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

by Christopher Freeburn | July 16, 2013 9:47 am

pile of jeans 630 300x227 Joe's Jeans to Buy High End Rival Hudson, Shares Plunge[1]Shares of Joe’s Jeans (JOEZ[2]) tumbled more than 24% in Tuesday morning trading after the company posted quarterly earnings that fell shy of analysts’ forecasts and announced an acquisition[3].

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.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/02/pile-of-jeans-630.jpg
  2. JOEZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=JOEZ
  3. fell shy of analysts’ forecasts and announced an acquisition: http://www.businessweek.com/ap/2013-07-15/joes-jeans-2q-net-slips-company-to-buy-hudson

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