Differential Brands reports losses in Q4 and fiscal 2016
Differential Brands Group released on Thursday its fourth quarter and full year financial results, which includes an increase in net sales and a net loss for both periods.
Michael Buckley, Chief Executive Officer, commented, “We are pleased with the progress we are making on a number of initiatives designed to drive organic growth across our 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.”
Robert Graham’s shift to fashion basics was well received in the fourth quarter in both wholesale and retail. Hudson Jeans achieved comparable sales growth due to improved product quality and fit, and Differential completed the integration of Swims in the fourth quarter.
“Looking ahead, we will continue to drive organic growth as we evolve and expand the product offering, work towards building out a retail and ecommerce presence and increase penetration in the wholesale channel,” Buckley added.
Fourth quarter net sales increased 108% to $42.0 million, reflecting a 179% increase in wholesale segment sales and a 34% in consumer segment sales. Gross profit increased to $21.8 million from $12.1 million, and adjusted EBITDA was $2.1 million.
Net sales for the year increased 104%, driven by a 163% increase in wholesale sales and a 29% increase in consumer direct sales, gross profit was $79.5 million, including gross $37.2 million in gross profit from Hudson Jeans and Swims, and adjusted EBITDA was $8.7 million.
Differential incurred a net loss of $4.9 million, or $0.37 per share, in the fourth quarter and a net loss of $16.5 million, or $1.33 per share, in the fiscal year. The company reported a net income of $0.7 million and $0.8 million in the fourth quarter and full year of 2015, respectively. The loss for fiscal 2016 was primarily due to one-time expenses related to the acquisitions and merger of Hudson Jeans and Swims.
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