Retail

Net sales from our retail segment in the third quarter increased 24% to $5.5 million compared to $4.4 million in the prior year comparative period. The growth in retail sales was driven by a 7% same store sales increase and revenue contribution from 25 stores compared to 21 stores in the prior year period. Gross margins for our retail segment increased to 71% from 67% in the year ago period. Excluding the asset impairment charge a year ago, retail operating expense increased due to the expansion of our store base. Overall, for the third quarter of fiscal 2012, we had operating income of $140,000 compared to an operating loss of $1.3 million a year ago for our retail segment.

Mr. Crossman commented, “Our retail sales continue to perform well above our expectations, and in particular, our full price retail stores. Our full price retail stores continued to post double digit same store sales gains.”

Wholesale

Net sales for our wholesale segment in the third quarter of fiscal 2012 increased 26% to $24.8 million from $19.7 million in the prior year period. Sales gains came from our Joe’s men’s and international sales channels and the addition of sales from our new brand, else™. Gross margins for our wholesale segment were 40% for the third quarter of fiscal 2012 compared to 34% in the prior year comparable quarter. Impacting our gross margins in the third quarter of fiscal 2011 was an inventory write down of $1.6 million. For the third quarter, wholesale operating expense decreased to $3.4 million from $3.6 million a year ago. As a result of our improved sales and decreased operating expense, our wholesale operating income increased to $6.5 million in the third quarter of fiscal 2012 compared to $3.1 million in the prior year comparative period.

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