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Iconix Brand Group Inc.

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Iconix reported mixed fourth-quarter 2016 results, where earnings beat the Zacks Consensus Estimate but revenues lagged the same. Earnings soared 153.3% from the year-ago level, mainly due to higher operating income and improved margins, however, revenues declined 8% from the prior-year quarter, despite favorable impact from currency. We note that Iconix has delivered sluggish results since 2015. In fact, Iconix’s shares have been underperforming the Zacks-categorized industry since the past few years. Though the company believes in its strong brands and growth strategy, we note that it is currently facing serious issues. The company has been witnessing sluggishness in the women's and men's segments in the eight straight quarters. Also, it expects other headwinds like higher expenses and transition costs to hamper its profitability. The company is also looking for selling its brands, signalling that the company is not in good shape.

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