DIFFERENTIAL BRANDS REPORTS STRONG RESULTS DUE TO HUDSON AND SWIMS ACQUISTIONS
Differential Brands Group Inc., a portfolio of global consumer brands comprised of Hudson Jeans, Robert Graham and Swims, has reported a strong fourth quarter and fiscal 2016.
Total company net sales for the fourth quarter increased 108 percent, reflecting a 179 percent increase in wholesale segment sales and a 34 percent increase in consumer direct segment sales. Sales increased for the period primarily due to the addition of the Hudson Jeans and Swims brands, as well as 3 percent growth in Robert Graham.
Gross profit was $21.8 million, compared to $12.1 million in the fourth quarter of fiscal 2015. Gross profit includes $9.7 million in gross profit from the Hudson and Swims acquisitions. Robert Graham gross profit was flat to the comparable period last year. Gross margin was 51.8 percent compared to 59.9 percent in the fourth quarter of 2015, reflecting the inclusion of Hudson Jeans, which carries a lower gross margin rate as a wholesale business.
Total company net sales for the fiscal 2016 were also improved with an increase of 104 percent, reflecting a 163 percent increase in wholesale segment sales and a 29 percent increase in consumer direct segment sales. Sales increased primarily due to the addition of the Hudson Jeans and Swims brands. Robert Graham sales declined 4 percent for the year.
Gross profit was $79.5 million in fiscal 2016, compared to $44.9 million in fiscal 2015. Gross profit includes $37.2 million in gross profit from the addition of the Hudson and Swims brands. Robert Graham gross profit was down 6 percent compared to the prior year. The annual decline for Robert Graham related to a decrease in product sales featured in the higher-fashion spring catalog and resultant markdowns. Gross margin was 53.3 percent compared to 61.5 percent in fiscal 2015, reflecting the inclusion of Hudson Jeans, which carries a lower gross margin as a wholesale business.
“We are pleased with the progress we are making on a number of initiatives designed to drive organic growth across our brands,” said Michael Buckley, chief executive officer of Differential Brands. “This includes enhancing product offerings and improving product sourcing across all brands, making strategic and swift investments in e-commerce, consolidating operations into a single platform enabling us to leverage talent and expenses, and building a world class leadership team. During the quarter, Robert Graham’s assortment shift to fashion basics was well received among customers. As a result, wholesale sell-through improved at both specialty and department stores and consumer direct customers embraced the product, evidenced by an e-commerce sales increase of 63 percent versus the same quarter last year. Looking ahead, we will continue to drive organic growth as we evolve and expand the product offering, work towards building out a retail and e-commerce presence and increase penetration in the wholesale channel.”
