Joe’s Jeans to Buy High-End Rival Hudson, Shares Plunge

The company plans to move some production to Mexico

   

Joe’s Jeans to Buy High-End Rival Hudson, Shares Plunge

pile of jeans 630 300x227 Joe's Jeans to Buy High End Rival Hudson, Shares PlungeShares of Joe’s Jeans (JOEZ) tumbled more than 24% in Tuesday morning trading after the company posted quarterly earnings that fell shy of analysts’ forecasts and announced an acquisition.

The company said it would pay $97.6 million in cash to purchase Hudson Clothing, a privately-held jeans-maker. The acquisition will increase Joe’s Jeans’ business almost two-fold, the Associated Press noted.

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However, the company announced that second-quarter earnings dropped 17% compared to last year, falling to $1.2 million. EPS came in at 2 cents, missing the 3 cents a share that Wall Street had been looking for.

While revenue increased to $30.9 million, up 8% from last year, that also disappointed analysts, who had expected revenue of $32 million for the quarter.

Joe’s Jeans indicated that its earnings had been dented by higher U.S. manufacturing costs and would move some production to Mexico to trim expenses.


Article printed from InvestorPlace Media, http://investorplace.com/2013/07/joes-jeans-to-buy-high-end-rival-hudson-shares-plunge/.

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