Lifestyle products marketer Everlast achieves record results for Q1

30 Apr '07

3 min read

Everlast Worldwide Inc announced its financial results for its fiscal 2007 first quarter ended March 31, 2007.

For the first quarter ended March 31, 2007, net revenues increased 24% to $12.4 million, compared to $10.0 million in the same period in 2006. Growth in net revenue resulted from a 30% increase in sporting goods sales to a record $9.0 million, the third consecutive quarter of more than 30% year-over-year sales growth. The increase resulted from expanded distribution and continued strong sell-through for the Everlast brand.

Net licensing revenues increased 11% to approximately $3.3 million vs. $3.0 million in the first quarter of 2006. The growth was driven by organic increases in licensing income by our worldwide licensees, particularly in the United Kingdom, South Korea, and Chile.

This growth offset the termination of a European equipment licensee, who was not acting in accordance with our product quality and distribution standards. This licensee has since been replaced and shipping of equipment in Europe will resume in Q3 of this year.

In the first quarter of 2007, the Company's gross margin was 49.2%, compared with 44.5% in the first quarter a year ago. The increase in gross profit margin was achieved with an increase in revenues from the more highly profitable licensing business and 780 basis points improvement in sporting goods gross margins.

The increase in sporting goods gross margins was due to a combination of higher initial margins on new products, logistical and operational efficiencies, and improvements in sourcing, benefiting from initiatives implemented in the second half of fiscal 2006.

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