Operating income up 244% at Joe's Jeans in Q1 FY'12
Joe's Jeans Inc. announced financial results for the first quarter ended February 29, 2012. Highlights were:
• Consolidated first quarter net sales increased 23% to $26.0 million;
• Retail store net sales increased 40%;
• Retail same store sales increased 22%;
• Wholesale net sales increased 19%; and
• Operating income increased 244% to $1.8 million for the first quarter of fiscal 2012.
For the first quarter of fiscal 2012, overall net sales were $26.0 million compared to $21.2 million from the prior year comparative period, or a 23% increase. Our overall gross profit for the quarter increased to $13.1 million from $10.4 million in the prior year comparative period, or a 26% increase.
Our overall gross margin in the first quarter of fiscal 2012 was 50% compared to 49% in the prior year first quarter. Operating expense in the first quarter of fiscal 2012 was $11.3 million compared to $9.9 million in the prior year period.
Operating expenses increased primarily as a result of operating four more retail stores this period than the year ago period and an increase in advertising expenses. We generated operating income of $1.8 million compared to $523,000 in the prior year comparative period and fully diluted earnings per share of $0.01 for the first quarter of fiscal 2012 compared to earnings per share of $0.00 in same period a year ago.
Marc Crossman, President and Chief Executive Officer, commented, "We are extremely pleased with our results for the quarter. The healthy increase in consolidated sales is indicative of two trends that we started seeing in the fourth quarter of fiscal 2011. First, our wholesale business has not only stabilized, but is growing across all channels. Second, our retail strategy continues to provide material diversification to our revenue base, now representing 20% of our revenue for the quarter."
Crossman continued, "Because we generated healthy increases in both retail and wholesale sales while maintaining expenses, this translated into strong growth in our operating income."
Net sales from our retail segment in the first quarter increased 40% to $5.2 million compared to $3.7 million in the prior year comparative period. The growth in retail sales was driven by revenue contribution from growing our store base from 18 to 22 stores in the comparative periods and a 22% same store sales increase. Gross margins for our retail segment increased to 70% from 68% in the year ago period.
Retail operating expense increased as a result of additional expenses associated with expanding our store base compared to the prior year period. Overall, for the first quarter, we had operating income of $253,000 compared to an operating loss of $119,000 a year ago for our retail segment.
Mr. Crossman commented, "Our retail stores posted same store sales gains that had a significant contribution to our growth. In particular, we are pleasedwith the same store sales gains at our full price stores, which increased by over 70%. With the first half of our second quarter underway, we are continuing to see solid same store sales growth in our stores."