Shares of Iconix Brand Group Inc (ICON) hit a new 52-week high of $29.45 on May 3, following announcement of solid first quarter 2013 results and an upbeat 2013 guidance on Apr 24, 2013. Shares of this Zacks Rank #1 (Strong Buy) stock have been gaining momentum, driven by a spate of accretive acquisitions made in the recent past.
Iconix’s share prices closed at $28.95 on May 3, recording a healthy return of 28.7%, year-to-date. The company’s long-term estimated EPS growth rate is 9.05%. Average volume of shares traded over the last three months came in at approximately 1,009K.
Solid First Quarter Performance
Iconix posted strong first quarter 2013 earnings of 54 cents per share, beating last year’s result by 26% and the Zacks Consensus Estimate by 5.9%. In fact, Iconix has topped earnings estimates in 10 out of the last 13 quarters. Iconix’s revenues in the quarter surged 19% year over year and also surpassed the Zacks Consensus Estimate by 4%. The acquisitions helped the company deliver solid performance in the first quarter of 2013.
Iconix successfully completed three acquisitions in the past five months. In late-Feb 2013, Iconix acquired the renowned lifestyle brand Lee Cooper, which includes multiple lifestyle categories including men’s and women’s casual wear, footwear and accessories. In early-Feb 2013, Iconix formed a joint venture with Buffalo International ULC to acquire a 51% interest in the latter’s Buffalo David Bitton brand in order to expand its retail footprint in the U.S. and Canada. In early-Dec 2012, Iconix acquired the renowned football brand Umbro from Nike, Inc. (NKE) in order to further strengthen its portfolio with an iconic brand that focuses on the fashion, athletics, electronics, entertainment and home industries.
Following solid first quarter 2013 earnings, Iconix raised its 2013 adjusted earnings guidance to $2.10–$2.20 per share from the previously announced range of $2.05–$2.15 per share. The company had also raised its earnings guidance in the fourth quarter of 2012.
We remain impressed with Iconix’s strategic acquisitions and consistent expansion of licensing agreements. Iconix expects to explore additional opportunities and enhance its portfolio with more iconic brands in the upcoming quarters. Iconix expects to deliver over 20% revenue and EPS growth for 2013.
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