Shares 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.
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.