CHINA: Ever-Glory Q3 profit slides on new stores
- Q3 profit down 15.9% to $2.3m
- Sales rose 29.1% to $69.3m
- Selling expenses jumped 102.2% to $8.6m
Chinese apparel supplier and retailer Ever-Glory has today (12 November) seen its third-quarter net profit slide 15.9% after the cost of opening more stores offset a jump in sales.
Net income declined to US$2.3m for the three months ended 30 September, compared to $2.7m last year. Income from operations fell 26.5% to $2.6m as a result of increased selling expenses for its retail business.
Sales rose 29.1% to $69.3m, with gains at Ever-Glory's retail and wholesale businesses.
Retail sales at La Go Go stores jumped 109.5% to $24.4m as the company opened 223 new stores compared to last year's quarter. Wholesale sales climbed 6.8% to $44.9m because of increased sales in the UK and Japan.
Selling expenses for the quarter increased 102.2% to $8.6m as new stores meant more retail employees and an increase in store decoration and marketing costs.
Looking ahead, Ever-Glory expects full-year profit to be in the range of $9.5m to $12m, while sales are forecast to be between $230m and $260m.
Ever-Glory Reports Third Quarter 2012 Financial Results
NANJING, China, Nov. 12, 2012 /PRNewswire/ -- Ever-Glory International Group, Inc. (the "Company" or "Ever-Glory") (NYSE MKT: EVK), a leading apparel supply chain manager and retailer based in China, today reported its financial results for the third quarter ended September 30, 2012.
Total sales for the quarter were $69.3 million, an increase of 29.1% compared to $53.7 million in the third quarter of last year. This increase was primarily attributable to increased sales in our retail business as well as our wholesale business.
Retail sales for the quarter from LA GO GO, the Company's branded retail division, increased 109.5% to $24.4 million, compared to $11.6 million last year. This increase was primarily due to the increase in new stores opened and same store sales. Ever-Glory had 644 LA GO GO stores as of September 30, 2012, compared to 421 LA GO GO stores as of September 30, 2011. Currently, there are LA GO GO stores in more than 20 provinces in China.
Wholesale sales generated from the Company's wholesale business for the quarter increased 6.8% to $44.9 million, compared to $42.0 million last year. This increase was primarily attributable to increased sales in the United Kingdom and Japan.
Total gross profit for the quarter was $15.3 million, or 22.1% of total sales, compared to $11.2 million, or 20.9% of total sales last year.
Selling expenses for the quarter increased 102.2% to $8.6 million compared to $4.3 million last year. As a percentage of sales, selling expenses increased 450 basis points to 12.4% compared to 7.9% last year. The increase was attributable to the increased number of stores, leading to increased numbers of retail employees and increased average salaries, as well as the increased store decoration and marketing expenses associated with the promotion of the LA GO GO brand.
General and administrative expenses for the quarter increased 20.6% to $4.2 million compared to $3.4 million last year. As a percentage of sales, general and administrative expenses decreased 40 basis points to 6.0% compared to 6.4% last year. The decrease was attributable to the increase in sales.
Income from operations for the quarter decreased 26.5% to $2.6 million compared to $3.5 million last year as a result of increased selling expenses for our retail business
For the third quarter, net income was $2.3 million, or $0.15 per diluted share, a decrease of 15.9% from $2.7 million, or $0.18 per diluted share in the third quarter of 2011.
Balance Sheet and Cash Flow
As of September 30, 2012, Ever-Glory had approximately $10.4 million of cash and cash equivalents, compared to approximately $8.8 million as of December 31, 2011. Ever-Glory had working capital of approximately $39.4 million as of September 30, 2012, and outstanding bank loans of approximately $38.6 million as of September 30, 2012.
For the fourth quarter of 2012, Every-Glory anticipates total net sales in the range of $70 to $90 million and net income in the range of $3.6 to $5.0 million. For full year 2012, Every-Glory anticipates total net sales in the range of $230 to $260 millionand net income in the range of $9.5 to $12 million. The full year revenue forecast is comprised of $140 to $160 million in anticipated wholesale revenue and $90 to $100 million in anticipated revenue from retail operations.
About Ever-Glory International Group, Inc.
Based in Nanjing, China, Ever-Glory International Group, Inc. is a leading apparel supply chain manager and retailer in China. Ever-Glory is the first Chinese apparel Company listed on the American Stock Exchange (now called NYSE MKT), and has a focus on middle-to-high grade casual wear, outerwear, and sportswear brands. Ever-Glory maintains global strategic partnerships in Europe, the United States, Japan and China, conducting business with several well-known brands and retail chain stores. In addition, Ever-Glory operates its own domestic chain of retail stores known as "LA GO GO".
Original source: http://www.prnewswire.com/news-releases/ever-glory-reports-third-quarter-2012-financial-results-178817211.html
Chinese apparel supplier and retailer Ever-Glory has seen its full year net income jump by one-third on growing sales....
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