Xcel(US:XELB)2025-11-19 23:02Financial Data and Key Metrics Changes - Net licensing revenues for Q3 2025 were $1.1 million, down from $1.5 million in Q3 2024, primarily due to cautious consumer spending and lower performance in the Halston license [14][15] - Adjusted EBITDA loss for Q3 2025 was approximately $653,000, representing a 38% improvement compared to a loss of $1 million in Q3 2024 [11][20] - The company reported a net loss of approximately $7.9 million for Q3 2025, or $2.02 per share, compared to a net loss of $9.2 million, or $3.92 per share in the prior year [19] Business Line Data and Key Metrics Changes - Direct operating costs for Q3 2025 were $2.2 million, down 23% from the prior year quarter, and year-to-date direct operating costs decreased by 36% to $6.3 million [15][16] - The Halston brand's performance has not met expectations, leading to adjustments in merchandising and design by G-III [12][19] Market Data and Key Metrics Changes - The company has seen a decline in licensing revenues year-to-date, with $3.8 million for the current nine-month period compared to $6.5 million in the prior year, largely due to the divestiture of the Lori Goldstein brand [15][16] - The social media reach across the brand portfolio is now 46 million, with a target of reaching 100 million followers by 2026 [10] Company Strategy and Development Direction - The company is focusing on leveraging new business opportunities with UTG, including sourcing products for retail partners and potential acquisitions [9] - Plans to launch five new influencer-led brands in 2026, diversifying into food, kitchen, home, and pet products, while transitioning supply chains to domestic production [10][40] - The company is cautious about Q4 2025 due to tariff impacts on QVC, HSN, and licensees [11] Management's Comments on Operating Environment and Future Outlook - Management believes the current macroeconomic environment poses risks but is optimistic about capitalizing on the shift from linear TV to digital streaming and social commerce [9] - The company anticipates sequential revenue growth in 2026 as new influencer brands come online and existing issues are resolved [40][42] Other Important Information - The company closed a $2 million net equity offering in Q3 2025, with $250,000 used to pay down a loan [8] - As of September 30, 2025, the company had stockholders' equity of approximately $17 million and unrestricted cash of approximately $1.5 million [22] Q&A Session Summary Question: Importance of hiring Olin Lancaster as Chief Revenue Officer - Management highlighted the significance of the hire, noting Lancaster's extensive experience and the long-standing relationship with the CEO [24] Question: Mitigating tariff impacts with domestic products - Management discussed the strategic focus on domestic sourcing for food and pet products to mitigate tariff risks [25][26] Question: Resolution of disruptions with Sea Wonder and Christie Brinkley - Management confirmed that the issues have been resolved, including vendor changes and programming challenges due to HSN's relocation [30] Question: Updates on product roadmap and brand rollouts - Management indicated that new products will start hitting the market in Q1 2026, with a focus on food products and pet accessories [32] Question: Revenue ramp expectations for the next 12 months - Management outlined a roadmap for launching new influencer brands and expanding into new categories to drive revenue growth [40][41] Question: Potential revenue outlook for 2026 - Management refrained from providing specific guidance but referenced analyst reports for potential revenue expectations [47] Question: Long-term revenue targets and brand potential - Management reaffirmed the potential for significant revenue growth from new brands, particularly in the pet and lifestyle sectors [51][52]