PLBY Group, Inc. (NASDAQ:PLBY) Q4 2021 Earnings Conference Call March 1, 2022 5:00 PM ET
Ashley DeSimone - MD at ICR, IR
Ben Kohn - CEO
Ashley Kechter - President of Global Consumer Goods
Lance Barton - CFO
Conference Call Participants
Alex Fuhrman - Craig Hallum
Jim Duffy - Stifel
George Kelly - ROTH Capital Partners
Austin Moldow - Canaccord
Brian Dobson - Chardan
Good afternoon, everyone and welcome to PLBY Group's Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. I'm Ashley DeSimone, from ICR. Hosting today's call, are Ben Kohn, Chief Executive Officer, Ashley Kechter, President of Global Consumer Goods, and Lance Barton, Chief Financial Officer.
The information discussed today is qualified in its entirety by the Form 8-K that has been filed today by PLBY Group Inc. This may be access on SEC's website, and PLBY Group's website. Today's call is also being webcast and a replay will be posted to PLBY's Investor Relations website.
Please note that statements made during this call, including financial projections or other statements that are not historical in nature, may constitute forward-looking statements. Such statements are made on the basis of PLBY's views and assumptions regarding future events and business performance at the time they're made. And we do not undertake any obligation to update these statements.
Forward-looking statements are subject to risks, which could cause PLBY's actual results to differ from its historical results and forecasts, including those risks set forth in PLBY's filings with SEC. And you should refer to and carefully consider those for more information. This cautionary statement applies to all forward-looking statements made during this call, do not place any undue reliance on these forward-looking statements.
During today's call PLBY will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings release, that PLBY filed with its Form 8-K today.
I will now open the call to Ben Kohn. Ben, please go ahead.
Thank you, Ashley. And good afternoon everyone. 2021 was a stellar year for the future of our company. We went public, completed three acquisitions, which brought in skills we use for our business transformation and hired some great talent. We achieved $96 million in revenue in Q4, and an incredible $247 million of revenue for the year.
The consumer demand for our brands has never been greater. And we are well on our way to our goal of $600 million of consumer product revenue in 2025. You can't walk down the streets of Los Angeles in New York today without seeing someone wearing the Playboy logo. And we believe we could have easily surpassed the $100 million of revenue in Q4, if not for the COVID related fulfillment challenges impacting both Yandy and Playboy Halloween sales and the impact of Honey Birdette, retail store closures in Australia from October into November.
This has been a difficult operating environment, one that caused us to constantly pivot because of supply chain and distribution issues. One that costs us considerable revenue due to supply chain issues and disruptions to our workforce, and one that delayed the rollout of new products and stores. Despite this, we grew our revenue, expanding our owned and operated direct-to-consumer business significantly, and grew our workforce from just 130 Playboy employees two years ago to over 1100 today across the Playboy group or PLBY Group. Our organization has now more than 80% women.
And our business transformation is taking shape as we move away from a licensing and a legacy media business model to that of a fast growing direct-to-consumer and digital product and services business designed for profitable long-term, sustainable and meaningful growth. This year, we will build on a great momentum and assemble the pieces acquired last year into a sustainable and scalable foundation that will allow us to further accelerate our revenue and profit growth in future years.
We will accomplish this by focusing on these two priorities in 2022. First, we will need robust consumer demands through the continued expansion of our direct-to-consumer business by further growing our owned and operated channels, realizing synergies between our brands, including eventually aligning Yandy and Lovers around the Playboy brands, consolidating operations in tech infrastructure, and continuing the optimization of licensing.
And second, we'll continue to advance our digital business to the full build out of CENTERFOLD and its integration with our other platforms, including our NSE and Web3 initiatives. To focus the organization on these priorities, I've simplified my reporting structure to bring in industry veteran, Ashley Kechter to oversee all consumer products including our Playboy, Lovers, Yandy and Honey Birdette brands in our licensing portfolio. Ashley joins us in January and brings a wealth of experience to PLBY Group, having spent 15 years ago, most recently running the Banana Republic Factory omnichannel business.
Prior to that she spent seven years at RH or Restoration Hardware, where she drove rapid growth as a Chief Merchandising Officer and Chief Inventory Officer, overseeing multiple launches of new revenue and product lines in supporting a successful IPO, with revenue tripling to $2.5 billion during her tenure. Ashley is going to share more detail about our consumer product goals for 2022 and key highlights from 2021. And then I'll walk you through our digital goals. Ashley.
