Core Viewpoint - Xcel Brands, Inc. reported a significant decline in revenue for the second quarter of 2025, primarily due to the divestiture of the Lori Goldstein brand, while the company is focusing on strengthening its balance sheet and launching new creator/influencer brands in the near future [2][3][5]. Financial Results - Total revenue for Q2 2025 was $1.3 million, a decrease of approximately $1.6 million (-55%) from Q2 2024, attributed to the decline in net licensing revenue following the divestiture of the Lori Goldstein brand [3][7]. - Direct operating costs and expenses decreased by approximately $1.2 million (-39%) year-over-year to $1.9 million, reflecting cost reductions and the impact of the employee retention tax credit [4][8]. - The net loss attributable to Xcel Brands stockholders for Q2 2025 was approximately $4.0 million, or $(1.66) per share, compared to a net income of $0.2 million, or $0.08 per share, in the prior year [5][11]. - Adjusted EBITDA for Q2 2025 was negative $0.3 million, compared to negative $0.04 million in the prior year, indicating a 45% year-over-year improvement when adjusting for the prior year’s contribution from the Lori Goldstein brand [6][12]. Year-to-Date Performance - For the six-month period ended June 30, 2025, total revenue was $2.7 million, a decrease of approximately $2.5 million (-48%) from the same period in 2024, again driven by the decline in net licensing revenue [7][11]. - The net loss attributable to Xcel Brands stockholders for the six months was approximately $6.8 million, or $(2.84) per share, compared to a net loss of $6.1 million, or $(2.78) per share, for the same period in 2024 [11][12]. - Year-to-date Adjusted EBITDA for 2025 was negative $1.0 million, an improvement from negative $1.6 million for the first six months of 2024, representing a 38% improvement [9][12]. Balance Sheet and Financing - As of June 30, 2025, the company had stockholders' equity of approximately $22.5 million, unrestricted cash and cash equivalents of approximately $1.0 million, and long-term debt of $11.8 million [13][29]. - In August 2025, Xcel closed a public equity offering and a concurrent private placement for combined gross proceeds of approximately $2.6 million, enhancing the company's liquidity [14]. Social Media and Brand Development - The company's social media following increased from 5 million to 43 million in Q2 2025, reflecting the impact of new influencer brand announcements [9]. - Xcel Brands is focused on developing new creator/influencer brands, with planned launches starting later this year and into 2026 [2].

Core Insights - Xcel Brands, Inc. has announced a strategic licensing partnership with TSC Product Lab to launch a new food brand, Mesa Mia by Jenny Martinez, inspired by Latin cooking traditions [1][2][3] Company Overview - Xcel Brands, Inc. is a media and consumer products company engaged in various sectors including design, licensing, marketing, and social commerce sales of branded products [6] - The company was founded in 2011 and has generated over $5 billion in retail sales through livestreaming and digital channels [6] - Xcel's brand portfolio includes well-known names such as Halston and Judith Ripka, and it has a significant social media presence with over 43 million followers [6] Product Launch Details - Mesa Mia by Jenny Martinez will feature a curated line of food products including chips, salsas, proteins, meals, and drink mixes aimed at making Latin cooking accessible [2][5] - The collaboration combines Xcel's brand development expertise with TSC Product Lab's product innovation capabilities [2] Brand and Creator Background - Jenny Martinez is a Latina home cook and social media influencer known for sharing authentic Mexican recipes, which resonate with a large audience [4][9] - Her first cookbook, "My Mexican Mesa, Y Listo!" debuted in Spring 2024, featuring 100 family-style recipes [9] - Jenny has also launched a line of cookware and dinnerware at over 600 department stores and a spice line available in grocery stores [9] Strategic Vision - The partnership aims to inspire families across the country by bringing the joy of Latin cooking into their homes [3][5] - The initiative reflects Xcel Brands' commitment to developing creator-led businesses that align with contemporary cooking and celebration practices [5]

Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were $1.2 million and $8.3 million for the full fiscal year, roughly half of the prior year due to the sale of the Lori Goldstein brand and exit from wholesale operations [14] - Total revenues for Q1 2025 were $1.3 million, a slight increase from Q4 2024 [14] - Adjusted EBITDA loss for Q4 2024 was $792,000, an improvement of $361,000 from Q4 2023 [13] - The company reported a net loss of approximately $2.8 million for Q1 2025, a 56% improvement on a GAAP basis compared to the prior year [19] Business Line Data and Key Metrics Changes - The company has reduced direct operating costs and expenses by nearly 50% year over year from FY 2023 to FY 2024 [15] - Direct operating expenses for Q1 2025 were approximately $2.3 million, about 40% lower than the prior year [16] - The Longeberger brand is set to launch on QVC in the fall, and the Ormy team has onboarded 25 premium beauty brands [12] Market Data and Key Metrics Changes - Social media reach across the brand portfolio grew from 5 million followers in January 2025 to 45 million [10] - The company aims to build a portfolio of creator influencer brands that reaches 100 million followers [12] Company Strategy and Development Direction - The strategic transaction with United Trademark Group aims to enhance global distribution and product quality [9] - The company is focusing on creator influencer brands, with new launches expected to drive growth [10] - Management is cautious about Q3 and Q4 due to potential impacts from tariffs and operational consolidations [11] Management's Comments on Operating Environment and Future Outlook - Management is assessing the impact of tariffs and the HSN Tampa studio closure on business operations [13] - The company forecasts adjusted EBITDA for 2025 to be between $1 million and $2.5 million, factoring in potential disruptions [23] - Management believes that influencer brands are the new currency in media, particularly with credible voices in their categories [31] Other Important Information - The company has a balance sheet reflecting stockholders' equity of approximately $26 million and unrestricted cash of about $300,000 as of March 31, 2025 [20] - The company refinanced its term debt, resulting in a net increase of approximately $3 million in liquidity [20] Q&A Session Summary Question: Clarification on adjusted EBITDA for 2025 - Management confirmed that the adjusted EBITDA forecast includes potential impacts from tariffs and operational disruptions [23] Question: Run rate of operating costs - The run rate for overhead costs is approximately $9 million annually, translating to less than $2.5 million per quarter [24][25] Question: Liquidity needs for upcoming brand launches - Management stated that current liquidity is sufficient, but they will address any additional capital needs as they arise [28] Question: Revenue potential of recently launched brands - Management indicated that brands like Cesar Millan have the potential to generate between $5 million and $10 million in royalty income per year [47] Question: Operating expenses as the business pivots to growth - Management noted that the structure is designed to scale, with incremental costs primarily tied to revenue growth [49][50] Question: Revenue expectations for Q2 - Management expressed confidence in Q2 performance but will report any significant impacts as they arise [52]

Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were $1.2 million and for the full fiscal year 2024 were $8.3 million, both approximately half of the prior year due to the sale of the Lori Goldstein brand and exit from wholesale operations [13][14] - Total revenues for Q1 2025 were $1.3 million, showing a slight increase from Q4 2024 [13] - The company reported a net loss of approximately $2.8 million for Q1 2025, an improvement from a loss of $6.3 million in the prior year quarter, representing a 56% improvement on a GAAP basis [18] - Adjusted EBITDA for Q1 2025 was negative $700,000, a 56% improvement over the negative $1.6 million reported in the prior year quarter [18] Business Line Data and Key Metrics Changes - The company has significantly reduced direct operating costs and expenses by nearly 50% year over year from FY 2023 to FY 2024 [14] - Direct operating expenses for Q1 2025 were approximately $2.3 million, about 40% lower than the prior year period [14] - The company generated an adjusted EBITDA loss of $792,000 in Q4 2024, which is a $361,000 improvement over Q4 2023 [12] Market Data and Key Metrics Changes - The social media reach across the brand portfolio grew from 5 million followers in January 2025 to 45 million to date, indicating a significant increase in media currency [9] - The company aims to build a portfolio of creator influencer brands that reaches 100 million followers, which is expected to accelerate growth [11] Company Strategy and Development Direction - The company closed a strategic transaction with United Trademark Group in April 2025, enhancing its brand management and supply chain capabilities [7] - The partnership with UTG is expected to accelerate the formation of additional creator influencer brands [8] - The company is focusing on acquiring brands with significant social media followings and media companies to extend its reach [34] Management's Comments on Operating Environment and Future Outlook - Management expressed caution for Q3 and Q4 2025 due to potential impacts from tariffs and the consolidation of HSN's operations [10] - The company is assessing the impact of tariffs and the HSN Tampa studio closure and is working on potential solutions, including short-term domestic production [12] - Management forecasts adjusted EBITDA for 2025 to be in the range of $1 million to $2.5 million, including potential impacts from tariffs and operational disruptions [21] Other Important Information - The company reported stockholders' equity of approximately $26 million and unrestricted cash of approximately $300,000 as of March 31, 2025 [19] - The company refinanced its term debt in April 2025, resulting in a net increase of approximately $3 million in liquidity [19] Q&A Session Summary Question: Clarification on adjusted EBITDA for 2025 - Management confirmed that the adjusted EBITDA forecast includes potential impacts from tariffs and disruptions due to HSN's relocation [21] Question: Run rate of operating costs - The run rate for operating costs is approximately $9 million annually, translating to less than $2.5 million per quarter [23][24] Question: Guarantees from G III on Halston - The guaranteed minimum under the license is $1.7 million per year, with expectations for a slight pickup in Q2 [25] Question: Liquidity needs for upcoming launches - Management indicated that current liquidity is sufficient, but they will address any additional capital needs as they arise [26][27] Question: Revenue potential from new brands - Management anticipates that new brands like Cesar Millan's pet products could generate between $5 million and $10 million in royalty income per year [46] Question: Operating expenses as the business pivots to growth - The structure is designed to scale, with incremental costs primarily tied to revenue growth [47][48]