Apex Global Brands swings to Q4 loss of 1.1 million dollars

Apex Global Brands reported revenues of 5.5 million dollars for the fourth quarter, a decrease of 10 percent, while full year revenues totalled 21 million dollars, a decrease of 14 percent from the prior year. Net loss was 1.1 million dollars for the fourth quarter or a loss of 21 cents per diluted share, compared to net income of 0.2 million dollars or 4 cents per diluted share, in the fourth quarter of the prior year, while net loss for fiscal 2020 was 11.5 million dollars or a loss of 2.12 dollars per diluted share compared to a net loss of 11.5 million dollars or a loss of 2.45 dollars per diluted share, in the prior year.

“While fourth quarter results were in line with our expectations, there is no denying the extent of the challenges Covid-19 has presented our company, our industry and our world,” said Henry Stupp, Chief Executive Officer of Apex Global Brands, adding, “Many of our brand partners and licensees are also facing negative consequences as a result of Covid-19. We are closely working with our partners across the globe to provide a unique set of tools that will further the long-term potential of each of our brands and products. In the near term, we are expecting a downturn in revenue consistent with our entire industry.

Review of Apex’s Q4 and full year performance

The company said in a statement that year-over-year decline in fourth quarter revenues reflects the non-renewal of Apex’s Cherokee license in South Africa and its Tony Hawk license in Canada. Hi-Tec and Magnum royalty revenues also declined internationally, primarily due to the uncertainty surrounding Brexit and exchange rate fluctuations.

The company added that full year revenues were also impacted by the non-renewal of the Cherokee license in South Africa and the disposition of the company’s Flip Flop Shops franchise business in June 2018. The company added that Apex’s revenues were further impacted by higher tariffs in the U.S. and reduced royalties from the company’s licensees in Europe. These decreases were partially offset by having a full year of revenues from the company’s design services agreement with a retailer in China.

Apex’s operating loss for the fourth quarter of Fiscal 2020 totalled 3.3 million dollars compared to operating income of 2.4 million dollars in the prior-year period, while operating loss for the full year was 4.9 million dollars compared to operating income of 1.9 million dollars for fiscal 2019.

Adjusted EBITDA decreased to 2.4 million dollars for the fourth quarter from 3.1 million dollars in the prior year and adjusted EBITDA for fiscal 2020 decreased to 7.8 million dollars from 9.8 million dollars for fiscal 2019.

Picture:Facebook/Cherokee USA