Sequential Brands slashes losses in fourth quarter
NYC-based consumer brands company Sequential Brands Group, Inc. reported increased Q4 revenues and a significantly narrowed loss on Wednesday, following a year of efforts to turn the group’s fortunes around.
The company, which owns brands such as William Rast, Martha Stewart and Jessica Simpson, adopted a new revenue recognition standard in 2018 and has therefore provided results in accordance with both its former revenue recognition rules (ASC 605) and its new standard (ASC 606).
For the fourth quarter ended December 31, 2018, Sequential Brands reported revenue of $48.9 million, compared to $46.9 million in the prior-year period. Under ASC 605, Q4 2018 revenue would have been $49.9 million.
Net loss for the quarter came to $2.2 million, or $0.03 per diluted share, a strong improvement when compared to the loss of $162.9 million, or $2.58 per diluted share, reported in Q4 2017. Under ASC 605, net loss for the fourth quarter of 2018 would have been $1.2 million, or $0.02 per diluted share.
Full-year 2018 revenue was $170.0 million ($173.5 million under ASC 605), up from $167.5 million in fiscal 2017.
The company’s annual net loss was $10.5 million, or $0.16 per diluted share, compared to a loss of $185.7 million, or $2.95 per diluted share, in the previous year. Under ASC 605, full-year 2018 net loss would have been $7.8 million, or $0.12 per diluted share.
“2018 was a productive year for Sequential with strength across our portfolio of brands both with new and existing business,” said Sequential CEO Karen Murray in a release. “Moving ahead, we continue to execute against our strategy of driving organic growth, improving our cost structure and strengthening our balance sheet.”
As it moves into 2019, Sequential Brands has also announced a partnership between its Heelys footwear brand and legendary basketball team The Harlem Globetrotters.
The relationship involves experiential activations, a shoe collaboration, an exclusive online content series and a unique school curriculum integration. Select Harlem Globetrotters will also wear Heelys on court for a script integration.
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