In the reported period, the US retail sales increased $32.3 million, or 7.7 per cent, to $454.0 million. US retail comparable sales increased 2.6 per cent, comprised of comparable e-commerce sales growth of 20.9 per cent, partially offset by a comparable stores sales decline of 3.2 per cent. Skip Hop contributed $1.8 million to segment net sales in the third quarter of fiscal 2017. The company also opened 12 stores and closed one store in the US.
Operating income in the third quarter of fiscal 2017 decreased $0.2 million, or 0.1 per cent, to $130.7 million, compared to $130.9 million in the third quarter of fiscal 2016. Operating margin decreased to 13.8 per cent, compared to 14.5 per cent in the third quarter of fiscal 2016.
Net income in the third quarter of fiscal 2017 increased $1.7 million, or 2.1 per cent, to $82.5 million, or $1.71 per diluted share, compared to $80.8 million, or $1.60 per diluted share, in the third quarter of fiscal 2016.
The company's adjusted net income (a non-GAAP measure) increased $1.0 million, or 1.3 per cent, to $82.2 million, compared to $81.1 million in the third quarter of fiscal 2016. Adjusted earnings per diluted share (a non-GAAP measure) in the third quarter of fiscal 2017 increased 5.8 per cent to $1.70, compared to $1.61 in the third quarter of fiscal 2016.
"We achieved our third quarter sales and earnings objectives, despite the significant impact of hurricanes in Texas, Florida, and Puerto Rico," said Michael D Casey, chairman and chief executive officer. "Our growth was led by our US retail and international businesses, including the contribution of our Skip Hop brand which we acquired earlier this year. We also announced today the acquisition of our licensee in Mexico, an investment which we believe will strengthen our leading market position in North America. Given the strength of our fall and holiday product offerings, together with the contribution of our new opportunities with Skip Hop, Amazon, China, and Mexico, we believe we are on track to achieve our growth objectives this year, our 29th consecutive year of sales growth," added Casey.
For the fourth quarter of fiscal 2017, the company projects net sales to increase approximately 10 per cent compared to the fourth quarter of fiscal 2016 and adjusted earnings per diluted share to increase approximately 21 per cent compared to adjusted earnings per diluted share of $1.79 in the fourth quarter of fiscal 2016. This forecast for the fourth quarter of fiscal 2017 adjusted earnings per diluted share excludes anticipated expenses of approximately $0.5 million related to acquisitions.
For fiscal 2017, the company expects net sales to increase approximately 6 per cent compared to fiscal 2016 and adjusted earnings per diluted share to increase approximately 9 per cent compared to adjusted earnings per diluted share of $5.14 in fiscal 2016. This forecast for fiscal 2017 adjusted earnings per diluted share excludes: anticipated expenses of approximately $4.6 million related to acquisitions, $2.7 million related to retail store restructuring, and $0.3 million related to the company's direct sourcing initiative, which includes severance and relocation costs, and a benefit of approximately $3.6 million related to an acquisition contingency fair value adjustment. (RR)
Fibre2Fashion News Desk – India
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