Ever-Glory International Group, Inc.
Q2 2015 Earnings Call Transcript

Published: 12 Aug 2015

[Operator:]

Good day and welcome to the Ever-Glory International Group Second Quarter 2015 Earnings Conference. 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. Good morning and welcome to Ever-Glory International second quarter 2015 earnings conference call. Before we start, we would like to take a moment to go through the Company's Safe Harbor policy. 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 a forward-looking statement 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, Wilson. Good morning everyone. Welcome to Ever-Glory's second quarter 2015 earnings conference call. I would like to use this time to highlight the key points in the second quarter of 2015. Total sales for the quarter were 75.7 million, a decrease of 11.6% compared to 85.7 million in the second quarter of last year. This decrease was mainly due to a 6.8% decreased sales in retail business as well as an 18.1% decreased sales in wholesale business. For the second quarter of 2015, retail sales from the Company's branded fashion apparel retail division, decreased 6.8% to 45.9 million compared to 49.3 million last year. This decrease was mainly due to the decrease in same-store sales. Ever-Glory had 1,204 retail stores as of June 30, 2015, compared to 1,055 retail stores at June 30, 2014. For the second quarter of 2015, wholesale sales decreased 18.1% to 29.8 million, compared to 36.4 million last year. This decrease was mainly due to decreased sales in Republic of China, Germany, the United Kingdom and the United States. Total gross profit for the quarter increased 2.4% to 30 million, compared to 29.3 million last year. Total gross margin increased 540 basis points to 39.7% compared to 34.3% last year. Gross profit for retail business increased 14.4% to 23.8 million, compared to 20.8 million last year. Gross margin increased 960 basis points to 51.8% compared to 42.2% last year. Gross profit for wholesale business decreased 26.9% to 6.2 million, compared to 8.5 million last year. Gross margin decreased 250 basis points to 21.0% compared to 23.5% last year. Selling expenses for the quarter increased 22.1% to 17.6 million compared to 14.4 million last year. As a percentage of sales, selling expenses increased 640 basis points to 23.2% compared to 16.8% last year. General and administrative expenses for the quarter increased 0.9% to 7.6 million compared to 7.5 million last year. As a percentage of total sales, general and administrative expenses increased 120 basis points to 10.0% compared to 8.8% last year. Income from operations for the quarter decreased 34.4% to 4.9 million compared to 7.4 million last year. As a percentage of sales, income from operations decreased 220 basis points to 6.4% compared to 8.6% last year. Net income for the quarter decreased 36.4% to 3.5 million compared to 5.5 million last year. Basic and diluted earnings per share were $0.24 and $0.37 for the three months ended June 30, 2015 and 2014, respectively. Finally I want to express my thanks to our investors for thier continuing support and confidence in our management team. Thank you.

[Wilson Bow:]

Thank you, Jason and thank you everybody for joining us on this morning's call. Thank you, operator.

[Operator:]

Thank you. That will conclude today's conference. We thank everyone for their participation. [No Formal Q&A for this event].