Overall gross margins for the first quarter decreased to 17 percent versus 21 percent last year due to a write down of branded apparel inventory and the planned shift of certain clearance activity. SG&A expenses as a percentage of sales in the first quarter increased to 30.4 percent compared to 20.3 percent in the prior year period.
The Company experienced higher wages as a result of severance benefits paid to the Company's former chief executive officer, additional hires to support the Joe's design and sales staff, additional hires for the Company's finance and administration staff for internal control support, and pre-production personnel additions. The Company also incurred increased advertising expenditures for its Joe's branded products, as well as increased sample costs, facility expenses and stock based compensation expense due to the adoption of new stock based compensation rules.
The Company will host a conference call to discuss its first quarter fiscal 2006 results today, April 6, 2006 beginning at 4:30 pm ET.
The following tables should be read in conjunction with the Quarterly Report on Form 10-Q for the period ended February 25, 2006, to be filed with the Securities and Exchange Commission on April 6, 2006.
Innovo Group Inc, through its operating subsidiaries Innovo Azteca Apparel Inc and Joe's Jeans Inc is a sales and marketing organization designing and selling apparel products to the retail and premium markets.
marketing@alchempro.com
