In the first quarter of 2018, net income increased 25 per cent to a record $45.1 million, or $0.64 per diluted share, compared with the net income of $36.0 million, or $0.51 per diluted share in the first quarter of 2017. Non-GAAP first quarter 2018 net income increased 48 percent to $54.5 million, or $0.77 per diluted share, compared with non-GAAP first quarter 2017 net income of $36.9 million, or $0.52 per diluted share.
"We are pleased to report better than expected first quarter net sales and profitability led by strength in our direct-to-consumer businesses, growth in our wholesale businesses, including a return to growth in U.S. wholesale, and the favorable effect of strengthening foreign currencies relative to the U.S. dollar. Gross margin exceeded expectations, and we maintained SG&A discipline while continuing to invest in our strategic priorities," president and chief executive officer Tim Boyle said.
The company's operating income was recorded at $59.3 million, or 9.8 percent of net sales, increased 24 per cent compared to operating income of $48.0 million, or 8.8 percent of net sales, in the first quarter of 2017. Non-GAAP foperating income increased 43 per cent to $70.3 million, or 11.7 percent of net sales, compared to non-GAAP operating income of $49.3 million, or 9.1 percent of net sales, in the first quarter of 2017.
"First quarter 2018 net sales and earnings results, as well as healthy advance orders for Fall 2018 across our regions demonstrate the power of our global brands and our initiatives to become a more brand-led and consumer-focused organization. Our powerful balance sheet, with $808.2 million in cash and short-term investments, and no long-term debt, provides the flexibility to invest in the business as our major markets evolve," added Boyle.
The company currently expects 2018 net sales growth of approximately 8.0 to 10.0 per cent (prior 5.5 to 7.5 percent), compared with 2017 net sales of $2.47 billion. The company expects non-GAAP net sales growth of approximately 6.5 to 8.5 per cent (prior 4.0 to 6.0 percent) which excludes approximately $40 million in net sales associated with the new revenue accounting standard.
The company expects 2018 net income between approximately $213 million and $220 million (prior between $203 million and $211 million), and non-GAAP net income between approximately $231 million and $238 million (prior between $224 million and $231 million), or diluted earnings per share between approximately $3.01 and $3.11 (prior between $2.88 and $2.98), and non-GAAP diluted earnings per share between $3.27 and $3.37 (prior between $3.17 and $3.27).
"We are also pleased to increase our full year 2018 financial outlook as a result of better than expected first quarter net sales and profitability, higher than initially planned Fall 2018 advance wholesale orders, including continued improvement in U.S. wholesale net sales across all of our brands, and the favorable effect of strengthening foreign currencies relative to the U.S. dollar. When considering our plans for the balance of the year, we have made the decision to accelerate investment in our strategic priorities," concluded Boyle. (RR)
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