Thank you, Ben. And hello, everyone. I'm really excited to be here at this critical point in PLBY Group history and to capitalize on the incredible opportunity to grow our consumer products business. As Ben mentioned, the team has done a phenomenal job and I've been able to hit the ground running to identify brand synergies, operational efficiency, and growth opportunities that will deliver value to our customers and our shareholders.
Our DTC goals are oriented around growth. This means expanding our product line with a newly defined buying process, building out our merchandising function, transforming the customer experience, and strategically expanding our brick and mortar retail presences.
To achieve this, we are consolidating and stabilizing our operating platform. This includes continuing to build our infrastructure and operating model across all of our brands, Playboy, Yandy, Lovers and Honey Birdette and defining a purpose and position for each of them. With this framework, we are establishing clear delineations between product offerings and audiences that will solidify the role of each in our overall portfolio, while holistically delivering on the same pleasure seeking brand values and lifestyle that PLBY Group brands represent. Based on this work, we will establish each brand purpose and product focus and will refine the product offerings in order to increase efficiency, maximize revenue, and optimize selling opportunities.
We will also continue to focus on growth opportunities in the U.S. and Europe for our owned and operated DTC business with the strategic expansion of Honey Birdette stores and plans to roll out new own and operated consumer Playboy product lines, including cosmetics and lingerie developed by the Honey Birdette team. The timing of those launches is subject to the supply chain and when the necessary inventory is readily available.
I have reviewed our global licensing portfolio and we'll continue the great work already started to streamline our partnerships with those that deliver a strong ROI and drive stable profitable revenue and increased brand awareness. Despite the licensing business being impacted by COVID related supply chain issues our partners experienced, we closed 10 new licensing deals in 2021 including two new fab in collaboration with EVA and OVO [ph] which is Drake’s October’s very own label.
While I've been focused on our immediate and long-term strategy, I am also addressing some COVID related inventory and technology challenges we faced in Q4 that negatively impacted our revenue. We had solutions in place to address the root cause and are establishing systemic safety measures to avoid any business interruptions in the future. There is a lot of transformational work underway and I'm excited about what we will accomplish together in 2022 and beyond.
With that said, I will pass it back to Ben.
Thanks, Ashley. It's great to have you here. Just as we did hiring Ashley, we are actively recruiting top tier technology professionals to drive, elevate and innovate our digital products and services as we look to the future of CENTERFOLD and beyond with our Web3 and NFT blockchain initiatives.
We designed our digital strategy for our consumers with the understanding that they want to engage with an experienced Playboy beyond simply buying our products. As a result, we have a unique opportunity to surround our consumers with a Playboy ecosystem, an immersive experience designed to create a flywheel effect to drive engagement, loyalty, and mutual long-term value for both the consumer and our business.
Consumers can enter ecosystem at any point in the continuously product, content, experiences and community. As we've discussed in our previous calls, the majority of our consumers come to us for physical or digital consumer products, whether it's clothing or entities, customers can come to us because they have an emotional connection with the brand and they are making a statement about who they are and what they believe in by associating with the Playboy lifestyle. That's why our owned and operated DTC licensing and NFT businesses are so important. Not only do they drive predictable revenue and brand awareness, but they also provide an easy and accessible entry point to our Playboy ecosystem.
Once consumers have entered our ecosystem, they stay with us because they want to engage with inexperienced brands. Our social media channels alone, which achieved 1.5 billion organic consumer impressions last year is a testament to this. By leveraging the digital affinity of Gen-Z and millennials and their desire for community, we can foster engagement and loyalty, optimize our lifetime value potential across our brands, and glean robust consumer data to continuously refine our customer segments, journeys, and user experience.
CENTERFOLD provides our consumers with both the community they are seeking, as well as the new digital access point to the Playboy ecosystem. We accelerated the launch of this creator led platform in beta mode in December, because of increasing demand from creators to be associated with Playboy in their desire for a new platform to connect with their fans.
