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Ever-Glory reports 2010 full year financial results
31 Mar '11
5 min read
"In 2011, we plan to 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."
Gross profit in Every-Glory's wholesale business increased 19.6% to $16.1 million from $13.5 million a year ago. Gross margin for the wholesale business decreased to 15.4% in 2010 compared to 17.6% in 2009. The decrease was primarily due to an increase in raw material prices, outsourced production costs, and consequently decreased average margin on overseas orders. In response, the Company adjusted its wholesale strategy and started to vigorously develop the Chinese wholesale market in 2010.
Gross profit in Every-Glory's retail business increased 107.6% to $10.1 million from $4.8 million a year ago. Gross margin for the retail business decreased to 34.3% in 2010 compared to 36.7% in 2009. The decrease in gross margin was primarily due to the lowered retail tag price that was implemented in an effort to increase sales volume.
Total gross profit in 2010 increased 42.9% to $26.2 million from $18.3 million a year ago. Gross margin decreased to 19.5% in 2010, compared to 20.4% in 2009.
Selling expenses increased 109.5% to $9.8 million in 2010, an increase of $5.1 million compared to 2009. As a percent of sales, selling expense accounted for 7.3% of our total sales in 2010, an increase of 2.1% compared to 2009. The increase was attributable to the enlarged number of retail employees and increased average salary, as well as the increased decoration and marketing expenses associated with the promotion of LA GO GO brand.
General and administrative expenses increased 29.8% to $9.8 million in 2010, an increase of $2.2 million compared to 2009. As a percentage of sales, general and administrative expenses accounted for 7.3% of our total sales in 2010, a decrease of 1.1% compared to 2009.
The total general and administrative expenses increase was attributable to an increase in payroll for additional management and design and marketing staff as a result of our business expansion. The decrease in general and administrative expenses as a percentage of total sales was due to an increase in our sales.
As a result, income from operations in 2010 increased 8.2% to $6.6 million compared to $6.1 million in 2009.
Business Outlook
For the first quarter of 2011, Every-Glory anticipates total net sales of $45 to $55 million and net income of $1.8 to $2.2 million. For full year 2011, Every-Glory anticipates total net sales between $180 and $215 million and net income between $7.3 and $9.0 million. The full year revenue forecast is comprised of $120 to $150 million in expected wholesale revenue and $60 to $65 million in expected revenuefrom retail operations.
Gross profit in Every-Glory's wholesale business increased 19.6% to $16.1 million from $13.5 million a year ago. Gross margin for the wholesale business decreased to 15.4% in 2010 compared to 17.6% in 2009. The decrease was primarily due to an increase in raw material prices, outsourced production costs, and consequently decreased average margin on overseas orders. In response, the Company adjusted its wholesale strategy and started to vigorously develop the Chinese wholesale market in 2010.
Gross profit in Every-Glory's retail business increased 107.6% to $10.1 million from $4.8 million a year ago. Gross margin for the retail business decreased to 34.3% in 2010 compared to 36.7% in 2009. The decrease in gross margin was primarily due to the lowered retail tag price that was implemented in an effort to increase sales volume.
Total gross profit in 2010 increased 42.9% to $26.2 million from $18.3 million a year ago. Gross margin decreased to 19.5% in 2010, compared to 20.4% in 2009.
Selling expenses increased 109.5% to $9.8 million in 2010, an increase of $5.1 million compared to 2009. As a percent of sales, selling expense accounted for 7.3% of our total sales in 2010, an increase of 2.1% compared to 2009. The increase was attributable to the enlarged number of retail employees and increased average salary, as well as the increased decoration and marketing expenses associated with the promotion of LA GO GO brand.
General and administrative expenses increased 29.8% to $9.8 million in 2010, an increase of $2.2 million compared to 2009. As a percentage of sales, general and administrative expenses accounted for 7.3% of our total sales in 2010, a decrease of 1.1% compared to 2009.
The total general and administrative expenses increase was attributable to an increase in payroll for additional management and design and marketing staff as a result of our business expansion. The decrease in general and administrative expenses as a percentage of total sales was due to an increase in our sales.
As a result, income from operations in 2010 increased 8.2% to $6.6 million compared to $6.1 million in 2009.
Business Outlook
For the first quarter of 2011, Every-Glory anticipates total net sales of $45 to $55 million and net income of $1.8 to $2.2 million. For full year 2011, Every-Glory anticipates total net sales between $180 and $215 million and net income between $7.3 and $9.0 million. The full year revenue forecast is comprised of $120 to $150 million in expected wholesale revenue and $60 to $65 million in expected revenuefrom retail operations.
Ever-Glory International Group Inc
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