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Joe's Jeans Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: JOEZ

We recently announced the location of our 25th retail store on Melrose in Los Angeles and expect to have both this and our 24th store in South Coast Plaza open in August, in time for the fall shopping season. Both of our new stores are located in highly coveted shopping destinations.

We expect these stores to increase brand awareness with new and existing customers. We expect the capital expenditures for these 2 new stores to be consistent with Aventura and SoHo which costs about $200,000 each to build out. Looking forward, we have signed leases for another 2 stores opening later this year. We are continuing to aggressively pursue our retail strategy and expect to have several more leases signed in 2012. Our wholesale sales increased by 14% to $22.9 million. Sales gains came from both our men's and women's sales channels and from our else brands. Our Joe's men's wholesale sales continued its strong growth trajectory with an increase of 11% over the prior-year period. We continue to see strong growth in denim and consistent growth in collection. I would point out that colored denim also proved to be a volume driver on our men's business as it was incremental revenue to our denim plans. Similar to last quarter, we saw increases in our door count and dollars per door.

Our Joe's women's wholesale sales grew 8% this quarter. We saw our women's denim business draw positive increases in both department and specialty stores. Again, a portion of our sales growth was attributable to the strength of our 55 Colors program. In addition, we generated a meaningful amount of reorder business as a result of our printed denim campaign. Our international sales also increased this quarter compared to the year-ago period. Similar to our domestic wholesale business, we saw significant increases in international women's denim sales as a result of our printed denim and 55 Colors program. We recently announced a new distribution agreement for France and currently the restructuring of the Paris office. As a result, our European business generated a healthy profit slate during the quarter. We continue to believe the international market represents a sizable opportunity for us and with this new distribution model, we expect to reduce corporate overhead and increase profitability.

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