Given apparel and accessories maker PLBY Group (NASDAQ:PLBY) is perhaps most famous for the magazine of the same name—which can be assembled by adding a few vowels—you’d think it would be a sterling example of a recession-proof industry. That wasn’t the case, however, as PLBY Group found itself down over 5% in Thursday afternoon’s trading, thanks largely to its earnings report. Worse, that represents a major rally from its deepest losses that day.
Easily, the worst part of the earnings report that emerged was the actual earnings, which came in at a loss of $1.79 per share. Analysts were expecting a loss of just $0.16 per share, which means the actual loss was about 11 times greater than what analysts looked for. Revenue didn’t fare much better, coming in at $35.1 million against analyst expectations calling for $48.86 million. Worse, the $35.1 million figure represented a drop of 27% against the second quarter of 2022.
So, what happened? How do you produce a loss more than 10 times what analysts expect? Several factors hit PLBY Group hard here; a wind-down from playboy.com e-commerce operations, as well as some Chinese joint ventures, hit earnings hard. Ongoing moves toward what it describes as a “capital-light model” are still working, as well as its ongoing efforts to augment its “creator platform” are still in progress, though not exactly contributing a lot to the bottom line as yet. But with over 2.6 million registered users on its creator platform—up from 1.9 million at the end of the last quarter—there may be a future in it after all.
A look at the last five days in trading for PLBY Group shows that the trouble didn’t start today and it likely won’t end today either. Shares were already on a downward slope until the earnings report hit and triggered a near-vertical drop. A rally followed, which helped, but it’s still not back to where PLBY Group stock was trading at even yesterday.
