NEW YORK (TheStreet) -- Joe's Jeans
(JOEZ - Get Report) is up 1.6% to $1.24 in aftermarket trading Wednesday.
The bump follows the clothing manufacturer's first quarter 2014 earnings report.
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Joe's reported year over year increases in consolidated first quarter net sales, up 61% to $47.3 million from $29.4 million; wholesale net sales, up 72%; and retail store net sales, up 22%.
Year over year gross profit for the first quarter increased 50% to $21.5 million from $14.3 million.
First quarter 2014 results are the first full quarter results available since the company acquired Hudson Clothing Holdings on Sept 30, 2013.
TheStreet Ratings team rates JOE'S JEANS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:"We rate JOE'S JEANS INC (JOEZ) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 49.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $3.66 million or 13.47% when compared to the same quarter last year. In addition, JOE'S JEANS INC has also vastly surpassed the industry average cash flow growth rate of -40.28%.
- 46.88% is the gross profit margin for JOE'S JEANS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.58% is in-line with the industry average.
- Currently the debt-to-equity ratio of 1.61 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, JOEZ maintains a poor quick ratio of 0.76, which illustrates the inability to avoid short-term cash problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, JOE'S JEANS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: JOEZ Ratings Report