For the second quarter of fiscal 2013, overall net sales were $30.9 million compared to $28.6 million from the prior year comparative period, or an 8% increase. Our overall gross profit for the quarter was essentially flat at $13.5 million compared to $13.6 million in the prior year comparative period, a less than 1% decrease. Our overall gross margin in the second quarter of fiscal 2013 was 44% compared to 47% in the prior year period.

Gross margins decreased as a result of an increased mix of sales from our lower margin line, else, and the increased expense of producing our Vintage Reserve line in the U.S. Operating expense in the second quarter of fiscal 2013 was $11.4 million compared to $10.5 million in the prior year period. Our operating income decreased to $2.1 million for the quarter from $3.1 million in the prior year period and our fully diluted earnings per share were $0.02 per share for the second quarter of fiscal 2013.

Marc Crossman, President and Chief Executive Officer, commented, “Our second quarter of fiscal 2013 resulted in continued top line growth for the Company.” Crossman continued, “With that said, both our wholesale and retail segments posted healthy growth for the quarter which translated into strong consolidated revenues. Further, we will continue to work to reduce our input costs on our else brand and transition our Vintage Reserve line to our facility in Mexico.”

Wholesale

Net sales for our wholesale segment in the second quarter of fiscal 2013 increased 6% to $24.4 million from $22.9 million in the prior year period. Sales gains came from our Joe’s men’s sales channels and our else brand. Gross margins for our wholesale segment were 37% for the second quarter of fiscal 2013 compared to 41% in the prior year comparable quarter. For the second quarter, wholesale operating expense was comparable to the prior year at $3.2 million in both periods. Our wholesale operating income decreased to $5.7 million in the second quarter of fiscal 2013 from $6.3 million in the prior year comparative period.

Mr. Crossman commented, “We continue to be pleased with the performance of our men’s Joe’s business, as our strong core basics continue to perform above our expectations. In addition, our else brand continues to add to our top line results.” Crossman continued, “Our women’s Joe’s wholesale business decreased single digits primarily due to tough comparisons against our successful '55 Colors' and printed denim campaigns from a year ago.

This tough comparison was somewhat mitigated by our Vintage Reserve line. As expected, the second quarter marked the toughest comparable quarter for us and the premium denim industry as it relates to color. We expect this trend to subside in future quarters.”