Alliance Entertainment (NASDAQ:AENT) Issues Quarterly Earnings Results

Alliance Entertainment (NASDAQ:AENT) released its quarterly earnings data on Thursday. The company reported $0.18 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.31 by ($0.13), Zacks reports. Alliance Entertainment had a return on equity of 21.87% and a net margin of 1.80%.

Here are the key takeaways from Alliance Entertainment’s conference call:

• Profitability and margin expansion: Alliance reported net income of $9.4M and Adjusted EBITDA of $18.5M in Q2, with gross margin up 210 bps to 12.8%, reflecting what management calls a durable, higher-quality earnings baseline.
• Shift to premium physical media and exclusives: Management attributes improved pricing and sell-through to a move toward premium formats (4K, Steelbooks) and exclusive studio deals, including Paramount and the new Amazon MGM agreement.
• Collectibles and authentication platform as growth drivers: Collectibles revenue grew ~31% YoY, and the NState/Alliance Authentic initiative (NFC-enabled authentication and digital identity) is being positioned as a platform to monetize primary sales, authenticated resale, and deepen licensor ties.
• Category volatility from gaming and arcade declines: Quarterly revenue fell to $369M (from $394M) largely due to a $34M decline in arcade sales and a $24M drop in gaming hardware, driven by supply constraints and transitions with partners like Arcade1Up/Basic Fun!.
• Stronger liquidity and lower borrowing costs: Alliance replaced its prior ABL with a $120M five-year senior secured revolver that lowers borrowing costs by up to 250 bps and is intended to support working capital for premium inventory and strategic initiatives.

Alliance Entertainment Trading Down 7.1%

Shares of NASDAQ AENT traded down $0.49 during trading hours on Thursday, hitting $6.38. 458,401 shares of the company traded hands, compared to its average volume of 73,537. The company’s 50 day moving average price is $7.54 and its 200 day moving average price is $6.62. Alliance Entertainment has a 12 month low of $2.21 and a 12 month high of $8.80. The stock has a market capitalization of $325.12 million, a price-to-earnings ratio of 16.36 and a beta of 0.46. The company has a current ratio of 1.28, a quick ratio of 0.64 and a debt-to-equity ratio of 0.62.

Institutional Inflows and Outflows

A number of hedge funds have recently bought and sold shares of the company. XTX Topco Ltd purchased a new stake in shares of Alliance Entertainment in the second quarter valued at $59,000. Jacobs Levy Equity Management Inc. bought a new position in Alliance Entertainment during the 3rd quarter valued at about $193,000. Empowered Funds LLC raised its position in Alliance Entertainment by 9.2% in the 1st quarter. Empowered Funds LLC now owns 90,880 shares of the company’s stock worth $304,000 after purchasing an additional 7,683 shares during the period. Bridgeway Capital Management LLC lifted its stake in Alliance Entertainment by 18.4% in the second quarter. Bridgeway Capital Management LLC now owns 122,075 shares of the company’s stock worth $460,000 after purchasing an additional 18,995 shares during the last quarter. Finally, Millennium Management LLC lifted its stake in Alliance Entertainment by 29.2% in the third quarter. Millennium Management LLC now owns 85,510 shares of the company’s stock worth $582,000 after purchasing an additional 19,325 shares during the last quarter. Institutional investors own 0.27% of the company’s stock.

Analyst Upgrades and Downgrades

Separately, Weiss Ratings restated a “hold (c)” rating on shares of Alliance Entertainment in a research report on Wednesday, January 21st. Two research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, Alliance Entertainment presently has an average rating of “Moderate Buy” and a consensus price target of $10.67.

Alliance Entertainment Company Profile

Alliance Entertainment (NASDAQ: AENT) is a distributor of physical media and related entertainment products, serving retailers, public libraries and online merchants. The company’s core business revolves around the wholesale distribution of music and video titles on CD, DVD and Blu-ray formats, as well as vinyl records, audiobooks, video games and select gift and novelty items. By maintaining a broad catalog of new and catalog titles, Alliance Entertainment enables brick-and-mortar and e-commerce channels to access an extensive range of products from major and independent labels.

In addition to its product offerings, Alliance Entertainment provides supply-chain and logistics services designed to streamline inventory management and order fulfillment.