Joe’s Jeans Inc. said Monday that its second-quarter net income rose 41.2 percent, helped by expense reduction and improving retail sales.
The Los Angeles-based denim maker’s profit for the three months ended May 31 expanded to $751,000, or 1 cent a diluted share, compared with income of $532,000, or 1 cent, in the year-ago quarter.
Net sales declined 4.6 percent to $24.7 million, from $25.9 million a year earlier.
Earnings per share matched expectations of analysts polled by Yahoo Finance while sales exceeded their estimate of $23.4 million.
Quarterly gross margin improved to 46.6 percent of sales versus year-ago margin of 44.4 percent, thanks to strength at department stores.
The firm cut selling, general and administrative costs 6.3 percent to $9.5 million, from $10.2 million a year earlier.
Retail sales increased 51.8 percent to $4.5 million, from $3 million in 2010, but analysts on the quarterly conference call honed in on the company’s waning wholesale sales, which fell 11.9 percent to $20.2 million, from $22.9 million.
“As we said last quarter, we made some midstream changes to our spring line which allowed us to see some areas of improvement in our business,” president and chief executive officer Marc Crossman said on the call. “When we don’t have the product, the conversion is down.”
Attributing the wholesale volume decline to weakness in its women’s and international divisions, Crossman said that more fashionable fall and holiday product should “resonate” with consumers and “bring about a shift” in its women’s domestic department store performance.
Pointing to strength in its men’s division, the ceo said the division continued to grow and is grabbing market share from competitors like Seven For All Mankind and AG Adriano Goldschmied.
For the first half, Joe’s posted a 23.2 percent dip in net income to $941,000, or 1 cent a share, versus $1.2 million, or 2 cents a share, a year earlier. Net sales dipped 6.5 percent to $45.9 million, from $49.1 million.