Ever-Glory International Group, Inc.
Q3 2015 Earnings Call Transcript

Published: 13 Nov 2015

[Operator:]

Good day and welcome to the Ever-Glory International Group’s Third 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:]

Good morning and welcome to Ever-Glory International third quarter 2015 earnings conference call. Before we begin, 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 uncertainty, all of which are described in the Company's filings with the SEC. Ever-Glory does not undertake any obligation to update 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.

[Jiansong Wang:]

Thank you, Wilson. Good morning everyone. Welcome to Ever-Glory's third quarter 2015 earnings conference call. I would like to use this time to highlight the key points in the third quarter of 2015. Total sales for the quarter were $118.6 million, a decrease of 15.3% compared to $139.9 million in the third quarter of last year. This decrease was mainly due to 21.1% decreased sales in our retail business and 10.9% decrease of sales in our wholesale business. For the third quarter of 2015, retail sales from the Company's branded fashion apparel retail division, decreased 21.1% to $47.3 million compared to $59.9 million last year. This decrease was mainly due to the decrease in same-store sales. We had 1,188 retail stores as of September 30, 2015, compared to 1,137 retail stores at September 30, 2014. For the third quarter of 2015, wholesale sales decreased 10.9% to $71.3 million, compared to $80.1 million last year. This decrease was mainly due to decreased sales in People's Republic of China, Germany, other European countries and Japan. Total gross profit for the quarter decreased 4.4% to $32.3 million, compared to $33.8 million last year. Total gross margin increased 310 basis points to 27.3% compared to 24.2% last year. Gross profit for retail business increased 3.6% to $22.4 million, compared to $21.7 million last year. Gross margin increased 1,130 basis points to 47.5% compared to 36.2% last year. Gross profit for wholesale business decreased 18.6% to $9.9 million, compared to $11.2 million last year. Gross margin decreased 130 basis points to 13.9% compared to 15.2% last year. Selling expenses for the quarter increased 7.8% to $19.2 million compared to $17.8 million last year. As a percentage of sales, selling expenses increased 350 basis points to 15.2% compared to 12.7% last year. General and administrative expenses for the quarter decreased 3.8% to $9.3 million compared to $9.7 million last year. As a percentage of total sales, general and administrative expenses increased 100 basis points to 7.9% compared to 6.9% last year. Income from operations for the quarter decreased 39.8% to $3.8 million compared to $6.3 million last year. As a percentage of sales, income from operations decreased 130 basis points to 3.2% compared to 4.5% last year. Net income for the quarter decreased 47% to $2.7 million compared to $5.1 million last year. Basic and diluted earnings per share were $0.19 and $0.35 for the three months ended September 30, 2015 and 2014, respectively. Finally I want to express my thanks to our investors for your continuing support and confidence in our management. Thank you.

[Wilson Bow:]

Thank you, Jason and thank you everybody for joining us on this morning's call. Thank you and I think we would have this conference concluding, today. Thank you.

[Operator:]

This concludes today's call. Thank you for your participation.

[Wilson Bow:]

Thank you, good bye.