Apparel supply chain manager Ever-Glory's total net sales up
Ever-Glory International Group Inc., a leading apparel supply chain manager and retailer based in China, reported its financial results for the third quarter ended September 30, 2011.
During the third quarter of 2011, net sales increased 68.1% to $53.7 million compared to $31.9 million in the third quarter of 2010. The increase was attributable to increased sales in both Ever-Glory's retail and wholesale businesses.
Retail sales from LA GO GO, the Company's branded retail division, increased 83.8% to $11.6 million, compared to $6.3 million in the third quarter of 2010. This increase was primarily due to the increase in new stores opened and same store sales. Ever-Glory had 421 LA GO GO stores as of September 30, 2011, compared to 214 LA GO GO stores at September 30, 2010. LA GO GO stores are located in more than 20 provinces in China.
Sales generated from the Company's wholesale business increased 64.2% to $42.0 million, compared to $25.6 million in the third quarter of 2010. This increase was primarily attributable to increased sales in the PRC, the United Kingdom and the United States.
The increased sales in the wholesale segment were primarily due to the following factors:(i) the progressive adjustment of our wholesale client and product portfolio has resulted in an increase of orders in the wholesale segment; (ii) in response to the global economic uncertainty, in mid-2010 we adjusted our sales strategy to develop more wholesale customers in China. (iii) expansion of our outsourcing base to Vietnam and Cambodia starting from the third quarter of 2010, which significantly increased our production capacity to process more orders.
In the third quarter of 2011, gross profit was $11.2 million, an increase of 76.3% compared to the same period in 2010. Gross margin increased 1.0% to 20.9% in the third quarter of 2011, compared to 19.9% in the third quarter of 2010. The increase was mainly due to lower outsourced manufacturing costs.
"I am very pleased to report that in the third quarter of 2011, our sales in both wholesale and retail segments continued to increase," commented by Mr. Edward Yihua Kang, Chairman of the Board and Chief Executive Officer of Ever-Glory. "We are especially encouraged by the rapid expansion of LA GO GO. As of September 30, 2011, we have 421 LA GO GO stores in China, We achieved our goal in advance to open an additional 80-100 new stores in 2011. We had only 293 stores at the end of 2010.
"We will continue to develop LA GO GO through perfecting design styles, improving store management efficiency and opening more stores in desired locations," continued Mr. Kang. "We are confident that, through these measures, we can enhance same-store sales, expand LA GO GO's market penetration and increase its brand influence in China."
Selling expenses increased 86.4% to $4.3 million in the third quarter of 2011 from $2.3 million in the third quarter of 2010. The increase was attributable to the enlarged number of retail employees and higher average salaries, as well as increased store decoration and marketing expenses associated with the promotion of the LA GO GO brand.