Ever-Glory International Group Inc., a China-based retailer of branded fashion apparel and a global apparel supply chain solution provider, reported sales for the second quarter ended June 30 of $88.5 million, an increase of 11 percent from $79.8 million in the second quarter of 2017. This increase was primarily driven by a 17.6 percent increase in wholesale business and a 6.3 percent increase in retail business.
“During the second quarter, we maintained our focus on developing retail business through our multi-brand strategy and store network optimization initiative, while improving our wholesale business by upgrading customer portfolio,” said Yihua Kang, chairman, president and CEO of Ever-Glory. “Notably, we achieved year-over-year improvement in gross margins for both of our retail and wholesale businesses, as well as a year-over-year revenue increase of 17.6 percent for our wholesale business.”
“During the second quarter of 2018, we remained our focus on driving retail business through store network optimization strategy, as well as inventory management strategy,” Kang said. “Following the remodeling or relocation of 69 stores during the second quarter, we operated a nationwide network of 1,417 stores as of June 30, 2018.”
“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. Our wholesale gross margin continued to improve on a year-over-year basis. 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.
Sales for the company’s branded fashion apparel retail division increased by 6.3 percent to $49.7 million for the second quarter of 2018, compared with $46.8 million for the second quarter of 2017. This increase was primarily due to an increase in same-store sales. The company had 1,417 retail stores as of June 30, 2018, compared with 1,362 retail stores as of June 30, 2017.
Sales for the company’s wholesale division increased by 17.6 percent to $38.8 million for the second quarter of 2018, compared with $33.0 million for the second quarter of 2017. This increase was primarily attributable to an increase in sales in Mainland China, United Kingdom, United States and Japan, partially offset by a decrease in sales in Hong Kong, Germany and Europe other areas.
Total gross profit for the second quarter of 2018 increased by 12.7 percent to $34.5 million, compared with $30.7 million for the second quarter of 2017. Total gross margin increased to 39.0 percent from 38.4 percent for the second quarter of 2017.
Gross profit for the retail business increased by 10.6 percent to $27.4 million for the second quarter of 2018, compared with $24.8 million for the second quarter of 2017. Gross margin was 55.1 percent, compared to 52.9 percent for the second quarter of 2017.
Gross profit for the wholesale business increased by 21.3 percent to $7.2 million for the second quarter of 2018, compared with $5.9 million for the second quarter of 2017. Gross margin increased to 18.4 percent from 17.9 percent for the second quarter of 2017.
Selling expenses for the second quarter of 2018 increased by 11.7 percent to $22.6 million, or 25.5 percent of total sales, compared with $20.2 million, or 25.3 percent of total sales, for the second quarter of 2017. The increase was attributable to the increased store decoration and marketing expenses.
General and administrative expenses for the second quarter of 2018 increased by 18.0 percent to $8.8 million, or 10.0 percent of total sales, compared with $7.5 million, or 9.4 percent of total sales, for the second quarter of 2017. The increase was mainly attributable to the increased average salaries.
Income from operations for the second quarter of 2018 increased by 6.1 percent to $3.1 million compared with $2.9 million for the second quarter of 2017.
Net income attributable to the company for the second quarter of 2018 was $2.8 million compared with 2.7 million for the second quarter of 2017. Basic and diluted earnings per share were $0.19 for the second quarter of 2018 compared with basic and diluted earnings per share of $0.18 for the second quarter of 2017.
As of June 30, Ever-Glory had approximately $36.4 million of cash and cash equivalents compared with approximately $62.9 million as of December 31, 2017. Ever-Glory had working capital of approximately $65.7 million as of June 30, 2018 and outstanding bank loans of approximately $34.8 million as of June 30, 2018.
Based in Nanjing, China, Ever-Glory International Group Inc. is a retailer of branded fashion apparel and a leading global apparel supply chain solution provider. Ever-Glory offers apparel to woman in China under its own brands La go go, Velwin, Sea To Sky and Idole.