Overall, the look and feel of the platform has been really well received. And creator engagement has been high and is rapidly approaching 1000 verified creators on the platform. And we have a waitlist that is multiples of that far exceeding our expectations for this beta phase. In addition, we are really encouraged by the high volume of organic traffic to the platform, which has already surpassed or high traffic playboy.com. It confirms our thesis about the importance of Senecal is a key access point to the Playboy ecosystem, and what that means for the top of the funnel in the future.
Also, during the beta phase, we built out a robust marketing roadmap, including creator launchers and promotions, and SEO and SEM strategies. And we are in the process of incorporating the feedback from our founding creators, and we'll be turning on new features and enhancing the revenue monetization component in coming months.
An example of the new functionality is the ability to livestream as you may have seen from Cardi B's live session with our fans on February 18. As you know, we brought on Cardi B late last year as our founding creative director in residence to help us attract new creators in audiences and to engage brand loyalists.
Cardi B's first posts about CENTERFOLD were to ask her fans what creators they want to see on the platform. And in their first live stream, Cardi B piece of news that she has secured her first talent for Playboy and that she will be directing every aspect of that photoshoot in her new role with us. I can't wait to share more about who Cardi B is recruiting.
In addition to Cardi B's new talent for CENTERFOLD, and the addition of Mia Khalifa, who was recently announced, we are in the process of onboarding a steady stream of new creators in a number of town verticals across music, art, fashion, comedy and gaming in the months ahead, you'll be hearing a lot more about who is joining CENTERFOLD as we move out of the database and fully activate the platform.
As we continue to build out this Playboy ecosystem, we are investing in fully integrating and unifying our technology across our business as we continue to scale as a public company. This will allow us to align the business around certain hero products. In later this year, we will explore ways to leverage Playboy Club and Playboy TV into CENTERFOLD. This will yield greater focus internally enhanced the speed of product enhancements, because we are not supporting multiple products and provide our creators with greater reach.
Through a unified technology, we will be able to capture important data given the direct relationships with our consumer. While we are in the very early stages of datafication, this insight will be more valuable than ever given the recent changes in privacy restrictions, and user tracking and limitations. I want to close by reiterating my excitement about our great momentum, strong demand for our brands and the power of the Playboy ecosystem to surround and engage our consumers. This unique business model and brand transformation that I envision years ago is solidifying, and I believe it will deliver value over the long-term with margins unlike other growth drivers.
Now I'll turn the call over the Lance.
Thanks Ben. The fourth quarter kept a year of tremendous growth for the company with year over year revenue growing 107% and $95.7 million resulting in $247 million of revenue for the full year. Perhaps most importantly, our direct-to-consumer growth accelerated in the fourth quarter. It was our best quarter yet in terms of direct-to-consumer revenue growth, which was up 162% year-over-year to $62 million.
Playboy ecommerce continues to scale rapidly. Revenue doubled from Q3 to Q4 and grew an astounding 555% year-over-year as we found new ways to tap into the surging demand we see for Playboy branded products. For Halloween, we made the official Playboy bunny costume one of the most iconic and celebrated and recognized costumes in the world, commercially available to the public for the first time ever, it was a huge success, we sold 1000s of units in the first few weeks of the quarter, site conversion rates doubled and we capitalize on all of the organic search traffic occurring for Playboy bunny costume terms, and we were able to meet that demand with supply directly from us.
Customers were delighted to be able to purchase the authentic suit from us, and not some cheap knockoff and paid between $150 and $180 for each costume. We also were able to upsell tight shoes, jewelry and other beauty products to complete the full look for the costume. As the quarter progressed, playboy.com saw a tripling of conversion rates on Black Friday and holiday gifts in led to December being the highest sales month in history for Playboy ecom, beating even the big sales numbers we saw in October and November.
At Honey Birdette, it began the quarter with half of their stores closed in Australia due to COVID, but as the government lifted restrictions in November, the business started to rebound and managed to end the year strong generating $25 million of revenue in the fourth quarter. We continue to see plenty of opportunity for growth in both the U.S. and Europe, evidenced by the early success we've seen scaling our European ecommerce to over a million dollars in revenue after just launching in September. And the fact that our best performing stores globally are already in the U.S., on average outperforming by 40% more revenue per store than we see in Australia, with plans to open at least 10 new stores this year.
