Sequential Brands Group posts widening losses in Q3
As both its search for a new CEO and its review of strategic alternatives get underway, NYC-based consumer brands management company Sequential Brands Group, Inc. announced declining sales and deepening losses for the third quarter on Friday.
In the third quarter ended September 30, 2019, the company’s total revenue from continuing operations came to $25.4 million, a 13.9% decrease from the $29.5 million reported by Sequential in the prior-year period.
Quarterly net loss from continuing operations at the company, whose portfolio includes the Jessica Simpson brand, Gaiam and the recently relaunched Caribbean Joe label, was $18.4 million, or $0.28 per diluted share, increasing from Q3 2018’s $10.5 million, or $0.16 per diluted share.
Year to date, Sequential’s total revenue from continuing operations was $77.3 million, down 16.0% compared to $92.0 million in the first three quarters of fiscal 2018.
Net loss from continuing operations for the nine-month period came to $26.4 million, or $0.41 per diluted share, widening from a loss of $11.8 million, or $0.19 per diluted share.
Despite the declines, Sequential Chairman Bill Sweedler was positive about the headway made by the company in the implementation of its ongoing turnaround strategy.
“We feel great about the progress we’ve made to lay the groundwork for 2020, as we transition to a nimbler, leaner, higher margin operation,” he commented in a release. “We have strong brands spanning across the lifestyle and active categories and the financial flexibility to execute against our long-term strategy.”
Since the end of the third quarter, Sequential has announced the resignation of CEO Karen Murray and the start of a process to find her successor. Murray will continue to serve at the company as a senior advisor, while Chad Wagenheim has been promoted to the role of president in order to better support Sequential during this transition.
The company has also announced that it is exploring a range of strategic alternatives for its business, including the divesture of one or more of its existing brands, the acquisition of one or more new brand, and a stock buyback program.
The strategic review is a response to the interest that Sequential has been receiving in a range of brands in its portfolio and begins as the company pushes forward with the second phase of its transformation plan, which involves the right-sizing of its operational cost structure.
As part of the first phase of this plan, the company sold the Martha Stewart and Emeril Lagasse brands earlier this year.
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