iMedia Brands Q2 Revenue Disappoints; Shares Plunge 7.6%

iMedia Brands, Inc. (IMBI) delivered disappointing second-quarter revenue due to delays in inventory receipts arising from industry-wide container shortages and congestion delays at U.S. ports. Shares plunged 7.6% on the news, closing at $6.11 on August 24.

Don't Miss our Black Friday Offers:

Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

IMBI is a multichannel electronic retailer that markets, sells, and distributes products to consumers through television, online, mobile, and social media. (See iMedia Brands stock charts on TipRanks)

Net sales for the quarter declined 9% year-over-year to $113.44 million and fell short of analysts’ estimates of $121 million. Sales took a hit due to inventory receipt delays caused by short-term logistics challenges.

Moreover, iMedia reported a loss of $0.22 per share, a cent better than the Street’s estimated loss of $0.23. In the year-ago period, IMBI reported earnings of $0.11 per share.

On a positive note, on July 30, IMBI completed the acquisition of Synacor’s Portal and Advertising business segment. The company has relaunched it as iMedia Digital Services (“iMDS”) and will offer its OTT App platform, Float Left, as one of its products, making it online publishers’ most trusted video advertising platform.

Commenting on the company’s performance, Tim Peterman, the company’s CEO, said, “Strategically, our goal remains the same – to scale our television networks and consumer brands while improving our digital services offerings because we believe those successes will continue to accelerate our timeline to becoming the leading single-source partner to brands and advertisers seeking to entertain and transact with customers using interactive video.”

Looking ahead at the third quarter, IMBI guided for net sales of $127 million. Additionally, for the full year 2021, the company increased its expected net sales projection to $502 million, marginally higher than the consensus estimate of $497 million.

Following the second-quarter results, B.Riley Financial analyst Eric Wold reiterated a Buy rating on the stock with a price target of $22, implying 260% upside potential to current levels.

Wold said, “Given our belief that the port congestion will be resolved and management can now more efficiently pivot the programming around this issue, we came away from the call increasingly confident in both the integration efforts with the Christopher & Banks brand and the opportunity to offer a single-source platform for advertisers and consumer brands looking to utilize valuable first-party data and interactive video to reach customers—something that we believe remains lost on investors at the current valuation.”

The stock has a Moderate Buy consensus rating based on 2 unanimous Buys. The average iMedia Brands price target of $20.50 implies a whopping 235.5% upside potential to current levels. Shares have lost 19.2% over the past year.