Sequential Brands posts revenue jump, Martha Stewart collaboration with QVC
Sequential Brands on Thursday released its first quarter 2017 results, the first results under Karen Murray who joined the company in March, and announced a multi-year agreement with QVC for the Martha Stewart brand.
"We started the year off strong with solid results in the first quarter and several new organic growth initiatives underway," said Karen Murray, CEO of Sequential Brands Group.
As a result of the first quarter performance, Sequential reiterated its fiscal 2017 guidance of $170 million to $175 million in revenue and $98 million to $102 million in adjusted EBITDA. The company expects its 2017 revenue to be weighted to the third and fourth quarters due to seasonality in its businesses and its many licenses.
Sequential also expects GAAP net income for the year to be between $15.5 million and $18.1 million for the year.
The licensing company posted a 16% revenue increase to $39.4 million, and non-GAAP income was $5.9 million, or $0.09 per diluted share, compared to $2.5 million, or $0.04 per diluted share, in the previous year.
The non-GAAP basis income does not include costs associated with the departure of Yehuda Shmidman, who stepped down as CEO of the company in March. With these costs, Sequential had a $1.2 million net loss on a GAAP basis compared to $1.1 million in the prior year.
In addition, adjusted EBITDA also increased to $23.0 million from $16.7 million.
"Going forward, our top priority is implementing new revenue initiatives across all of our brands, while maintaining a disciplined approach to expense management,” added Murray. “At the same time, we are focused on taking the steps needed to improve our balance sheet."
One of the new initiatives for the company is the partnership with QVC for the Martha Stewart brand. As per the multi-year agreement, QVC will launch several categories for the Martha Stewart brand, including skincare, apparel and food and beverage. The new collaboration, which is expected to launch in the second half of 2017, will include appearances on QVC by the entrepreneur and Emmy Award-winning television host and a team of Martha’s favorite experts.
Sequential completed the integration of the Martha Stewart brand in 2016. The company in March announced a multi-year partnership with The Michaels Company for the Martha Stewart Crafts brand, and renewed the brand’s multi-year agreement with Macy’s, which serves as the exclusive US retailer for the Martha Stewart Collection.
The Martha Stewart brand currently reaches 100 million consumers each month through media and merchandising platforms.
Murray said, "QVC's proven differentiated retail experience plays perfectly with the strength of the Martha Stewart brand. We are excited by this opportunity as it provides the brand with a new channel of distribution and further expansion into untapped categories where we see strong sales potential."
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