Yandy got off to an incredibly strong start in October and was on track for its highest revenue month ever. But unfortunately, we couldn't keep up with the demand for costumes and had to shut down our Halloween operations a week earlier than anticipated, leading to what we believe was well over $3 million in lost revenue for both Yandy and Playboy. Perhaps most notably at Yandy is the fact that we continue to have a lot of success with our private label Yandy and Playboy products, something that we intend to continue growing this year and beyond.
In addition to the strength we saw on the direct-to-consumer business, fourth quarter revenue was bolstered from the successful launch and subsequent secondary sales of our Rabbitar NFT collection that we launched in late October.
Adjusted EBITDA was $14 million in the quarter and nearly $32 million for the full year as we continue to invest in building a unified backhand across all of our direct-to-consumer businesses, and bear the increased costs of being a public company that didn't impact us the year prior. Our technology, infrastructure and investments will continue over the next 12 to 18 months, but once we have fully rolled out the implementation, we expect to contrive margin expansion in the 2023 and beyond.
Similar to other consumer businesses in the fourth quarter, we continue to experience cost inflation and COVID related impacts across numerous areas such as labor, shipping fulfillment, and customer acquisition.
Our net loss in the quarter was largely driven by a large amount of stock-based compensation and non-cash accounting adjustments. It's worth calling out that our stock-based compensation expense was extraordinarily high in the fourth quarter for a few reasons. We formerly granted performance based restricted stock awards, our issues and options that were pursuant to employment agreements entered into in early 2021.
Even though performance metrics on the PSUs were achieved in the first half of the year, and the RSUs and options would have been granted around the time of our leaseback, those grants were not formally made until the fourth quarter. That's because we had to wait a minimum of 60 days before we could put our Form F-8 registration on file. And it also took us a few quarters to get our equity plan administration systems up and running.
It was also driven higher because SPCs expensed based on the fair value of the grants on the date of grant. And at the time, most of these grants were made, our stock was trading at close to $30 per share. The business was cash flow positive in the quarter and we ended with around $75 million cash and equivalents on the balance sheet plus an additional 1,800 of wealth that we generated from the sale of our Rabbitars which was worth around $6.5 million as of 12/31.
Looking ahead, we expect revenue in 2022 to be approximately $350 million for the year, that's roughly 40% growth over 2021. Similar to last year, most of this growth should come from the continued expansion of our direct-to-consumer businesses, along with growth and licensing revenue. And as CENTERFOLD scales we expect to see more revenue contribution coming from it later in the year.
In terms of a quarterly breakdown of revenue, I expect the first quarter to be approximately $68 million. And I anticipate the back -- the year to be back in weighted with around a third of our full year revenue coming in the fourth quarter. We expect adjusted EBITDA to be around $55 million for the year, with EBITDA margin much lower in the first half of the year as we continue to ramp investments where revenue may lag and come later on. And similar to this year, the bulk of EBITDA should come in the fourth quarter as our revenue rams.
I also want to remind everyone about our philosophy on financial guidance, which is to only provide an annual outlook at the start of the year so that as a company and management team, we can focus on our long-term goal of reaching $600 million of consumer product revenue and EBITDA margins about 25% by 2025 without getting distracted by chasing quarterly results. We have no intention to provide an updated outlook for the remainder of this year, unless there is a material deviation to our stated goals of $350 million of revenue and $55 million of EBITDA.
If there is one common theme among what we are seeing in both direct-to-consumer and licensing, it's the fact that demand for our branded products both Playboy and Honey Birdette is incredibly strong. We see it when we launch something like funny costumes for Halloween, when our best performing items on Yandy our Playboy collaboration, when Honey Birdette opens a new store on our E-commerce channel, and when some of the largest Gen-Z streetwear retailers continue to deliver royalty overages because of stronger than expected sales of our branded merchandise.
These results give us great optimism, especially given how well the business has executed despite ongoing macro headwinds. This year, we're going to continue to execute against our strategy of building out our direct-to-consumer business, and develop innovative ways to monetize our IP via by building out a scale digital platform.
This strategy takes investment and time as we reposition the company to capture all this consumer demand. But we believe these investments will ultimately deliver a long runway of increasingly profitable growth in the coming years.
With that, I'd like the operator to open the line for questions.
