(Filed Under wholesale Lingerie News). In the first quarter, Playboy earned $5.543 million on sales of $69.378 million, compared to a loss of $4.997 million on sales of $42.680 million in the same period last year.
Major factors in the jump in sales were the inclusion of Honey Birdette, the acquisition of which the company completed last August; and the Lovers retail chain, the acquisition of which the company completed at the start of March, 2021.
CEO Ben Kohn boasted that, “our strong first quarter, with 63% year-over-year growth, robust demand for our iconic brand and consumer products, and continued progress on our digital road map for Centerfold,” the firm’s new online platform, “are coming together into one cohesive Playboy ecosystem creating a flywheel driving long-term growth.”
During the call with analysts to discuss the results, company executives discussed Honey Birdette. Kohn said that the brand’s new store in Miami is “already one of our best performing, ranking third globally,” adding, “our next location will open in June in Stratford UK, and the team is hard at work to reach our expansion plans of 10 new locations by the end of 2022.”
CFO Lance Barton added that “Honey Birdette achieved over $22 million of revenue in the quarter, driven by 23% growth in e-commerce and 11% growth in brick and mortar. Sales in January and February were impacted by the Omicron variant, which was most noticeable around the busy Valentine’s Day buying season, but revenue picked up in March.”
Barton explained that the U.S. Honey Birdette stores (there are eight) are producing “somewhere around 40%” more revenue “on a per store basis than we’ve seen in Australia,” (where there are 48). But future launches will not be cheap. "A new store opening cost (is) around $600,000, $800,000 to open up in terms of upfront expense, but you’re able to recover that pretty quickly as these businesses scale.” He added, “we also see, usually, when you open a new store, it can contribute to a halo effect on the e-com side, because you get customers coming into the store, figuring out what size works for them, what products they like.”
“When we open these new stores, we’re really targeting 30% four-wall EBITDA margin. They’re able to get there pretty quickly."
He concluded, “We’re really optimistic about the growth prospects at Honey Birdette, particularly in the U.S. and in Europe and the U.K., because that we open these stores we just see tremendous demand.” Plans call for some new stores in the U.K. this year, but “most” in the U.S.
Turning to Yandy.com, Barton admitted the retailer “continues to face tough year-over-year comps given the significant growth achieved in the first 18 months after we acquired the business.” He pointed to sourcing problems. “We saw this last year, but unfortunately it hasn’t really gotten any better,” with “our top selling products consistently...sold out or out of stock, which really has an impact on their ability to continue selling. I think last year we saw, kind of, in the 15% to 25% range. We’ve seen that percent go up in some cases as high as 40% to 45% out of stock on our top-selling items.”
Barton also complained that “Lovers store traffic in the typically strong Valentine’s shopping season (was) similarly impacted by the Omicron variant along with weather related store closures and the Pacific Northwest, which led to a decline in store revenue, compared to Q1 of last year. We did, however, see meaningful growth in Lovers e-commerce.”
Finally, Barton noted that Playboy “licensing revenue of $14.5 million was a decrease of $1.1 million versus the prior year quarter.”
Looking ahead, Barton emphasized: “I want to reiterate that we continue to expect full-year revenue in 2022 to be approximately $350 million and adjusted EBITDA to be around $55 million.” The company reported just $1.2 million in adjusted EBITDA for the first quarter.
The CFO concluded, “We believe that we are well on our way to achieving our stated goal of $600 million of consumer product revenue by 2025.”
CEO Kohn is also expecting a bright future: “I want to reiterate my excitement and confidence in the unique business we are building as evidenced by my purchase of roughly $1 million of our stock a few weeks ago. While not linear the path forward is clear, it is going according to our plan.” — NM
The full earnings transcript can be found here: https://seekingalpha.com/article/4509819-plby-group-inc-plby-ceo-ben-kohn-on-q1-2022-results-earnings-call-transcript
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