Ever-Glory (EVK) Reports Q1 Loss of $0.04 on Revenues of $88M

Ever-Glory (NASDAQ: EVK) reported Q1 EPS of ($0.04), versus $0.06 reported last year. Revenue for the quarter came in at $88 million, versus $92.8 million reported last year.

First Quarter 2019 Financial Results

• Total sales for the first quarter of 2019 were $88.0 million, a decrease of 5.2% from $92.8 million in the first quarter of 2018. This decrease was primarily driven by an 11.4% decrease in our retail business, partially offset by an 11.3% increase in wholesale business.
• Sales for the Company's branded fashion apparel retail division decreased by 11.4% to $59.9 million for the first quarter of 2019, compared with $67.5 million for the first quarter of 2018. This decrease was primarily due to a decrease in same-store sales. The Company had 1,315 retail stores as of March 31, 2019, compared with 1,409 retail stores as of March 31, 2018.
• Sales for the Company's wholesale division increased by 11.3% to $28.1 million for the first quarter of 2019, compared with $25.3 million for the first quarter of 2018. This increase was primarily attributable to increased sales in Mainland China, other European markets and Japan partially offset for decreased sales in Hong Kong, the United States, the United Kingdom and Germany.
• Total gross profit for the first quarter of 2019 decreased by 6.3% to $29.4 million, compared with $31.3 million for the first quarter of 2018. Total gross margin decreased to 33.4% from 33.8% for the first quarter of 2018.
• Gross profit for the retail business decreased by 10.7% to $22.8 million for the first quarter of 2019, compared with $25.5 million for the first quarter of 2018. Gross margin was 38.1%, compared to 37.8% for the first quarter of 2018.
• Gross profit for the wholesale business increased by 13.0% to $6.6 million for the first quarter of 2019, compared with $5.8 million for the first quarter of 2018. Gross margin increased to 23.3% from 23.0% for the first quarter of 2018.
• Selling expenses for the first quarter of 2019 decreased by 5.5% to $21.0 million, or 23.9% of total sales, compared with $22.2 million, or 24.0% of total sales for the first quarter of 2018. The decrease was attributable to the decreased sales.
• General and administrative expenses for the first quarter of 2019 decreased by 1.9% to $7.5 million, or 8.6% of total sales, compared with $7.7 million, or 8.3% of total sales for the first quarter of 2018. The decrease was mainly attributable to the decreased office expenses.
• Income from operations for the first quarter of 2019 decreased by 43.2% to $0.8 million compared with $1.4 million for the first quarter of 2018.
• Net income(loss) attributable to the Company for the first quarter of 2019 was ($0.5) million compared with $0.8 million for the first quarter of 2018. Basic and diluted earnings(loss) per share were ($0.04) for the first quarter of 2019 compared with basic and diluted earnings per share of $0.06 for the first quarter of 2018.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, "During the first quarter, we maintained our focus on developing the retail business through our multi-brand strategy and store network optimization initiative, while improving our wholesale business by upgrading customer portfolio and enhancing our account receivables. Notably, we achieved year-over-year improvement in gross profit of 13.0% for our wholesale business."

"During the first quarter of 2019, we remained our focus on driving retail business through store network optimization strategy, as well as inventory management strategy," Mr. Kang continued. "Following the remodeling or relocation of 7 stores during 2019, we operated a nationwide network of 1,315 stores as of December 31, 2019."

"Looking at our wholesale business, we maintained focus on upgrading customer portfolio to reduce credit risk and improve margin in the light of weak micro environment and enhancing our account receivables. Going forward, we'll implement a stricter client evaluation system and remain diligent in account receivables collection. We believe the enduring strength of our wholesale business will support its long-term profitability." concluded Mr. Kang.

Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, "The first quarter results, coupled with our ability to increase operating leverage, resulted in expanded wholesale operating income during this quarter. Going forward, we remain confident in the long-term prospects of our business and we will continue implementing our margin enhancement and cost control measures to further strengthen the profitability of our business."

For earnings history and earnings-related data on Ever-Glory (EVK) click here.

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