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Iconix Brand (ICON) Faces Investigation by a Law Firm
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New York-based Iconix Brand Group, Inc. (ICON - Free Report) has announced that Federman & Sherwood, a law firm is investigating potential claims against certain officers and directors of the company related to breaching of fiduciary duties. Last week, The Shuman Law Firm had started investigations against officers of the company.
We note that the company’s shares have been tumbling since the beginning of this year. Many firms have also filed a class action lawsuit against Iconix. In Dec 2015, the company announced that it has received a formal order of investigation from the U.S. Securities and Exchange Commission (‘SEC’), pertaining to some accounting treatment related to certain international joint venture transactions. It has been accused of misleading investors by underreporting the cost of its brands and overstating its earnings and revenues by engaging in irregular accounting practices related to the booking of its joint venture revenues and profits, free-cash flow, and organic growth.
Though the company restated its historical statements along with the fourth quarter 2015 results, these issues have adversely impacted growth.
Not only that, Iconix has delivered sluggish results throughout 2015 and in the first quarter of 2016. Both earnings and sales have declined year over year in the last five consecutive quarters due to sluggishness in the women's, men's and home segments. In the women's segment, the largest component of the decline was the wholesale business, with some pressure on the Rampage brand. There was continued weakness across the men's portfolio.
The company expects these issues to persist in 2016 and also anticipates higher expenses in the year.
Iconix currently holds a Zacks Rank #4 (Sell).
Some better-ranked stocks in the consumer discretionary sector include Carter's, Inc. (CRI - Free Report) , Sequential Brands Group, Inc. and Destination XL Group, Inc. (DXLG - Free Report) . All of them hold a Zacks Rank #2 (Buy).
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Iconix Brand (ICON) Faces Investigation by a Law Firm
New York-based Iconix Brand Group, Inc. (ICON - Free Report) has announced that Federman & Sherwood, a law firm is investigating potential claims against certain officers and directors of the company related to breaching of fiduciary duties. Last week, The Shuman Law Firm had started investigations against officers of the company.
We note that the company’s shares have been tumbling since the beginning of this year. Many firms have also filed a class action lawsuit against Iconix. In Dec 2015, the company announced that it has received a formal order of investigation from the U.S. Securities and Exchange Commission (‘SEC’), pertaining to some accounting treatment related to certain international joint venture transactions. It has been accused of misleading investors by underreporting the cost of its brands and overstating its earnings and revenues by engaging in irregular accounting practices related to the booking of its joint venture revenues and profits, free-cash flow, and organic growth.
Though the company restated its historical statements along with the fourth quarter 2015 results, these issues have adversely impacted growth.
Not only that, Iconix has delivered sluggish results throughout 2015 and in the first quarter of 2016. Both earnings and sales have declined year over year in the last five consecutive quarters due to sluggishness in the women's, men's and home segments. In the women's segment, the largest component of the decline was the wholesale business, with some pressure on the Rampage brand. There was continued weakness across the men's portfolio.
The company expects these issues to persist in 2016 and also anticipates higher expenses in the year.
Iconix currently holds a Zacks Rank #4 (Sell).
Some better-ranked stocks in the consumer discretionary sector include Carter's, Inc. (CRI - Free Report) , Sequential Brands Group, Inc. and Destination XL Group, Inc. (DXLG - Free Report) . All of them hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>