Centric Brands sees losses widen, sales drop
today Nov 15, 2018
Centric Brands, known until recently as Differential Brands Group, released its third-quarter 2018 results on Wednesday, posting widening losses due to a net sales decline.
The company’s total net sales for the three months ended September 30, 2018, decreased 6 percent from the same quarter last year to $39.8 million. A strong net sales growth in the consumer direct segment of 13.6 percent was offset by a net sales decline of 12.3 percent in its wholesale segment due to reductions at the company’s Hudson and Robert Graham brands.
By contrast, direct-to-consumer sales saw a jump in the quarter of 20.6 percent and a retail stores net sales jump of 9.4 percent, which was led by outlet store net sales growth of 13.8 percent and full price store net sales growth of 5.9 percent.
Still, overall, falling sales contributed to widening losses at Centric Brands, which reported a net loss and loss per share of $10.6 million and $0.89 per share, compared to $0.2 million and $0.12 per share, posted in the same period in the previous year.
Adjusted EBITDA for the third quarter of 2018 was $2.3 million as compared to $3.2 million for the same quarter last year.
The company completed the acquisition of a significant portion of Li & Fung-owned Global Brands Group Holding Limited’s American licensing business at the end of October.
The acquisition, which closed with a purchase price of $1.2 billion, added a slew of high-profile licenses to the new Centric Brands’ portfolio, including Calvin Klein, Under Armour, Tommy Hilfiger and Kate Spade, as well as entertainment properties such as Disney, Marvel and Nickelodeon.
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