[Operator Instructions] Our first question comes from Alex Fuhrman with Craig Hallum, you may proceed with your question.
Great, thanks very much for taking my question. And congratulations on a really strong year. First year as a public company here. It looks like direct-to-consumer segment was the biggest driver of the quarter even though it sounds like all of your brands were negatively impacted by supply constraints as well as the COVID lockdowns in Australia. Can you talk a little bit about how each of the brands performed during the quarter? And how do you see those constraints playing out both in Q1 and the rest of 2022? Thanks.
Thanks Alex. So I’ll talk a little bit about the brand performance I highlighted it earlier. But we got off to a great start at both Yandy and Playboy ecom, because of the Halloween selling season. We hadn't ever really sold or actually we had never sold the official Playboy bunny costume. It's always been unsanctioned and so not buy. So this was the official one.
We had a really big October that carried over for Playboy into the holiday buying season into November and into December. As I mentioned Honey Birdette was off to a slower start in the quarter because of the store closures but that actually really ramped once the store is reopened and into the holiday buying season.
And Lovers continues to do quite well for us. It's been kind of one of those studies Ashley goes saying, Ashley is really interested in what we can do there in terms of being able to leverage a lot of the products that we have elsewhere.
I don't know been an Ashley, do you have anything you want to add to that?
Yes, Alex. I think COVID definitely played a huge impact in our results for last year. As Lance said, we had to shut down basically the whole entire warehouse a week early, which cost us millions of dollars of revenue. We have impacts, through our licensing business as well as we previously talked about that continued into the fourth quarter. As far as guidance for this year, I think we continue to expect the supply chain to be challenged. And that was baked into our numbers. Hopefully that will ease.
I'm really excited by some of the things we are seeing with the ability, and this is what Ashley is working on right now, not only the merchandising strategy around Playboy, which really did not exist before. So I think there's a huge opportunity with playboy.com as we continue to pivot on the DTC side.
But also when we look at Yandy and Lovers and looking at the expansion of Lovers, really integrating the Playboy brand into that. But Ashley, anything else you want to add?
Yes, I mean, I think for me, what I'm really excited about. And as I, I've been here about six weeks now, the big opportunities just in the fact that we've got incredible brand health from a brand awareness and a demand standpoint, but we haven't spent enough time yet, just by nature of growing as quickly as we have and from a talent standpoint, integrating those brands, really defining the benefit and the role each brand plays within the portfolio, and then leveraging the power we have within those Honey Birdette and Playboy to grow Yandy and Lovers and to build that out.
And so I think in terms of going after key talent, bringing in merchandising capabilities, going after some pricing and margin opportunities, looking at how we start to bring private label is bigger scale into the business that will enable us to expand margins and go after new business opportunities much more quickly, and to really drive growth. And so I'm thrilled about the potential and now we just need to go after it aggressively and quickly.
That's great. Thanks, all of you for that. And then if I could also ask about the licensing business. It sounds like there have been some new licensing deals signed recently. What are your priorities for licensing this year in terms of new regions and product categories? And when might we start to see India and other emerging markets start to have a meaningful impact?
Yes. So Alex, obviously, with COVID, the renegotiation in some of the expansion of licensing has been slowed down, just in our inability to travel, actually, today, I'm happy to announce is our first day back in the office in basically two years, I think we're a week shy of two years, two weeks, if two years. So excited to get the team back on the road. India, obviously, we delayed the launch there, our physical products, and we did launch last year, but delayed the launch of physical products, given the supply chain issues, and what was just a ton of backlog that was sitting in the system. We did that in coordination with our partners.
But we did sign trending deals, we have a robust pipeline of licensing deals, those are focused in international markets for the most part outside of some great collaborations we're doing in the United States, as we continue to pivot to our owned and operated channels in the markets where we have domain expertise to operate them.
The other thing, Alex, despite some of those ongoing headwinds that we see from COVID, especially internationally, throughout Asia and throughout India, we actually have seen really strong growth with our U.S. apparel partners we've been seeing I mean, this has been consistent all year. But we've been getting royalty overages coming in from PacSun and also from a Myriad of areas that brand and you've seen probably on Gen-Z, it's like $1,000 shirt. And we've also seen really strong retail sales from our partners at Urban Outfitters and Chile. So that really has again optimistic about the demand here because these are some of the most resonant brands with the younger generation.
