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Playboy CEO says 'best days are ahead' after stock plunges on earnings

Yahoo Finance’s Akiko Fujita and Zack Guzman discuss Playboy Group earnings and outlook with Playboy Group CEO, Ben Kohn.

Video transcript

ZACK GUZMAN: Shares in iconic brand Playboy are getting hit today, off by about 13% after the company reported its full quarter after that SPAC deal closed in February. Revenue for the quarter grew 44% year over year to $49.9 million, driven by some key growth there on the direct-to-consumer and licensing revenue side of the business. The stock, though, has been on a pretty wild ride this year, at one point jumping more than 300% year to date before falling back down to a more modest doubling since that February deal to go public.

But for more on the company's growth and what they're seeing play out, I want to bring on the CEO of Playboy Group, Ben Kohn joins us now. And Ben, good to be chatting with you again here. I mean, obviously, the stock moves showing some volatility. It's early in terms of this being the first full quarter you guys have gotten a report. But what do you think investors might be paying too much attention to here, as you showed growth?

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BEN KOHN: Yeah, look, we had a great quarter, especially in the face of COVID. And thank you again for having me. Revenue up 44%. Really, the three priorities that we laid out really focusing on our direct-to-consumer business. Our DTC business was up 88%. And when you actually look at playboy.com, which is still early in its evolution as a shopping site and will continue to evolve when we bring in NFTs and blockchain technology to it, but Playboy was up-- playboy.com was up 130% sequentially first quarter to second quarter.

So we're really pleased by the business. And that was all in the face of COVID. Our licensing business grew 12%. And that's been hurt by a 75% decline in our gaming business from where we thought it should be, based on COVID lockdowns. We remained out of stock on a number of our items [INAUDIBLE]. And the Playboy for our summer collection, we only received 50% of the items that we had ordered. So overall, very pleased. Did we leave money on the table? 100%. But I think every company is facing the same issues today, given COVID.

AKIKO FUJITA: So Ben, what do you think investors are missing here? Stock is down 13%. I know CEOs like to say they don't watch the stock price, but you said on the break here that you're a little surprised.

BEN KOHN: Yeah, look, I am surprised. We doubled our long-term guidance for 2025 to $600 million from what we had previously disclosed when we did the de-SPACing of $300 million. Look, I can't pay attention to the stock price. We have to pay attention to executing on operations. We are making investments this year. I think maybe people didn't appreciate them. But those are investments that actually allow us to realize synergies on the cost side down the road.

But more importantly, on the revenue growth side, you know, we're setting this business up for really accelerating the revenue growth moving forward, launching beauty and cosmetics next year. Again, we're making the investment this year, realizing their revenue. Same thing with the launch of our big bunny collection that will happen in Q4 and then the next year. We're carrying cost today, development cost today, that, again, with no revenue associated with them.

So long term for me, nothing's changed in the business. I'm a huge owner of the company. And I believe that our best days are ahead of it. And I think our revenue growth will continue to accelerate moving forward.

ZACK GUZMAN: Yeah, Ben, I wonder if one of the questions here is just that it's so hard for investors to really figure out which part of the business they should be focusing in on because you're not just talking about the cosmetics and beauty line that you're planning to launch there, but also kind of the lingerie brands that you have now under the portfolio, as well as the NFTs that you guys sold as well. So I mean, is maybe some of that just that there's so much on the plate right now that maybe it's too much to track here?

BEN KOHN: Yeah, I think that definitely contributes to it. I think that there's a lot going on at the company right now, as we continue to transition this business. But look, this is one of the biggest brands in the world. This is a brand that drives over $3 billion of spend today. And I think that we're focused long-term on, really, that intersection of virtual goods and physical goods and building out that ecosystem. And I think that will allow us to drive superior margins over time, especially as you look at some of the recurring revenue streams that this company has and will continue to develop moving forward.

And we talked a little bit about that yesterday. We can't go into too many details about that. But really, the evolution of what we've tested in the NFT market, on Nifty generating almost a million dollars, and then a few weeks ago, on SuperRare, we sold one JPEG of a 1970 picture of a bunny waterskiing outside the Playboy Miami club for $60,000, we're going to integrate that all into our ecosystem moving forward. And we mentioned membership. We don't want to go into too many details on that, but leveraging the influencers and the celebrities that we work with in a cohesive ecosystem.

AKIKO FUJITA: Interesting to see the evolution of the brand. Ben, it's good to talk to you today. Ben Kohn, the CEO of Playboy, great to have you on.