Citing continuing across-the-board sales growth and steady improvement in gross margin, Joe’s Jeans Inc. reported Tuesday that its second-quarter profits almost quintupled.
For the three months ended May 31, the Los Angeles-based firm best known for its high-end jeans registered net income of $2 million, or 3 cents a diluted share, up 378 percent from the $422,000, or 1 cent, reported during the comparable 2007 period. Net sales increased 18 percent to $18 million from $15.2 million in last year’s quarter.
The company said its gross margin increased to 47 percent, down from 48.4 percent in the second quarter of 2007, but 2 percentage points over the first quarter of 2008.
“It’s clear that it’s a tough economic environment for our specialty store business, given not only the economic climate, but also how promotional the department stores are being right now,” Joe’s Jeans president and chief executive officer Marc Crossman said during a conference call. “Nonetheless, we are continuing to benefit from our mid-America strategy of targeting areas where we previously did not have strong distribution. Aggressive road travel and hard work from our sales team has allowed us to open new accounts, which helped to offset the loss of accounts due to economic realities.”
Crossman said Joe’s is opening its first full-price retail store in October in Chicago’s trendy Bucktown section. The company also plans on distributing internationally, with its line scheduled to appear in Galeries Lafayette in Paris.
For the six months, net income grew more than 11 times to $2.9 million, or 4 cents a diluted share, from $249,000, or 1 cent. Sales advanced 14.4 percent to $33.2 million from $29 million.