That's really helpful. Thank you guys very much.
Thank you. Our next question comes from Jim Duffy with Stifel you may proceed with your question.
Thank you. Hi, Ben. Hi, Lance, and welcome Ashley. Hey, lads, I want to start -- can you address the delay of the 10-K and the expectation you'll be reporting a weakness in internal controls?
Sure. So for better for worse when we when we started last year, we were an emerging growth company which in terms of SOX compliance and reporting timelines is much longer than a large accelerated filer with the run up in the stock price that we had in the first half of last year on the June 30 measurement date. We switched from being an emerging growth company to a large accelerated filer.
So we spent the first six months of the year not expecting to have to do SOX 404 compliance in the first year as a public company. That switch was slipped on June 30. So we have been scrambling with our new auditor our new auditor PDO, also just joined us in July. So we have been scrambling really since the middle of the year to try to get all of this done in time, which is why we filed for that extension.
So, our reporting timeline for a company of our size and for the size that we were a year ago was actually much longer. We're on a reporting timeline with the Googles and Microsoft's of the world. And here we are 10 months out of the gate. So that's really what the driver is right now.
Okay, related, I suppose, press release really thin on financial details, can you give us some preview of what the balance sheet will look like? When you do get it on file? Things like, shark position, inventories, receivables, so forth?
Yes, I mentioned the cash position with $75 million of cash. I'm not going to go into any of the other details on here, because we're still in the process of finalizing our audit. So I don't want to preempt any of that work right now.
Okay. And then, if I may, just one more, Ben, my client base very interested in update on the CENTERFOLD business. Thanks for the detail that you did provide. You've characterized it as a beta launch, have you worked through technical issues? How's the audience building? How many of the audience are paying for premium access? Is the platform now stable and ready to scale?
Yes, Jim thanks for the question. So I think it's important to sort of like level set and look at what we've accomplished in a very short period of time, we accelerated the launch of what was going to be something we already developed internally with the acquisition dream in late October. And we launched a product in late December. And we did that because we had big demand from creators. And that demand has far exceeded our expectations. But they really wanted to look and they want to feel a product. And so we push that out quickly.
I think the dream acquisition accelerated our development by about 12 months, because there's a funding component, but there's a really complex back end component, when you start to work through creators all over the world payouts integrating into our systems, et cetera. We are nearing the end of that beta launch here in the next few weeks. And we will be turning on our marketing efforts then.
What we have seen and really proving our thesis, what CENTERFOLD can be long term is that our traffic has on centerfold, without any marketing and what I would say is, a very few creators on it has exceeded that of playboy.com. And so when you start to think about the top of the funnel and CENTERFOLD being the center of that ecosystem, it's very promising.
The other thing I would say is, the creator demand, as we said, it's been great. We have a huge wait list of creators. And then, as milestones are reached, a lot of our founding creators become exclusive to us. And so excited to continue to turn on the revenue monetization here over the next few weeks, and then the marketing initiatives as we move into the second quarter.
Helpful, thank you so much.
Thank you. Our next question comes from George Kelly with ROTH Capital Partners. You may proceed with your question.
Hey, everybody, thanks for taking my questions. So maybe if we could just continue on with CENTERFOLD. Ben, as you look out over the course of this year, you mentioned I mean, the product I know it's continuing to morph and there's new functionality you're going to be adding. What -- can you highlight one or two, two parts of that the biggest kind of iterations or areas of improvement that you think the functionality can -- where you can grow and expand sort of the products that within CENTERFOLD over the course of the year?
Yes, so if you look at what we have today versus others, we have subscription and we have messaging. Those functions don't exist today in the right places, largely because we haven't turned that on. And so you'll start to see these calls to action to the revenue monetization, inherent over the site, you'll see that the sign on process improves on the site, you'll see that we will turn on SEO and limited SEM, as we move forward on that.
And then at the existing product functions, the tipping the live video in which Cardi debuted on the 18th. There are multiple enhancements coming to those products. And then as we move into later in the year, there are some interesting Web3 blockchain initiatives that we're working on integrating into the product.
And then as I mentioned before, we have two legacy products which are Playboy Plus and Playboy TV, we will work on the integration of those that won't happen this year. But we'll start to think through that. And really Playboy TV as a discovery platform for CENTERFOLD, given the houses 90 plus million homes.
