Joe’s Jeans Inc. Earnings Call Nuggets: Private Label Progress and Women’s Wholesale Business

On Thursday, Joe’s Jeans Inc. (NASDAQ:JOEZ) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.

Private Label Progress

Andrew Kim – Goldman Sachs: Hi. This is (Andrew Kim) sitting in for Ed. Congratulations on the quarter. Could you talk about the progress of your private label test at Macy’s and also what have you learned and how that affects your playing going forward?

Marc B. Crossman – President and CEO: Yes I mean the progress we couldn’t ask for better. It got rolled out to all the stores the vast majority of the mannequins, cables, and signage were up. I was on a East Coast, every mall we went into or every Macy’s where we’re supposed to be we saw our presentation as represented. So, we’re really excited with how it looks. In terms of performance it has just performed and just putting some color around it and beating plan by 20% to 30% on a weekly basis knock on wood. So, as we’re looking at the fall orders coming in and what we’re doing, we’re definitely looking to not only increase the number of doors we’re going to be in dramatically, but also increase the presentation that we have in the existing stores because our worry now is that we’re going to be short on inventory in the back half for the year. So it really is – we’re off both on our side and Macy side with the performance. In terms of what we’ve learned, I think, that we’re seeing that the fashion stuff just like with our core Joe’s business the fashion is turning really quickly and the basics aren’t turning to the same level. Now to put this is context, it’s all turning very well, but in terms of which is turning better, the fashion is doing quite well. So, when you look at our stock to sales it’s definitely skewed towards the fashion items, fashion and colors et cetera.

Andrew Kim – Goldman Sachs: Can you shed some more light on your reorders for fall and spring have there been any other changes in the cadence for new orders and reorder?

Marc B. Crossman – President and CEO: Has there been any — pardon what did you say?

Andrew Kim – Goldman Sachs: Changes in the cadence for new orders and reorders?

Marc B. Crossman – President and CEO: I mean there we’re looking at doubling the doors and tripling the orders just to give you kind of rough sense of the magnitude of change. Now summer is already bought locked in and on its way coming in. So, we’re not going to increase the doors of the presentations than the existing doors because we’re just already locked in. We don’t have our final buys for fall, but obviously we’re in constant communication with them and we are obviously going to make a big step forward going into the fall season.

Women’s Wholesale Business

Steven Chang – Rudgear Capital: Have a question, in your women’s wholesale business, I know you had mentioned that door count had gone down for a little bit and could you talk about where you are in the process of getting back into some doors that you had lost?

Marc B. Crossman – President and CEO: Right now it’s not – I’d love to tell you that we’re bringing up our door counts, it’s stabilized from where it was in the fourth quarter, pretty much, give or take a couple of doors based on the department store. So, really it’s about acting as quickly or reacting as quickly as we possibly can. The subset is turning in the existing doors, getting to a point where stock to sales ratios are out of whack to the positive. They were way outperforming our stock and really beefing up the doors we’re in and then eventually moving to increasing our door count. So, I know that’s a long-winded answer. The simple answer is still the same number of doors, we’re just performing better in the existing doors with the product that we have today.

Andrew Kim – Goldman Sachs: Hi. This is (Andrew Kim) sitting in for Ed. Congratulations on the quarter. Could you talk about the progress of your private label test at Macy’s and also what have you learned and how that affects your playing going forward?

Marc B. Crossman – President and CEO: Yes I mean the progress we couldn’t ask for better. It got rolled out to all the stores the vast majority of the mannequins, cables, and signage were up. I was on a East Coast, every mall we went into or every Macy’s where we’re supposed to be we saw our presentation as represented. So, we’re really excited with how it looks. In terms of performance it has just performed (NYSE:BIG) and just putting some color around it and beating plan by 20% to 30% on a weekly basis knock on wood. So, as we’re looking at the fall orders coming in and what we’re doing, we’re definitely looking to not only increase the number of doors we’re going to be in dramatically, but also increase the presentation that we have in the existing stores because our worry now is that we’re going to be short on inventory in the back half for the year. So it really is – we’re off both on our side and Macy side with the performance. In terms of what we’ve learned, I think, that we’re seeing that the fashion stuff just like with our core Joe’s business the fashion is turning really quickly and the basics aren’t turning to the same level. Now to put this is context, it’s all turning very well, but in terms of which is turning better, the fashion is doing quite well. So, when you look at our stock to sales it’s definitely skewed towards the fashion items, fashion and colors et cetera.

Andrew Kim – Goldman Sachs: Can you shed some more light on your reorders for fall and spring have there been any other changes in the cadence for new orders and reorder?

Marc B. Crossman – President and CEO: Has there been any — pardon what did you say?

Andrew Kim – Goldman Sachs: Changes in the cadence for new orders and reorders?

Marc B. Crossman – President and CEO: I mean there we’re looking at doubling the doors and tripling the orders just to give you kind of rough sense of the magnitude of change. Now summer is already bought locked in and on its way coming in. So, we’re not going to increase the doors of the presentations than the existing doors because we’re just already locked in. We don’t have our final buys for fall, but obviously we’re in constant communication with them and we are obviously going to make a big step forward going into the fall season.