Xcel Brands 2025 Q3 Earnings 38% Adjusted EBITDA Improvement, 13.4% Net Loss Reduction

Xcel Brands (XELB) reported Q3 2025 results marked by a 42% revenue decline and a 38% improvement in adjusted EBITDA. The company’s net loss narrowed by 13.4% year-over-year, while guidance for 2025 adjusted EBITDA remains unchanged.

Revenue

Xcel Brands’ total revenue fell 41.5% to $1.12 million in Q3 2025, driven by reduced licensing fees and inventory sell-offs. All revenue streams—design and licensing, net licensing, and net revenue—were uniformly reported at $1.12 million, reflecting a contraction in core licensing activities and cautious consumer spending.

Earnings/Net Income

The company reduced its net loss to $-7.99 million (or $2.02 per share) in Q3 2025, a 13.4% improvement from $-9.22 million (or $3.92 per share) in Q3 2024. While the adjusted EBITDA loss of $653,000 showed a 38% year-over-year improvement, the EPS loss of $2.02 remains a significant drag on investor sentiment.

Post-Earnings Price Action Review

The strategy of buying Xcel Brands shares post-earnings and holding for 30 days resulted in a 14.23% account loss, with the stock down 4.23% in the latest trading day. Despite a slight recovery in the holding period, performance lagged behind market benchmarks. This suggests market expectations were already priced in, and standalone earnings-driven strategies may lack efficacy for XELB.

CEO Commentary

Robert D’Loren highlighted progress in reducing adjusted EBITDA losses and diversifying into influencer-led brands like Cesar Millan and Gemma Stafford. He emphasized 2026 expansion plans for C. Wonder and Christie Brinkley, alongside mitigating tariff risks through domestic sourcing. However, Q4 challenges from QVC/HSN studio transitions and ongoing debt refinancing remain key risks.

Guidance

D’Loren reiterated 2025 adjusted EBITDA guidance of $1 million to $2.5 million but shifted growth expectations to 2026. The company aims to launch five influencer brands, expand into new categories, and resolve tariff-related vendor issues. Qualitative targets include $25 million in royalty income (50% to Xcel) and 100 million social media followers by 2026.

Additional News

1. Insider Trading Activity: CEO Robert D’Loren and director Mark Disanto purchased 216,000 shares in the past six months, signaling confidence in XELB’s turnaround.

2. Hedge Fund Moves: Summit Trail Advisors and Citadel Advisors increased stakes in Q3 2025, while firms like Perritt Capital and Susquehanna International Group exited positions entirely.

3. Debt Refinancing: Xcel completed a $2 million equity offering with insider participation and restructured its term loan, deferring interest payments until 2027.

Image