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World Wrestling (WWE) Q1 Earnings Beat, Revenues Up Y/Y
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World Wrestling Entertainment, Inc. posted first-quarter 2022 results, wherein the top line missed the Zacks Consensus Estimate, but the bottom line beat the same. Impressively, both revenues and earnings grew sharply from the year-ago period. The quarterly performance gained from a return to full live events, including the staging of a large-scale international event, expanded brand reach and enhanced content value, as well as monetization of new original series.
Management reiterated its expectations to generate record revenues in 2022, backed by ticketed live events, including the staging of large-scale international events and increased monetization of content. The company cautioned against a spike in production, content-related, and other expenses.
During the quarter, the company expanded its original programming partnership with A&E in a multi-year deal that includes more than 130 new hours of premium WWE-themed series and specials. It entered into a broadcast partnership with MBC Group to air WWE premium live events, live episodes of Raw and SmackDown, as well as WWE Network’s vast library of content. It announced a long-term partnership with Fanatics to create a new, enhanced digital platform for e-commerce and licensed merchandise, as well as physical, digital, and non-fungible token trading cards.
Q1 Performance Insights
This Stamford, CT-based company reported first-quarter 2022 earnings of 77 cents a share that surpassed the Zacks Consensus Estimate of 68 cents. The quarterly earnings increased significantly from 51 cents a share reported in the prior-year quarter.
WWE’s revenues of $333.4 million missed the Zacks Consensus Estimate of $340.9 million. However, the top line surged 27% year over year, driven by the timing of a large-scale international event and higher ticket sales. These were partly offset by a decline in network revenues owing to the impact of upfront revenue recognition in the year-ago period related to the delivery of certain WWE Network intellectual property rights.
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise
WWE’s operating income of $92.4 million jumped 42% year on year, buoyed by higher revenues but partly offset by increased operating expenses due to the return to live event touring, including the timing of a large-scale international event. We note that operating income margin increased to 28% from 25% in the year-ago quarter.
Adjusted OIBDA came in at $111.7 million, up 33% year on year. Again, adjusted OIBDA margin expanded to 34% from 32% reported in the prior-year quarter.
Segmental Details
Media Division: Revenues in the Media division went up 15% to $278.1 million, mainly owing to the timing of a large-scale international event and a rise in domestic media rights fees related to the flagship programs and premium events. These were partly offset by the upfront revenue recognition in the year-ago period related to the delivery of certain WWE Network intellectual property rights.
Revenues from core content rights fees increased to $141.5 million from $139.7 million in the prior-year period. Network revenues were down to $56.3 million from $79.4 million reported in the year-ago quarter. Advertising and sponsorship revenues rose to $19.8 million from $15.6 million in the year-ago period. Other media revenues surged to $60.5 million from $7.3 million in the prior-year period.
Live Events: Revenues from Live Events came in at $23.1 million, up meaningfully from $0.5 million in the year-ago quarter. The upside can be attributed to higher ticket sales as the company returned to staging live ticketed events. It held 53 ticketed live events in the reported quarter, consisting of 52 events in North America and one event in the international markets. Average attendance at the North America events was roughly 5,700.
Consumer Products Division: The segment’s revenues of $32.2 million advanced 53% year on year. The rise in sales of the licensed video games, including the franchise game WWE 2K22, and increased venue merchandise sales owing to the return to ticketed live events contributed to the segment’s revenues. These were somewhat offset by lower e-commerce merchandise sales.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $105.6 million, net short-term investments of $342.2 million, long-term debt of $21.2 million and stockholders’ equity of $405.8 million.
Cash flow generated from operating activities during the quarter amounted to $95.5 million, while free cash flow was $74 million.
The company paid out $38.9 million to shareholders in the first quarter. This includes $30 million in share repurchases as well as $8.9 million in dividends paid. As of Mar 31, 2022, the company had approximately $221 million remaining under its share repurchase authorization of $500 million.
Outlook
For 2022, WWE reaffirmed its adjusted OIBDA projection of $360-$375 million. Management guided second-quarter adjusted OIBDA in the range of $80 million to $90 million, which indicates 17-32% year-over-year growth. The upbeat guidance suggests stellar revenue performance owing to the return to live event touring and the contractual escalation of domestic media rights fees for the flagship programs and premium events. Management expects higher operating expenses in the second quarter.
This Zacks Rank #2 (Buy) stock has risen 13.2% in the past three months against the industry’s decline of 15.4%.
G-III Apparel designs, sources and markets apparel and accessories under owned, licensed and private label brands. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for G-III Apparel’s current financial year revenues and EPS suggests growth of 10% and 5.4%, respectively, from the year-ago reported figure. G-III Apparel has a trailing four-quarter earnings surprise of 160.6%, on average.
Steven Madden is a leading designer and marketer of fashion-forward footwear, accessories and apparel for women, men and children. The stock currently flaunts a Zacks Rank #1.
The Zacks Consensus Estimate for Steven Madden’s current financial year revenues and EPS suggests growth of 15.2% and 19.6%, respectively, from the year-ago reported figure. SHOO has a trailing four-quarter earnings surprise of 44%, on average.
Planet Fitness, one of the largest and fastest-growing franchisors and operators of fitness centers in the United States, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 0.3%, on average.
The Zacks Consensus Estimate for PLNT’s current financial year revenues and EPS suggests growth of 56% and 85.4%, respectively, from the year-ago period. Planet Fitness has an expected EPS growth rate of 20% for three-five years.
