Xcel Brands Q1 Earnings Call Highlights

Xcel Brands (NASDAQ:XELB) reported a wider strategic focus on influencer-led brands during its first-quarter 2026 earnings call, while management said a supplier transition weighed on revenue and licensing income in the period.

Chairman and Chief Executive Officer Robert W. D’Loren said the company launched two influencer- or creator-led brands near the end of the first quarter and expects to launch two more in the fall, followed by another in spring 2027. The company has announced influencer-led brands with Cesar Millan, Gemma Stafford, Jenny Martinez, Coco Rocha and Shannon Doherty.

D’Loren said those additions expanded the social media following across Xcel’s brand portfolio from 5 million to more than 46 million, and that the company is “on track to reach 100 million followers” across its portfolio based on its pipeline. He said wholesale shipments began in the first quarter for two of the influencer-led brands, with QVC and HSN programming beginning in the second quarter.

Influencer-led brands take center stage

D’Loren framed the influencer initiative as a key growth opportunity for Xcel. He cited a Goldman Sachs report that said the influencer or creator economy generated $254 billion in sales in 2025 and is expected to grow to more than $2 trillion by 2035. He also cited industry surveys indicating that 67% of consumers trust influencer recommendations over legacy brand advertising.

During the question-and-answer portion of the call, D’Loren said the typical timeline from signing an influencer to generating revenue is about 12 months, largely because of product design and development. He said Gemma Stafford and Jenny Martinez have recently launched, with Cesar Millan and Coco Rocha expected to follow, and Shannon Doherty tied to the Longaberger brand launch in spring 2027.

Asked about early performance for Mesa Mia by Jenny Martinez on HSN, D’Loren said the company is still in a “discovery period” for media timing and product mix. He said the first shows were “good” and that Xcel would make adjustments, noting that both Gemma Stafford and Jenny Martinez saw stronger responses to food products than to hard kitchen products. He added that food products have shorter lead times and are made in the United States.

Revenue declines amid HSN supplier transition

Chief Financial Officer James F. Haran said revenue for the first quarter ended March 31, 2026, was $1.1 million, compared with $1.3 million in the prior-year quarter. He attributed the decline primarily to HSN’s transition to a new apparel supplier for the C. Wonder and Christie Brinkley brands in the fourth quarter of 2025, which created a temporary gap in wholesale shipments and negatively affected associated licensing revenue.

D’Loren said the supplier transition disrupted inventory availability in the first quarter but improved product quality, which he expects to support sales going forward. He said C. Wonder and Christie Brinkley remain among the most popular brands on HSN and that the new licensee began shipping during the current quarter. With the transition behind the company, D’Loren said Xcel expects “significant growth” in those brands compared with the past two quarters.

Direct operating costs and expenses were $2.1 million, down from $2.3 million a year earlier. Haran said the decrease reflected cost-reduction actions taken in 2025 that lowered payroll and benefit costs. D’Loren said management has been working to run the company “as tight as we can” and is targeting operating costs of about $7.5 million, while noting that talent costs tied to influencer revenue are variable.

Loss narrows on a GAAP basis; adjusted EBITDA flat

Xcel reported a first-quarter net loss of approximately $2.5 million, or $0.42 per share, compared with a net loss of $2.8 million, or $1.18 per share, in the first quarter of 2025. On a non-GAAP basis, the company reported a net loss of approximately $1.4 million, or $0.24 per share, compared with a non-GAAP net loss of approximately $1.12 million, or $0.58 per share, in the prior-year quarter.

Adjusted EBITDA was a loss of approximately $700,000, essentially flat with the prior-year quarter. D’Loren said the company had approximately $100,000 in non-recurring expenses during the quarter.

Haran said the company recorded a $61,000 impairment charge in the quarter to write down the value of the Judith Ripka trademarks, which were subsequently sold in April for $2.3 million in cash plus future earn-out consideration. D’Loren said the Judith Ripka sale occurred at approximately six times gross royalty income, consistent with the sale multiple for the formerly owned Isaac Mizrahi brand.

Liquidity and financing activity

As of March 31, Xcel had approximately $13 million in stockholders’ equity, $1.1 million in restricted cash and $0.2 million in unrestricted cash, Haran said.

Haran also highlighted financing activity during the first quarter and in April. In January, Xcel entered into a committed equity line facility providing access to as much as $15 million over two years for working capital and potential acquisitions at the company’s discretion. Haran said Xcel has not used the facility to date.

In February and March, the company amended its term loan debt, setting up an April transaction in which it repaid part of its variable-rate term loan debt and entered into $3 million of senior secured notes at a fixed interest rate. Haran said most interest under the current term loan will be paid in kind, meaning it accrues and does not require cash payment until 2027.

Retail expansion and strategic opportunities

In response to analyst questions, D’Loren said Xcel plans to distribute its brands across brick-and-mortar retailers, e-commerce retailers and livestream platforms, including QVC and HSN. For Cesar Millan, he said licensees are currently selling products for fall placement at brick-and-mortar and e-commerce retailers, including Amazon. Xcel expects to launch Cesar Millan’s Amazon store within 60 days, with initial products including Ecostra Strong cleaning products, shampoos and conditioners, collars, leashes, dog apparel and other dog accessories.

D’Loren said there was “little disruption” from QVC’s restructuring and said the retailer is paying vendors on time. He also said Xcel has been working on a “big strategic partnership” for the past year and hopes to announce it before the end of the second quarter. On acquisitions, he said the company reviews many transactions each month, including brand deals and operating company acquisitions that could support distribution.

About Xcel Brands (NASDAQ:XELB)

Xcel Brands, Inc (NASDAQ: XELB) is a lifestyle brand management company that acquires, develops and markets consumer product brands spanning fashion, entertainment and home categories. The company works with designers, celebrities and entertainment properties to create branded apparel, accessories, jewelry and home décor collections. Its portfolio includes licensed and proprietary brands such as Judith Ripka, Isaac Mizrahi and Simple Joys by Carter’s, among others.

The company’s business model centers on sourcing creative talent and intellectual property, then leveraging an in-house product development team to design collections that are manufactured by third-party partners.