Earnings Preview: PLBY Group Q2

The lifestyle company PLBY Group (PLBY) is scheduled to report second-quarter 2021 earnings on August 10.

PLBY Group is the owner of the Playboy consumer brand, which is regarded as one of the world’s most recognizable and famous brands.

Over the past year, the shares of the company were up 165.7%, trading today above $26. Solid Q2 results might propel the stock price upward, so let’s take a closer look at what analysts on the Street are expecting.

Q2 Expectations

For Q2, the Street expects PLBY Group to report a loss of $0.01 per share and revenues of $46.90 million. (See PLBY Group Dividend Date and History on TipRanks)

PLBY Group’s Prior Quarter Snapshot

PLBY Group recorded strong revenues in the last-reported first quarter, but a wider loss as compared to the year-ago period.

Total revenues came in at $42.7 million, an increase of 34% year-over-year. The increase was driven by a 114% year-on-year growth in direct-to-consumer revenues.

However, the company’s net losses widened to $5 million in Q1 versus a loss of $2.4 million in the same quarter last year. Higher expenses during the quarter contributed to the loss.

Factors to Note

PLBY Group is well-positioned to continue to deliver strong results in the upcoming quarter, driven by strength in the company’s direct-to-consumer business (D2C) and growth prospects in the non-fungible token (NFT) space.

To simplify the term, NFTs are digital assets like art, music, or videos developed with blockchain technology. Each NFT has a unique digital signature, making it difficult to swap NFTs for one another.

In the first quarter, the direct-to-consumer business grew triple-digit year-over-year growth to 114%, driven by improvements at both Yandy and Playboy e-commerce websites. Also, the March acquisition of a retail chain – Lovers – aided the growth.

PLBY Group has been working to increase its direct-to-consumer business in the United States. In this regard, the firm has been adding new in-house created garment lines to its inventory. The enhanced portfolio will help the company to increase its customer base, thereby contributing to PLBY Group’s top-line growth in the upcoming quarter.

Investors should be aware that, as customers return to stores, the company anticipates direct-to-consumer sales to further improve in the second quarter.

Secondly, the company’s NFT prospects remain worth mentioning. In April, PLBY Group’s Playboy entered this NFT market by teaming up with Nifty Gateway, an all-in-one platform for the sale and purchase of NFTs.

As a result of the above-mentioned collaboration, Playboy x Slimesunday art was launched, which featured original artwork created by Slimesunday in collaboration with Playboy’s editors and curators of its archives.

Notably, the art generated sales of approximately $1 million in 24 hours, including a single piece that was sold for $250,000 in Q1.

Again in July, PLBY Group announced a partnership with SuperRare, the NFT digital art marketplace, in order to expand prospects in the NFT arena. The agreement allowed the company to exhibit and sell a collection of NFTs, including pieces by Jon Noorlander and MBSJQ, Ayla El-Moussa, and REK0DE.

In the last earnings call, PLBY Group CEO Ben Kohn said, “We’re thrilled by the recent performance of our first NFT art drop, a symbol of the infinite product experiences we can build off the back of our iconic flagship brand and rich archive. We are in the early innings of unlocking the tremendous potential of our intellectual property and global fan base and remain focused on investing today in opportunities to drive superior long-term growth and deliver substantial long-term value for our shareholders.”

Going forward, management remains quite optimistic about the company’s future prospects in the rapidly expanding NFT market. It plans to release new innovative digital products based on blockchain technology as well as AR/VR processing skills.

It is interesting to note that the company is also eyeing the Indian online gaming industry, which is anticipated to grow to $2.8 billion by 2022 at a CAGR of 40%, per recent reports from Deloitte.

In this regard, the company recently partnered with a software platform provider, Gaming Technologies, to launch a new Playboy-branded real-money Rummy mobile game to the Indian market.

Investors would like to learn more about the company’s international plans, including its recent foray into India and other regions.

Analyst Recommendations

On June 29, PLBY Group agreed to acquire lingerie and lifestyle brand Honey Birdette in a cash and stock deal worth $330 million.

Post the Honey Birdette deal announcement, Canaccord Genuity analyst Austin Moldow reiterated a Buy rating on the stock with a price target of $52. This implies 95.7% upside potential to current levels.

Moldow is of the opinion that Honey Birdette acquisition will expand PLBY Group’s presence in the lingerie market. The analyst commented, “HB acquisition is being made at an attractive price for an existing revenue base, decently known brand, and superb design and merchandising capabilities.”

Further, Moldow expects the deal to be financially accretive to the company’s financials. He, therefore, raised his “revenue estimates by over 40%” and “adjusted EBITDA estimates by over 50% in 2022 and 2023.”

Overall, consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average PLBY price target of $51.33 implies 93.2% upside potential from the current levels.

TipRanks data shows that financial blogger opinions are 75% Bullish on PLBY, compared to a sector average of 69%.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.