The other thing that I wanted to mention to George, I mean, really the big part of this is how do we leverage our creators and get their feedback to really improve monetization and interaction with the user. So almost everything that we do is going to be driven by that feedback and by the partnership that we have with these creators, and that's really what we're building towards.
And yes, just to build on that. It's a great point, Lance. George, that's what we've been doing for the last 60 days is working with the creators. I think the big thing with creators when you're launching a new platform is what's the look and feel of it. I think that's been really well received that has led to huge amount of creator demand. And then, as we worked on the back office integration, accounting systems and all that our ability to start onboarding creators, content moderation with the MasterCard guidelines, et cetera, that will start to enhance here pretty quickly.
Okay, okay, great. That's helpful. And then next question for me, just on your guidance. So $350 million in revenue, can you help break down the segment contribution? And what I'm just curious about is, so if I look at CENTERFOLD, and kind of lumped together CENTERFOLD and Rabbitars in some of these other digital initiatives underway? Or how much of a contributor to expect those to be I don't know if you're going to give a specific number, but do you think there'll be a material contributor to your revenue by year end? And can you hope it all just with sort of size of contribution or anything else? I'm not sure what you are comfortable saying?
Yes, sure. So the digital piece, so we've got three reportable segments, right, and I mentioned that the bulk of the growth this year, it's going to look similar to 2021, which is, you're going to see the bulk of that growth driven by direct-to-consumer, you're going to have some growth from licensing as well. But we've never, position that as a big double digit grower.
And then on the digital side, right now, the revenue coming from there is really around Playboy Plus, and the incremental revenue coming in from CENTERFFOLD its really marginal at this time, it's not a material contributor to 2022. And we'll continue to evaluate as it goes. But right now we're really focused, more on scaling the user base, scaling the creators and focused on actually the features that we have are less focused on monetization upfront therefore, contribution in 2022, should be rather immaterial from CENTERFFOLD.
Okay, that's helpful. And then last question for me. In the past, you've given the retail sales number four PacSun and misguided. I was curious if you could update us just with what kind of growth you saw from those two brands or anything else worth highlighting in your licensed business? That's all I had. Thank you.
Yes, we continue to see the overages coming in from those partners. So I don't have the exact growth of them handy. But again, they continue to outperform what they've set up for us.
Thank you. Our next question comes from Austin Moldow with Canaccord, you may proceed with your question.
Hi, thanks for taking my questions. Can you reconstruct the expected revenue DTC revenue growth for 2022? A little bit more? Maybe just even qualitatively, I'm curious, which sort of private label product launches you're expecting in the year? Or what brands are particularly robust in that outlook?
Sorry, I mean, you said walk through the direct-to-consumer growth in 2022 that we're anticipating?
Yes, if you could just talk to what that 2022 DTC revenue growth is coming from primarily?
Yes, so there's a few buckets right. So the first is going to be our first full year of Honey Birdette and Honey Birdette ended up itself we mentioned wanting to add around 10 new stores here. We've talked before about how these new stores when we open these strategically, they're like a really profitable billboard for the business. Not only do they produce 30 plus percent EBIT margins, after we've got them up and running, but they also managed to derive increased e-commerce revenue.
So part of the growth plan for Honey Birdette is strategically open these stores throughout primarily in the U.S. but also somewhat in Europe. So that's going to be a growth driver. We've talked about Playboy ecom continuing to scale, we see a really long runway, they're continuing to really build that business out. And especially with Ashley joining us, I know she's got a lot of great initiatives that she's pursuing on that front.
And then when we think about our ability to drive growth at both Yandy, and Lovers, it's a combination around, how do we get even more leverage out of our Halloween sales from Yandy, I think we can also do that at Playboy ecom. Can we start to add to that, from a Lovers perspective?
And then also, how can we leverage our IP and our brand more broadly across all of this. And then, underpinning all of these, we talked a little bit earlier on the call, it is really building that out that unified back in infrastructure so that we have more data so that we have more insights into to what levers we can pull. And we really do think that can help start driving the growth as we implement those tools later this year, and certainly beyond.
Got it. How meaningful is playboy.com or playboy ecommerce right now, like, how does it sort of compare to say Yandy?
