Joe’s Jeans Inc. Monday posted lower first-quarter profits and sales as it fought to make up volume lost following the peak of the jeggings trend.
For the three months ended Feb. 28, income was down 72.6 percent to $190,000, or zero cents a diluted share, from $694,000, or 1 cent, in the year-ago quarter. The earnings per share figure for the most recent quarter matched the consensus analysts’ estimate carried by Yahoo Finance.
Sales fell 8.6 percent to $21.2 million from $23.2 million. Wholesale revenues dropped 18.2 percent to $17.5 million from $21.4 million, although retail sales in the period more than doubled to $3.7 million from $1.8 million.
The company said gross margins remained steady at 49 percent. Joe’s Jeans generated operating income of $523,000, compared with $1.4 million in last year’s first quarter.
Men’s wholesale business was up while women’s and international decreased in the quarter. Retail sales benefited from an expansion of the store base to 18 from six a year ago. Gross margins at retail were 68 percent of sales, up from 66 percent a year ago, on lower promotional activity.
Marc Crossman, president and chief executive officer of the Los Angeles-based company, said, “Our first quarter of fiscal 2011 continued to have tough comparables against last year’s successful jean legging.”
He said that declines in the women’s wholesale business led to midstream changes to the spring line, and “sell-throughs have improved substantially.”
Crossman said the firm’s men’s business continues to increase as its denim and other product offerings are resonating well with its customers.
The company released its results after the markets closed Monday. On Tuesday, shares fell 11 cents, or 9.7 percent, to $1.02.