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Wednesday, June 23, 2021

Here is why XCel Brands Inc. (XELB) stock rallied on Monday, April 5, 2021

XCel Brands Inc. (XELB) stock rallied on Monday, April 5, 2021. It gained 51.27% in the morning session but it lost 4.70% in the extended trading session.


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Let’s try to find out the reasons behind the mix trends about XELB stock.

Acquisition of Logo

On April 5, 2021, XCel brands announced the acquisition of Logo by Lori Goldstein, to expand its brand portfolio.

There are no other details released about the acquisition. Xcel’s portfolio now has six brands including Isaac Mizrahi, Judith Ripka, Halston, C. Wonder and Longaberger.

Logo by Lori Goldstein launched in 2009 and has generated more than $1.5 billion in sales throughout its history.

Longaberger team Expansion

On March 1, 2021, Longaberger announced the team expansion and announced the appointment of Scott Halversen as President of Sales.

In 2019, Xcel Brands acquired The Longaberger Company which was founded by Dave Longaberger in 1973.  The company is famous for handcrafted products such as handmade maple baskets and other home products. Xcel Brands launched Longaberger with a new digital social selling business model.

LIVE Selling Platform

On February 4, 2021, Longaberger announced the launch of Longaberger LIVE, which is a new live streaming platform providing access to buy exclusive timeless and modern home décor and better lifestyle products to its viewers.

Financial results

On November 13, 2020, XELB announced its financial results for the third quarter endedSeptember 30, 2020. The company hasn’t announced the Q4 and fiscal year 2020 results yet.

Financial highlights of third-quarter 2020

  • For the reported quarter, total revenue was$7.4 million.
  • XELB suffered a net loss of approximately $0.5 million, or ($0.02) per diluted share for 3Q 2020, compared with a GAAP net loss of $0.1 million, or $0.01 per diluted share, for the prior-year quarter.
  • Adjusted EBITDA was approximately $1.4 million for Q3, 2020 compared with  $1.8 million in 3Q 2019.
  • GAAP net income for the quarters ended September 30, 2020, was $0.8 million, or $0.04 per diluted share compared with $1.2 million, or $0.06 per diluted share for 3Q 2019.

Financial highlights for Nine-Months 2020 

  • For the nine months ended September 30, 2020, XELB revenue was$22.0 million
  • Gross profit was $18.0 million for the first 9 months of 2020 compared to $23.8 million in the same period of 2019.
  • XELB suffered a GAAP net loss of $2.6 million, or ($0.13) per diluted share, compared to GAAP net income of $1.9 million, or $0.10 per diluted share, for the prior year nine-months.
  • Non-GAAP net income was$2.1 million, or $0.11 per diluted share for the nine months ended September 30, 2020, compared with $3.8 million, or $0.20 per diluted share for the same period on 2019
  • Adjusted EBITDA was approximately $3.9 million and $5.6 million for the current nine months and the prior year nine months, respectively.
  • As of September 30, 2020, the company had equity of approximately $97 million, cash and cash equivalents of approximately $4.8 million, and working capital, exclusive of the current portion of lease obligations, of approximately $8.7 million.

Conclusion

The recent acquisition of Logo was the reason behind the surge of XELB stock on Monday. It may continue this momentum in the coming days.

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