Playboy (PLBY) 38th Annual Roth Conference summary

Strategic partnerships and licensing deals

• Closed a $122 million, eight-year licensing deal in China with UTG, a partner with proven success in building major lifestyle brands like Jeep and Dickies in the region.

• UTG will phase out existing licensees and become the exclusive operator, with a guaranteed minimum distribution and a 50/50 profit split on overages after certain thresholds.

• Byborg, another major licensee, is performing well, paying early and transitioning digital assets to their own platforms, ensuring stable $20 million annual payments for 15 years.

• Consumer products, especially apparel and accessories, make up about 80% of licensing revenue, with recent collaborations (e.g., Supreme, YSL, Amiri) aimed at boosting brand relevance.

• Growth opportunities exist in APAC (outside China), Latin America, and EMEA, with a focus on finding strong local partners to expand licensing.

Brand enforcement and marketing initiatives

• Significant investment is made in legal and brand enforcement, especially to combat piracy in regions like Southeast Asia and on platforms like Amazon.

• Collaborations with brands like Supreme are primarily for exposure and brand relevance, while some partnerships (e.g., True Religion) have also been financially successful.

• New executive hire from Disney/National Geographic is tasked with structuring licensing, brand spend, and finding new licensees, especially in the U.S.

• U.S. licensing business is being restructured to focus on exclusivity and strategic partnerships, moving away from a fragmented approach.

Honey Birdette business performance and outlook

• Honey Birdette has stabilized at $70+ million in revenue with a 10% operating margin, shifting from frequent discounting to brand health and profitability.

• U.S. stores are highly productive, averaging $1 million per store with 33% four-wall margins, compared to lower margins in Australia.

• E-commerce and brick-and-mortar sales are now roughly equal, with e-commerce offering higher profitability (around 50% margin).

• Expansion focus is on the U.S. market, with potential to double revenue and open up to 30 more stores in high-end and outlet malls.

• There is public interest in monetizing Honey Birdette, and the company is open to divesting the asset to further de-lever the balance sheet.