Joe's Jeans generates operating income of $1.5 mn in Q3

15 Oct '10

4 min read

Retail operating expense in third quarter of fiscal 2010 was $2.3 million compared to $968,000 a year ago. Retail expenses increased as a result of additional store payroll and rent costs associated with operating 14 retail stores compared to five in the prior year period and pre-opening costs associated with our full price store in Santa Monica, California. Our retail operating loss narrowed to $10,000 compared to $108,000 a year ago.

Corporate and Other
For the third quarter of fiscal 2010, our Corporate and other expense was $4.2 million compared to $3.6 million a year ago. Corporate and other expenses increased due to the additional employee overhead as we increased our headcount to support the new product categories.

In addition, income taxes had an impact on our net income. For the third quarter, our effective income tax rate was 60% compared to 30% in the prior year period. Because of the non-deductibility of the earn-out we continue to pay as part of the original merger consideration with JD Holdings Inc., our reported income tax rate is substantially higher than the statutory rate of 40% and our cash tax rate of 15%.

Joe's Jeans Inc

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