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World Wrestling (WWE) Q1 Earnings Beat, Revenues Up Y/Y
World Wrestling Entertainment, Inc. posted first-quarter 2022 results, wherein the top line missed the Zacks Consensus Estimate, but the bottom line beat the same. Impressively, both revenues and earnings grew sharply from the year-ago period. The quarterly performance gained from a return to full live events, including the staging of a large-scale international event, expanded brand reach and enhanced content value, as well as monetization of new original series.
Management reiterated its expectations to generate record revenues in 2022, backed by ticketed live events, including the staging of large-scale international events and increased monetization of content. The company cautioned against a spike in production, content-related, and other expenses.
During the quarter, the company expanded its original programming partnership with A&E in a multi-year deal that includes more than 130 new hours of premium WWE-themed series and specials. It entered into a broadcast partnership with MBC Group to air WWE premium live events, live episodes of Raw and SmackDown, as well as WWE Network’s vast library of content. It announced a long-term partnership with Fanatics to create a new, enhanced digital platform for e-commerce and licensed merchandise, as well as physical, digital, and non-fungible token trading cards.
Q1 Performance Insights
This Stamford, CT-based company reported first-quarter 2022 earnings of 77 cents a share that surpassed the Zacks Consensus Estimate of 68 cents. The quarterly earnings increased significantly from 51 cents a share reported in the prior-year quarter.
WWE’s revenues of $333.4 million missed the Zacks Consensus Estimate of $340.9 million. However, the top line surged 27% year over year, driven by the timing of a large-scale international event and higher ticket sales. These were partly offset by a decline in network revenues owing to the impact of upfront revenue recognition in the year-ago period related to the delivery of certain WWE Network intellectual property rights.
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise
World Wrestling Entertainment, Inc. price-consensus-eps-surprise-chart | World Wrestling Entertainment, Inc. Quote
A Look Into Margins
WWE’s operating income of $92.4 million jumped 42% year on year, buoyed by higher revenues but partly offset by increased operating expenses due to the return to live event touring, including the timing of a large-scale international event. We note that operating income margin increased to 28% from 25% in the year-ago quarter.
Adjusted OIBDA came in at $111.7 million, up 33% year on year. Again, adjusted OIBDA margin expanded to 34% from 32% reported in the prior-year quarter.
Segmental Details
Media Division: Revenues in the Media division went up 15% to $278.1 million, mainly owing to the timing of a large-scale international event and a rise in domestic media rights fees related to the flagship programs and premium events. These were partly offset by the upfront revenue recognition in the year-ago period related to the delivery of certain WWE Network intellectual property rights.
Revenues from core content rights fees increased to $141.5 million from $139.7 million in the prior-year period. Network revenues were down to $56.3 million from $79.4 million reported in the year-ago quarter. Advertising and sponsorship revenues rose to $19.8 million from $15.6 million in the year-ago period. Other media revenues surged to $60.5 million from $7.3 million in the prior-year period.
Live Events: Revenues from Live Events came in at $23.1 million, up meaningfully from $0.5 million in the year-ago quarter. The upside can be attributed to higher ticket sales as the company returned to staging live ticketed events. It held 53 ticketed live events in the reported quarter, consisting of 52 events in North America and one event in the international markets. Average attendance at the North America events was roughly 5,700.
Consumer Products Division: The segment’s revenues of $32.2 million advanced 53% year on year. The rise in sales of the licensed video games, including the franchise game WWE 2K22, and increased venue merchandise sales owing to the return to ticketed live events contributed to the segment’s revenues. These were somewhat offset by lower e-commerce merchandise sales.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $105.6 million, net short-term investments of $342.2 million, long-term debt of $21.2 million and stockholders’ equity of $405.8 million.
Cash flow generated from operating activities during the quarter amounted to $95.5 million, while free cash flow was $74 million.
The company paid out $38.9 million to shareholders in the first quarter. This includes $30 million in share repurchases as well as $8.9 million in dividends paid. As of Mar 31, 2022, the company had approximately $221 million remaining under its share repurchase authorization of $500 million.
Outlook
For 2022, WWE reaffirmed its adjusted OIBDA projection of $360-$375 million. Management guided second-quarter adjusted OIBDA in the range of $80 million to $90 million, which indicates 17-32% year-over-year growth. The upbeat guidance suggests stellar revenue performance owing to the return to live event touring and the contractual escalation of domestic media rights fees for the flagship programs and premium events. Management expects higher operating expenses in the second quarter.
This Zacks Rank #2 (Buy) stock has risen 13.2% in the past three months against the industry’s decline of 15.4%.
3 More Hot Stocks in Consumer Discretionary Space
Here we highlight three other top-ranked stocks, namely, G-III Apparel (GIII - Free Report) , Steven Madden (SHOO - Free Report) and Planet Fitness (PLNT - Free Report) .
G-III Apparel designs, sources and markets apparel and accessories under owned, licensed and private label brands. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for G-III Apparel’s current financial year revenues and EPS suggests growth of 10% and 5.4%, respectively, from the year-ago reported figure. G-III Apparel has a trailing four-quarter earnings surprise of 160.6%, on average.
Steven Madden is a leading designer and marketer of fashion-forward footwear, accessories and apparel for women, men and children. The stock currently flaunts a Zacks Rank #1.
The Zacks Consensus Estimate for Steven Madden’s current financial year revenues and EPS suggests growth of 15.2% and 19.6%, respectively, from the year-ago reported figure. SHOO has a trailing four-quarter earnings surprise of 44%, on average.
Planet Fitness, one of the largest and fastest-growing franchisors and operators of fitness centers in the United States, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 0.3%, on average.
The Zacks Consensus Estimate for PLNT’s current financial year revenues and EPS suggests growth of 56% and 85.4%, respectively, from the year-ago period. Planet Fitness has an expected EPS growth rate of 20% for three-five years.