May 16, 2017
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Hudson Jeans online growth leads Differential Brands Q1 2017 results

May 16, 2017

Differential Brands, which includes Hudson Jeans, Robert Graham and Swims, announced its positive Q1 2017 financial results with net sales increasing 19% in part due to developing the Hudson Jeans e-commerce site.

Hudson Jeans

As net sales increased to $40.1 million, the largest source of growth came from e-commerce sales which nearly doubled at 46% growth over last year. The total consumer direct segment showed growth of 9%.

CEO Michael Buckley said the e-commerce growth "was due to strategic investments in digital marketing platforms to improve customer acquisition as well as the March launch of our new Hudson Jeans website."

Hudson Jeans still led sales both online and at wholesale, although Buckley noted that the quarter included a non-comparable month of Hudson Jeans and a full quarter of Swims sales compared to Q1 last year. The company reports Hudson Jeans sales are up 19% over last year's quarter in specialty retail channels. That wholesale business growth helped offset the damage from the department store retail apocalypse or what Buckley called a "difficult macro selling environment."

Gross profit also increased as changes were made to a sourcing process that impacts production costs that were allocated to inventory.

Buckley also noted that Differential Brands is making infrastructure changes that it expects will be complete in the next year to year and a half. The changes include consolidation of warehouses and operating platforms. Once made, the changes should reduce material expenses and drive gross margins.

Buckley said of the future focus, "We will build on our efforts to capitalize on the consumer shift to the online channel through increased investments designed to expand consumer reach within our consumer direct segment."

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