Xcel Brands (XELB) Wholesale Pivot Is Beginning To Pay Off - DA Davison

DA Davidson analyst, Michael Kawamoto, reiterated his Buy on Xcel Brands (NASDAQ: XELB) and cut his price target to $4.00 (from $5.00) after the company reported 4Q18 revenue and adjusted
EPS of $9.9M and $0.05, ahead of the analyst's estimates of $7.6M and $0.05. Revenue grew 41.8%, reflecting $6.7M in licensing revenue and $3.2M in wholesale sales. Total operating expenses increased 17.6% (78.9% of sales vs. 95.2% in 4Q17), leading to an adjusted EBITDA of $1.7M (vs. $1.4M in 4Q17).

The analyst stated "The wholesale department store business launched in November, and the boosted economics for XELB became immediately apparent, as the capture of sales in this segment was a large driver of the revenue acceleration. We expect this business to continue to ramp over the next several years. Management also noted good visibility into fall orders, which bodes well for revenue acceleration in 2H19".

For an analyst ratings summary and ratings history on Xcel Brands click here. For more ratings news on Xcel Brands click here.

Shares of Xcel Brands closed at $1.60 yesterday.

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