Playboy beats estimates, bets $5M on Miami members club
What's the deal? PlayboyDealroom has a profile for this one. Try Dealroom →'s third-quarter revenue rose 9.4% to $31.7 million, beating estimates by $1.35 million, and the company posted a profit of $0.02 per share versus breaking even a year earlier. Shares moved higher in Friday's premarket trading.
Why the beat? Growth came from continued strength in the Honey BirdetteDealroom has a profile for this one. Try Dealroom → apparel and lifestyle line, higher licensing royalties from China, and increased magazine and paid-voting revenue. Direct-to-consumer revenue climbed 12% and licensing revenue rose 5.3%.
By the numbers: Adjusted EBITDA nearly doubled from a year ago to $7.9 million, with margin expanding 1,100 basis points to 25%. It marked a seventh straight quarter of positive adjusted EBITDA.
What's the endgame? Playboy acquired a Miami Beach property for a new members club, committing about $5 million of balance sheet cash. The company expects to recoup that entirely through membership sales.
Why now? Given the potential licensing revenue and profit-share opportunity in the property, Playboy sees the club as a better short-term use of cash than the share repurchases it had previously considered. Think HospitalityDealroom has a profile for this one. Try Dealroom → and Infinity CollectiveDealroom has a profile for this one. Try Dealroom → will also invest in the development, chief executive officer Ben Kohn told analysts.
What could go wrong? The acquisition has not yet closed, and the timing of membership sales is unclear. Execution will determine whether the concept becomes a repeatable, licensable business or a one-off capital commitment.
The signal: The Miami club is a test of Playboy's plan to extend its brand into hospitality while staying asset-light. If membership sales cover the upfront cost, the model could be licensed elsewhere.
Read more: msn.com
Image credit: Phillip Pessar