I mean it's smaller than Yandy, because we just started monetizing it in 2020. So you've grown from nothing to something, much, much, much larger than it is. So it's going to continue to scale. We haven't broken it out specifically. But it's been a nice contributor to our growth and direct-to-consumer and we expect it to continue to doing.
I think, just jumping in really do there. I think the other opportunity is how we leverage the Playboy brand to grow Yandy, to grow Lovers because I think there's a significant opportunity to integrate more effectively, and how we go after business using the leverage retail footprint using the Honey Birdette product and just starting to bring some of those elements together to drive growth, everything about the back half opportunity.
Got it. And one on CENTERFFOLD, in terms of the actual content. Where do you see this sitting on the spectrum between say, and Instagram and only fans? I know, you've mentioned sort of a wide array of the types of creators, but thus far it sounds like most are maybe from the adult industries. So just looking for color on how it'll be positioned alongside the brand?
Sure, so I'll pick this. So I think your long term, we sort of used this as an uncensored Instagram more than what I would say only fans has been made their reputation on which is really hardcore adult content. And so as I mentioned, we have exciting creators that will be joining us from comedy from music that continue to expand on Cardi B, et cetera. And then we’ll do other things around that with activations.
And so our content guidelines are stretched, we think that is the place in the market that is not only the largest place in the market, but also the place in the market that works for us from a brand perspective, and then really as a top of the funnel as we look to integrate commerce and other products into centerfold long-term.
Okay. Thank you very much.
Thank you. Our next question comes from Brian Dobson with Chardan. You may proceed with your question.
Hi, thanks so much for taking my question. Just a quick follow up on CENTERFFOLD. As far as user interaction where most of your subscribers using the content is that desktop or on the mobile application?
Good question. Thank you. The majority of the users are coming from mobile. So we're seeing about 90% of the traffic today on CENTERFFOLD coming from mobile devices.
And that mobile web to clarify.
And do you have any kind of demographic information on your core user base?
It is not something we're going to share at this point. We know who the users are, we know what they're interested in. And again, we launched this just to level set December 20 at the end of the year, we've consistently added creators, approaching 1000 verified at this point, long waitlist and those numbers will continue to grow as we add creators and we sort of turned on the marketing engine behind us.
One thing when we think about just the demographic in general, you were probably referring specifically to CENTERFFOLD but when you think of about Playboys audience today more broadly, I mean, it's an older Gen Z consumer. I mean, we see them spending hundreds of millions of dollars on our fashion and other products and engaging with us directly across all of our platforms. I mean, you can look at the Rabbitars, you've got 5000, individual holders of those, 11,953 Rabbitar, and people bought those they spent $900 per Rabbitar for pure batch value.
So, it is important across different channels you're going to have -- you're going to reach a different consumer. But right now, the brand itself is really resonant across a wide range of people, especially within a younger female demographic.
Yes, I think it also just allies and it also depends specifically when you're talking about CENTERFFOLD, who the creator is, so Cardi B's audience is different than Mia Khalifa’s audience. And what we've tried to do with our founding creators is making sure that there is scale there. We've talked about those numbers of social media followers before.
And then as we as we start to turn on the marketing and the revenue monetization, as we move into the second quarter here, with the new product features, that should start to grow, you would hope exponentially as the creators really push out the marketing of the platform to their fan bases.
Great, thank you very much. And then would it be possible for you to give us an update on leveraging the design team at Honey Birdette across your other platforms, in terms of lingerie offerings?
Absolutely. So we are seeing tremendous success in leveraging the Honey Birdette team. They have a significant amount of strength and in house design, really strong processes in terms of how we sourced the factories we should be bringing in to do lingerie and other categories that are highly technical.
And so our first introduction of our private label through Playboy, where we partnered with the Honey Birdette, team will be on the lingerie launch that we're targeting for later this year. And then what we're trying to do is build that out across other categories as well and kind of leveraging the Honey Birdette team as a jumping off point to bring all categories in terms of private label and design and merchandising in house.
Great, thank you very much.
Thank you, and I'm not showing any further questions at this time. I would now like to turn the call back over to Ben Kohn for any further remarks.
Just want to thank everyone for joining our call and we look forward to talking to you in the future. So appreciate it.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.