Differential Brands Group found itself in the red for the fourth quarter ended Dec. 31.
For the three months, the net loss from continuing operations was $4.9 million, or 37 cents a diluted share, against net income from continuing operations of $700,000, or 7 cents, a year ago. Net sales more than doubled to $42 million from $20.2 million.
By segment, wholesale sales nearly tripled in the quarter to $28.5 million from $10.2 million, while consumer direct rose 28.7 percent to $13.2 million from $9.8 million. A category called “corporate and other” posted a sales increase of 63.1 percent to $354,000 from $217,000.
Michael Buckley, chief executive officer, said, “We are pleased with the progress we are making on a number of initiatives designed to drive organic growth across our brand.” He explained that the initiatives include improved product sourcing, investments in e-commerce and the consolidation of operations into a single platform to “leverage talent and expense.”
Buckley said the quarter saw favorable response from customers for the Robert Graham brand’s assortment shift to fashion basics. “As a result, wholesale sell-through improved at both specialty and department stores and consumer direct customers embraced the product, evidenced by an e-commerce sales increase of 63 percent versus the same quarter last year,” the ceo said.
The company worked on quality and fit improvements for its Hudson Jeans brand, as well as strategic sourcing changes. Those initiatives resulted in “modest growth in overall comparable sales during the quarter,” Buckley said.
He also said the company has completed the integration of its Swims acquisition, and is seeing “strong demand” for the line in the U.S. market.
“Looking ahead, we will continue to drive organic growth as we evolve and expand the product offering, work toward building out a retail and e-commerce presence and increase penetration in the wholesale channel,” Buckley said.
The company is still in the process of building out its platform, which focuses on branded operating companies in the premium apparel, footwear and accessories categories. It continually evaluates opportunities to acquire “accretive, complementary, premium brands.”
Shares of Differential Brands closed down 19.6 percent to a 52-week low of $1.75, but picked up 2.9 percent to $1.80 in after-market trading. The company reported fourth-quarter results after the day’s trading session ended.