VLOV men's apparel expects double digit growth in 2010
VLOV, Inc., a China-based designer of VLOV brand men's apparel, announced financial guidance for the fiscal year ending December 31, 2010.
Sales - 2010 net sales are expected to be in the range of $71 million to $75 million, which when compared to $64.3 million in 2009, represents year-over-year growth of potentially between 10.4% and 16.6%.
Gross Profit - 2010 gross profit is expected to be between $25.9 million and $27.8 million reflecting an anticipated gross margin of 36.5% to 37.0%, against 36.2% in 2009. Gross margins are expected to continue to benefit from the Company's productive outsourcing strategy, as well as higher average selling prices.
Operating Income - Income from operations in 2010 is expected to be from $17.7 million to $18.9 million, reflecting an anticipated operating margin of 24.9% to 25.2%. This compares to $13.6 million and 21.1% in 2009.
Adjusted Net Income - The Company expects full year 2010 adjusted net income (non-GAAP)(1) to be in the range of $13.2 million to $14.2 million, which could result in an increase of between 39.9% and 50.5% over adjusted net income of $9.4 million in 20092. Adjusted earnings per diluted share (non-GAAP)(2) are expected to be in the range of $0.68 to $0.73, potentially representing an increase of 15.3%-23.7% compared to adjusted earnings per diluted share of $0.59 in 2009(3). In calculating the adjusted net income per share for the full year 2010, the Company estimates a share count of 19,464,678 shares that includes both common and preferred shares outstanding but does not include the Company's outstanding warrants. This estimate represents a 16.7% increase over the 15,939,034 shares utilized to calculate 2009 adjusted earnings per share.
The Company's distributors operate through points of sale, including free-standing stores, shop-in-shops, counters and concessions. As part of the Company's ongoing efforts to evolve VLOV's lifestyle brand positioning to reflect a more stylish, chic and upscale image, the Company plans to shift the mix of VLOV locations to be more heavily weighted towards free-standing stores over the next two years. This will enable the Company to more prominently showcase and effectively market its lines including VLOV Crossover and Richard Wu.
Mr. Qingqing Wu, Chairman and CEO of VLOV, stated, "Our anticipated double-digit growth in sales and adjusted earnings is being driven by strong consumer demand across all of our VLOV product lines, including vo.vo, V9, VLOV Crossover and our higher end Richard Wu line. We are also experiencing growth across all of our product categories, including apparel and higher margin footwear and accessories. Additionally, our ability to elevate VLOV's design aesthetic and raise our brand profile - including higher price points -- is expected to drive sales increases and gross margin expansion throughout 2010. We recently held our Spring 2010 Sales Fair for our distributors to showcase our new designs. The positive response from our distributors to these new designs resulted in strong initial orders for the Fall season and highlights the importance these events play in our annual operating results."