Joe’s Jeans Inc. (the “Company”) (NASDAQ:JOEZ) today announced
financial results for the second quarter ended May 31, 2013.
Highlights were:
- Consolidated second quarter net sales
increased 8% to $30.9 million;
- Wholesale net sales increased 6%;
- Retail store net sales increased 14%;
and
- Operating income was $2.1 million with
fully diluted earnings per share of $0.02.
For the second quarter of fiscal 2013, overall net sales were
$30.9 million compared to $28.6 million from the prior year
comparative period, or an 8% increase. Our overall gross profit for
the quarter was essentially flat at $13.5 million compared to $13.6
million in the prior year comparative period, a less than 1%
decrease. Our overall gross margin in the second quarter of fiscal
2013 was 44% compared to 47% in the prior year period. Gross
margins decreased as a result of an increased mix of sales from our
lower margin line, else™, and the increased expense of producing
our Vintage Reserve line in the U.S. Operating expense in the
second quarter of fiscal 2013 was $11.4 million compared to $10.5
million in the prior year period. Our operating income decreased to
$2.1 million for the quarter from $3.1 million in the prior year
period and our fully diluted earnings per share were $0.02 per
share for the second quarter of fiscal 2013.
Marc Crossman, President and Chief Executive Officer, commented,
“Our second quarter of fiscal 2013 resulted in continued top line
growth for the Company.” Crossman continued, “With that said, both
our wholesale and retail segments posted healthy growth for the
quarter which translated into strong consolidated revenues.
Further, we will continue to work to reduce our input costs on our
else™ brand and transition our Vintage Reserve line to our facility
in Mexico.”
Wholesale
Net sales for our wholesale segment in the second quarter of
fiscal 2013 increased 6% to $24.4 million from $22.9 million in the
prior year period. Sales gains came from our Joe’s® men’s sales
channels and our else™ brand. Gross margins for our wholesale
segment were 37% for the second quarter of fiscal 2013 compared to
41% in the prior year comparable quarter. For the second quarter,
wholesale operating expense was comparable to the prior year at
$3.2 million in both periods. Our wholesale operating income
decreased to $5.7 million in the second quarter of fiscal 2013 from
$6.3 million in the prior year comparative period.
Mr. Crossman commented, “We continue to be pleased with the
performance of our men’s Joe’s® business, as our strong core basics
continue to perform above our expectations. In addition, our else™
brand continues to add to our top line results.” Crossman
continued, “Our women’s Joe’s® wholesale business decreased single
digits primarily due to tough comparisons against our successful
'55 Colors' and printed denim campaigns from a year ago. This tough
comparison was somewhat mitigated by our Vintage Reserve line. As
expected, the second quarter marked the toughest comparable quarter
for us and the premium denim industry as it relates to color. We
expect this trend to subside in future quarters.”
Retail
Net sales from our retail segment in the second quarter
increased 14% to $6.5 million compared to $5.7 million in the prior
year comparative period. The growth in retail sales was driven by
revenue contribution from eight new locations. Same stores sales,
which are stores open the full 12 months and e-shop, were a
negative 6% on a comparative basis. Similar to wholesale, this same
store sales decrease was due to tough comparisons at our full price
stores against our successful “55 Colors” and printed denim program
in the year ago period. Gross margins for our retail segment were
comparable in both periods at 70% and 71%, respectively. Retail
operating expense increased due to the expansion of our store base.
Overall, for the second quarter of fiscal 2013, we had operating
income of $132,000 compared to operating income of $570,000 a year
ago for our retail segment.
Mr. Crossman commented, “We are pleased with our continued
growth in retail net sales, as our retail strategy continues to
evolve and mature. In particular, we are pleased to see that our
strategy to target smaller footprint stores in top locations is
paying off, as those stores continue to be top performers.”
Corporate and Other
For the second quarter of fiscal 2013, our corporate and other
expenses were $3.7 million, which was comparable to the prior year
period at $3.8 million.
The Company will host a conference call on Monday, July 15, 2013
at 4:30 p.m. Eastern Time with the Company’s Chief Executive
Officer, Marc Crossman, and its Chief Financial Officer, Hamish
Sandhu, to discuss financial results for the second quarter ended
May 31, 2013.
