Xcel Brands, Inc. (XELB) stock prices were down by 9.61% as of the market closing on June 1st, 2021, bringing the price per share down to USD$2.54 at the end of the trading day. After-hours trading saw the stock climb back up by 10.23%, bringing it up to USD$2.80.
Total revenues reported for the first quarter of the fiscal year 2021 amounted to USD$7.8 million, down from the USD$9.5 million reported in the same time period of the prior year quarter. A major contributing factor to the year-over-year difference in total revenue, the continued global pandemic has wrought havoc on economies across the world, with XELB reporting both their net product sales and their net licensing revenues for the quarter having taken a hit.
H Halston Licensing
This significant difference is primarily attributable, however, to the discontinuation of the licensing of the H Halston brand through QVC, having occurred in the fourth quarter of the fiscal year 2020. The company also consequently transitioned from H Halston to a wholesale supply model based on arrangements made with Qurate Retail affiliates and other interactive television networks.
Gross Profit and Margins
Despite the overall decrease in revenues and gross profits on an absolute dollar basis, the company was pleased to announce that overall gross profit margins managed to stay relatively flat, as compared to the same time period of the previous year. Gross profit margins on product sales went so far as to increase from 38% in Q1 2020 to 48% in Q1 2021.
Net Loss and EBITDA
XELB reported a net loss of roughly USD$2.5 million, representing a net loss of USD$0.13 per diluted share. This is a significant increase from the net loss of USD$0.8 million reported for the same quarter of the prior year, representing a net loss of USD$0.04 per diluted share. Adjusted EBITDA went from USD$0.7 million in Q1 2020 to negative USD$0.9 million for Q1 2021.
Solid Liquidity Position
The company reported having USD$84 million in stockholders’ equity as of March 31st, 2021, indicating a stellar liquidity position. Cash and cash equivalents were reported in the amount of almost USD$3 million, whereas working capital was posted at USD$6.5 million, not including the current portion of lease obligations.
Future Outlook for XELB
Armed with a solid liquidity position, the company is keenly looking forward to the end at the light of the tunnel in regard to the global coronavirus pandemic. With the world hurtling towards universal immunizations, XELB is gearing up to make the most of a post-pandemic economy. Current and potential investors are hopeful that the company will be able to leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.