Carlyle cashes in on Supreme, boosts earnings past estimates

The Carlyle Group’s big bet on a trendy fashion brand paid off in the fourth quarter of 2020, helping the firm to an earnings day surprise that sent its stock soaring.

Carlyle posted net income of $518.8 million in Q4, a sharp turnaround after the firm lost around $8 million in the same period a year earlier.

That boost was driven in large part by selling its stake in Supreme, a New York-based streetwear company, to apparel conglomerate VF in a November deal that valued Supreme at around $2.1 billion. The exit came just three years after Carlyle bought a 50% stake in the company for half that price.

In addition to the spike in income, Carlyle’s distributable earnings jumped to $236.9 million in Q4 2020, or 64 cents per share. That easily outpaced reported analyst expectations of 44 cents per share.

Carlyle’s private equity portfolio appreciated 11% over the final three months of the year, slightly trailing the S&P 500’s 11.7% gain. Add it all up, and Carlyle’s shares soared 7% on Thursday, taking the Washington, DC-based firm’s market cap to some $12.7 billion.

Source: Pitchbook