Total company net sales for the third quarter of fiscal 2018 increased 3.5 per cent over the same quarter last year to a record $893 million. Comparable retail segment net sales, which include the comparable direct-to-consumer channel, increased 1 per cent. Excluding the estimated impact of the North American hurricanes in the quarter, comparable retail segment net sales increased 2 per cent. Comparable retail segment sales were driven by strong, double-digit growth in the direct-to-consumer channel, partially offset by negative retail store sales. Wholesale segment net sales increased 8.7 per cent.
The company’s effective tax rate for the third quarter of fiscal 2018 was 37.4 per cent compared to 33.5 per cent in the prior year period. The effective tax rate for the first nine months of fiscal 2018 was 37.2 per cent compared to 35.7 per cent in the first nine months of fiscal 2017. The increase in the effective tax rate for the three and nine months periods was primarily due to the ratio of certain foreign taxable profits and losses to global taxable profits and the adoption of the new accounting standard related to share-based compensation.
Selling, general and administrative expenses decreased by $4.7 million, or 2.1 per cent, during the three months ended October 31, 2017, compared to the prior year’s comparable period. The decrease in expenses and leverage were primarily due to savings associated with our store organisation project and lower share-based compensation expense, partially offset by increased investments in digital marketing expenditures to drive sales. Selling, general and administrative expenses increased by $0.5 million, or 0.1 per cent, during the nine months ended October 31, 2017, compared to the prior year’s comparable period.
"I am pleased to announce record third quarter sales, positive retail segment comps at all three brands and another strong performance from Free People wholesale," said Richard A Hayne, chief executive officer. "Record sales were driven by improved apparel execution across all channels and brands."
As of October 31, 2017, total inventory decreased by $3.9 million, or 0.9 per cent, on a year-over-year basis. Comparable retail segment inventory decreased 1 per cent at cost, which was partially offset by inventory to stock non-comparable stores. (RR)
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