Iconix Brand Group’s (ICON) specialty retail apparel sector has always been in demand from the consumers. However, it is grappling with the recession as macroeconomic headwinds are causing consumers to increase savings and defer new purchases. Consumers are trading down to cheaper alternatives or heavily discounted merchandise.
Further, management lowered its guidance, reflecting dilution related to the company’s equity offering and the negative impact related to the transition of the Rocawear women’s license to a new licensee. Therefore, we lowered our rating on the stock to Underperform, until we see any catalyst to trigger the company’s growth trajectory.Zacks Investment Research
