Shares of Joe’s Jeans Inc. lost more than a quarter of their value Friday after the firm reported that a lack of “newness and innovation” depressed its fourth-quarter earnings and sales.
For the three months ended Nov. 30, the Los Angeles-based company said profits plummeted 96 percent to $817,000, or 1 cent a diluted share, from $20.5 million, or 33 cents, in the year-ago quarter. Sales fell 6.6 percent to $23.6 million from $25.2 million. Wholesale sales decreased 17.5 percent to $19.5 million from $23.6 million. Retail sales more than doubled to $4.1 million from $1.6 million, boosted by the firm’s growing store base to 17 from six in the prior-year quarter.
Shares ended the day at $1.12, down 38 cents, or 25.3 percent. Earnings were released after the close of the market Thursday.
For the year, income dropped 89.4 percent to $2.6 million, or 4 cents a diluted share, from $24.5 million, or 41 cents, a year earlier. Sales grew 22.5 percent to $98.2 million from $80.1 million.
According to Marc Crossman, president and chief executive officer, the men’s wholesale channel grew, while women’s and international saw declines.
“Given that we were facing tough comparables against last years’ successful Jean Legging, we did not have enough newness and innovation of product to drive to the level of sales we had last year,” the ceo said.
He added that the company also failed to capitalize on the season’s trends in corduroys, ponte pants and super-stretch fabrics.
“With this in mind, we have made mid-stride adjustments to our product for spring and summer by injecting new silhouettes and innovative fabrics,” Crossman said.