and-answer the call closing That over

Robert D'Loren

you, and very thank you a in all Xcel holiday Prosperous interest Healthy your We ladies time this I And and Thank New operator. in and appreciate and your season afternoon. best you of Brands. wish support this the greatly Happy all and Year. for continued gentlemen,

and As well eat always, healthy. be fit, stay

Operator

for today's you Ladies and gentlemen, Thank joining. that call. concludes all

You now disconnect. may

Xcel Brands (XELB) 23 Dec 242024 Q3 Earnings call transcript