Ever-Glory International Group, Inc.
Q1 2015 Earnings Call Transcript

Published:

  • Operator:
    Welcome to the Ever-Glory International Group First Quarter 2015 Earnings Conference Call. Today's conference is being recorded. At this time, I would now like to turn the conference over to Wilson Bow of Ever-Glory International Group. Please go ahead, sir.
  • Wilson Bow:
    Thank you, operator. Good morning, and welcome to Ever-Glory International first quarter 2015 earnings conference call. Before we begin, we would like to take a moment to go through the company's Safe Harbor policies. The statements contained in the conference call, which are not historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those projected in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC. Ever-Glory does not undertake any obligation to update forward-looking statements except as required by applicable law. Now, I would like to turn the call over to Jason Wang, Chief Financial Officer who will provide a financial review. Jason please?
  • Jason Wang:
    Thank you. Good morning everyone, welcome to Ever-Glory's first quarter of 2015 earnings conference call. I would like to use this time to highlight the key points in the first quarter of 2015. Total sales for the quarter was $97.9 million, a decrease of 7.7% compared to 106 million in the first quarter of last year. This decrease was mainly due to 2.9% decreased sales in retail business as well as 15.6% decrease in sales in wholesale business. For the first quarter of 2015 retail sales from the company's branded fashion apparel retail division, decreased 2.9% to $54.6 million compared to $66.6 million last year. This decrease was mainly due to the decrease in same store sales. Ever-Glory had 1206 retail stores as of March 31, 2015, compared to 976 retail stores at March 31, 2014. For the first quarter of 2015, wholesale sales decreased 19.6% to $33.3 million, compared to $39.4 million last year. The decrease was mainly due to decreased sales in Germany, France, Europe, Japan and United States partially offset for increased sales in United Kingdom and People’s Republic of China. Total gross profit for the quarter increased 18.7% to 30.6 million compared to 25.8 million last year, seasonal growth margin increased 700 basis points to 31.3% compared to 24.3% last year. Gross profit for retail business increased 19.4% to 23.5 million compared to 19.6 million last year. Gross margin increased 680 basis point to 36.3% compared to 29.5% last year. The increase was mainly due to decreased production cost and [indiscernible] cost. Gross profit for wholesale business increased 15.5% to 7.2 million compared to 6.1 million last year, gross margin increased 519 basis points to 21.5% compared to 15.6% last year. The increase was mainly due to decreased raw material costs as well as our strength to forecast our sales to higher margin wholesale customers. Selling expenses for the quarter increased 25.6% to 23.3 million compared to 15.1 million last year. As a percentage of sales, selling expenses increased 550 basis points to 20.7% compared to 15.2% last year. The increase was mainly due to the increased average salaries and increased number of stores leading to increased number of retail employees as well as the increased store [indiscernible] and marketing expenses associated with the promotion of the retail brand. General and administrative expenses for the quarter increased 8.1% to 6.9 million compared to 6.4 million last year as a percentage of total sales general and administrative expenses increased 110 basis points to 7.1% compared to 6% last year. The increase was mainly due to an increase in pay-roll for additional management and design and matching staff. Income from operations for the quarter increased 5.4% to 3.4 million compared to 3.3 million last year as a percentage of sales income from operations increased 40 basis points to 3.5% compared to 3.1% last year. Net income for the first quarter 2015 and 2014 was 2.4 million respectively. Basic and diluted earnings per share were $0.15 for the first quarter of 2015 and 2014 respectively. Finally I want to express my thanks to our investors for your continued support and confidence in our management team. Thank you.
  • End of Q&A:
    Thank you, Jason. And thank you everybody for joining us on this morning's call. Thank you all.
  • Operator:
    That does conclude today's teleconference. We thank you all for your participation.

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