To access the live call, please dial 1(800) 264-7882 (U.S.) or
1(847) 413-3708 (International). The conference ID number and
participant passcode is 35088487 and is titled the “Q2 2013 Joe’s
Jeans Inc. Earnings Conference Call.” The information provided on
the teleconference is only accurate at the time of the conference
call, and the Company will take no responsibility for providing
updated information. A telephone replay of the conference call will
be available beginning at 7:00 p.m. Eastern Time on July 15, 2013
until 11:59 p.m. Eastern Time on July 22, 2013 by dialing 1(888)
843-7419 (U.S.) or 1(630) 652-3042 (International) and using the
conference passcode 35088487#. In addition, the conference call
will be archived for two weeks on the Company’s website at
www.joesjeans.com.
JOE'S JEANS INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME AND COMPREHENSIVE
(LOSS) INCOME (in thousands, except per share data)
Three months
ended May 31, 2013
May 31, 2012 (unaudited)
Net sales $ 30,874 $ 28,640 Cost of goods sold
17,369 15,080 Gross profit 13,505
13,560 Operating expenses Selling, general and
administrative 10,840 10,148 Depreciation and amortization
542 340 11,382
10,488 Operating income 2,123 3,072 Interest
expense
127 103 Income
before provision for taxes 1,996 2,969 Income tax expense
823 1,551 Net income and
comprehensive income
$ 1,173
$ 1,418 Earnings per common share
- basic
$ 0.02 $
0.02 Earnings per common share - diluted
$ 0.02 $ 0.02
Weighted average shares outstanding: Basic 67,047 65,234
Diluted 68,411 66,459
The following table sets forth certain segment information for
the three months ended May 31, 2013 and 2012, respectively:
JOE'S JEANS INC. AND SUBSIDIARIES SEGMENT
RESULTS (in thousands)
Three months ended May 31,
2013 May 31,
2012 (unaudited) Net sales: Wholesale $ 24,366 $
22,947 Retail
6,508
5,693 $ 30,874
$ 28,640 Gross profit:
Wholesale $ 8,955 $ 9,504 Retail
4,550
4,056 $ 13,505
$ 13,560 Operating
income (loss): Wholesale $ 5,716 $ 6,281 Retail 132 570 Corporate
and other
(3,725 )
(3,779 ) $
2,123 $ 3,072
About Joe’s Jeans Inc.
Joe’s Jeans Inc. designs, produces and sells apparel and
apparel-related products to the retail and premium markets under
the Joe's® brand and related trademarks. More information is
available at the Company website at www.joesjeans.com.
This release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, as amended. The matters discussed in
this document involved estimates, projections, goals, forecasts,
assumptions, risks and uncertainties that could cause actual
results or outcomes to differ materially from those expressed in
the forward-looking statements. All statements in this news release
that are not purely historical facts are forward-looking
statements, including statements containing the words “intend,”
“believe,” “estimate,” “project,” “expect” or similar expressions.
Any forward-looking statement inherently involves risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or
contribute to such differences include, but are not limited to: the
risk that the Company will be unsuccessful in gauging fashion
trends and changing customer preferences; the risk that changes in
general economic conditions, consumer confidence, or consumer
spending patterns will have a negative impact on the Company’s
financial performance or strategies; the highly competitive nature
of the Company’s business in the United States and internationally
and its dependence on consumer spending patterns, which are
influenced by numerous other factors; the Company’s ability to
respond to the business environment and fashion trends; continued
acceptance of the Company’s brands in the marketplace; the ability
to generate positive cash flow from operations; competitive
factors, including the possibility of major customers sourcing
product overseas in competition with our products; the risk that
acts or omissions by the Company’s first party vendors could have a
negative impact on the Company’s reputation; a possible oversupply
of denim in the marketplace; and other risks. The Company discusses
certain of these factors more fully in its additional filings with
the SEC, including its last annual report on Form 10-K filed with
the SEC and its Quarterly Report on Form 10-Q filed today and this
release should be read in conjunction with those reports together
with all of the Company’s other filings made with the SEC through
the date of this release. The Company urges you to consider all of
these risks, uncertainties and other factors carefully in
evaluating the forward-looking statements contained in this
release.
Any forward-looking statement is based on information current as
of the date of this document and speaks only as of the date on
which such statement is made, and the Company undertakes no
obligation to update these statements to reflect events or
circumstances after the date on which such statement is made.
Readers are cautioned not to place undue reliance on
forward-looking statements.
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