Joe’s Jeans Inc. (the “Company”) (NASDAQ: JOEZ) today announced
financial results for the second quarter ended May 31, 2012.
Highlights were:
- Consolidated second quarter net sales
increased 16% to $28.6 million;
- Retail store net sales increased
26%;
- Retail same store sales increased
10%;
- Wholesale net sales increased 14%;
and
- Operating income increased 82% to $3.1
million for the second quarter of fiscal 2012.
For the second quarter of fiscal 2012, overall net sales were
$28.6 million compared to $24.7 million from the prior year
comparative period, or a 16% increase. Our overall gross profit for
the quarter increased to $13.6 million from $11.5 million in the
prior year comparative period, or an 18% increase. Our overall
gross margin in the second quarter of fiscal 2012 and fiscal 2011
was consistent at 47%. Operating expense in the second quarter of
fiscal 2012 was $10.5 million compared to $9.8 million in the prior
year period. Operating expenses increased primarily as a result of
operating three more retail stores this period than the year ago
period. We generated operating income of $3.1 million compared to
$1.7 million in the prior year comparative period and fully diluted
earnings per share of $0.02 for the second quarter of fiscal 2012
compared to earnings per share of $0.01 in same period a year
ago.
Marc Crossman, President and Chief Executive Officer, commented,
“We are pleased to report record sales of $28.6 million for the
quarter, a 16% increase over the prior year period. Both our
domestic wholesale and retail segments posted healthy increases and
our retail segment continued to provide diversification to our
revenue base. With these positive results, our operating income
increased 82% to $3.1 million.”
Retail
Net sales from our retail segment in the second quarter
increased 26% to $5.7 million compared to $4.5 million in the prior
year comparative period. The growth in retail sales was driven by a
10% same store sales increase and revenue contribution from 23
stores compared to 20 stores in the prior year period. Gross
margins for our retail segment increased to 71% from 65% in the
year ago period. Retail operating expense increased as a result of
additional expenses associated with expanding our store base.
Overall, for the second quarter, we had operating income of
$570,000 compared to $143,000 a year ago for our retail
segment.
Mr. Crossman commented, “Our retail sales continue to perform
well above our expectations, and in particular, our full price
retail stores. Full price retail stores posted same store sales
gains of 38% for the quarter.” Crossman continued, “With healthy
gross margin expansion and same store sales gains, our retail
segment posted record revenue and profitability this quarter.”
Wholesale
Net sales for our wholesale segment in the second quarter of
fiscal 2012 increased 14% to $22.9 million from $20.2 million in
the prior year period. Sales gains came from both our men and
women’s sales channels and the addition of our new brand else™.
Gross margins for our wholesale segment were 41% for the second
quarter of fiscal 2012 compared to 43% in the prior year comparable
quarter. For the second quarter, wholesale operating expense
increased to $3.2 million from $2.9 million a year ago. As a result
of our improved sales, our wholesale operating income increased to
$6.3 million in the second quarter of fiscal 2012 compared to $5.7
million in the prior year comparative period.
Mr. Crossman commented, “Our earlier commitment to introduce
more fashion offerings, like printed denim and our ‘55 Colors,’
translated into growth.” Crossman continued, “As we move into our
third quarter with Fall and Back-to-School shopping, we are excited
about our new product offerings with our wholesale partners and the
expansion of our else™ brand with Macy*s.”
Corporate and Other
For the second quarter of fiscal 2012, our corporate and other
expenses were $3.8 million compared to $4.2 million in the second
quarter a year ago. Corporate and other expenses decreased due to
the non-renewal of certain print and other advertising commitments
originally launched in the fourth quarter of fiscal 2011.
The Company will host a conference call on Monday, July 16, 2012
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, 2012.
To access the live call, please dial (866) 713-8310 (U.S.) or
(617) 597-5308 (International). The conference ID number and
participant passcode is 51530582 and is entitled the “Q2 2012 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 6:30 p.m. Eastern Time on July 16, 2012
until 11:59 p.m. Eastern Time on July 23, 2012 by dialing (888)
286-8010 (U.S.) or (617) 801-6888 (international) and using the
conference passcode 59911674. 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 OPERATIONS (in thousands, except per share
data) Three months ended
May 31, 2012 May 31, 2011
(unaudited) Net sales $ 28,640 $ 24,701 Cost of goods sold
15,080 13,180 Gross profit
13,560 11,521 Operating expenses Selling, general and
administrative 10,148 9,545 Depreciation and amortization
340 291 10,488
9,836 Operating income 3,072 1,685 Interest
expense
103 129 Income
before provision for taxes 2,969 1,556 Income taxes
1,551 805 Net income
$ 1,418 $ 751
Earnings per common share - basic
$
0.02 $ 0.01 Earnings
per common share - diluted
$ 0.02
$ 0.01 Weighted average shares
outstanding Basic 65,234 63,784 Diluted 66,459 64,572
The following table sets forth certain segment information for
the three months ended May 31, 2012 and 2011, respectively:
JOE'S JEANS INC. AND SUBSIDIARIES Segment Results
(in thousands) Three months
ended May 31, 2012 May 31,
2011 (unaudited) Net sales: Wholesale $ 22,947 $
20,187 Retail
5,693
4,514 $ 28,640
$ 24,701 Gross Profit:
Wholesale $ 9,504 $ 8,575 Retail
4,056
2,946 $ 13,560
$ 11,521 Operating
income (loss): Wholesale $ 6,281 $ 5,709 Retail 570 143 Corporate
and other
(3,779 )
(4,167 ) $
3,072 $ 1,685
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 Joe’s® brand 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 third 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 this release should be read in conjunction with that
annual report 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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