VANCOUVER, May 9, 2019 /CNW/ - RYU Apparel Inc.
(TSX-V: RYU.V, OTCQB: RYPPF), creator of urban athletic
apparel, is pleased to report its financial results for its third
full year of operations since relaunching the brand in November 2015.
Revenue for the year ended December 31,
2018 was $5,047,600, 67%
higher than revenue of $3,019,586
during the year ended December 31,
2017. The RYU team is encouraged with its sales record to
date in addition to achieving a 47% gross profit for the year.
|
Three months ended
December 31,
|
Twelve months
ended December 31,
|
|
2018
|
2017
|
% Change
|
2018
|
2017
|
% Change
|
|
|
|
|
|
|
|
Revenue
|
$
|
1,773,589
|
$
|
1,166,126
|
52%
|
$
|
5,047,600
|
$
|
3,019,586
|
67%
|
Cost of
sales
|
1,113,864
|
636,654
|
75%
|
2,653,749
|
1,637,293
|
62%
|
Gross
profit
|
$
|
659,725
|
$
|
529,472
|
25%
|
$
|
2,393,851
|
$
|
1,382,293
|
73%
|
Gross profit
%
|
37%
|
45%
|
(8%)
|
47%
|
46%
|
1%
|
Fourth quarter 2018 results included additional revenue from the
Company's new retail locations in Williamsburg, Brooklyn in New York
City, and CF Sherway Gardens in Toronto, Ontario.
The fourth quarter of 2018 is RYU's thirteenth quarter of
increasing revenue and of increasing gross profit.
"We are delighted with this quarter and yearly results and the
constant progress we are making in our strategic plan," said
Marcello Leone, CEO. "Moving
forward, RYU remains focused and we have a solid execution plan in
place to position the brand for success. As creators of Urban
Athletic Apparel, we are growing day after day and we are thrilled
about our next steps."
During the year ended December 31,
2018 the Company achieved the following milestones:
- RYU met its retail store expansion target of eight retail
locations by the end of 2018 beginning with the opening of its
first US retail location on Abbot Kinney Boulevard in Venice, California on August 2, 2018. This was followed by its first
location in New York City, in
Williamsburg, Brooklyn, on November
15, 2018. The third new retail location for the year was CF
Sherway Gardens on December 14, 2018
as the second Toronto, Ontario
location and first enclosed mall location in the City.
- During the year ended December 31,
2018 E-Commerce revenue represented 14% of total revenue and
our efforts yielded a 42% growth in E-Commerce revenue against the
year ended December 31, 2017.
- The Company, in August 2018,
launched its first global marketing campaign, #YourUniverse, which
gained strong attention by the media and generated articles, social
media impressions and projected RYU on the radar of the most
important publications in North
America.
- The Company also continued to expand its revenues through
strategic partnerships with key wholesale accounts, that bring high
value proposition, such as Nordstrom, Equinox gyms, Rise by We
(WeWork) and Steve Nash Fitness Clubs.
- Commencing October
8th, 2018, RYU's common shares began trading on
the OTCQB Marketplace under the trading symbol OTCQB: RYPPF. We
provided this platform to our existing and prospective US
shareholders to align our corporate structure with our business
expansion in the US retail marketplace.
Fourth quarter summary:
- Fourth quarter revenue of $1,773,589 compared with $1,166,126 in the same period in fiscal 2017.
Revenue increased by 52% as it included sales from new retail
locations. The Company opened the quarter with six versus five
retail stores, while one more opened exactly at the middle of the
quarter and the eight overall location opened for just a couple of
weeks before the conclusion of the quarter. Growth in e-commerce
sales was constant.
- The fourth quarter of 2018 marks
RYU's thirteenth consecutive quarter of increasing gross profit.
Fourth quarter gross profit of $659,725 compared with $529,472 in the same period in fiscal 2016, an
increase of 25%.
- Fourth quarter expenses of $5,946,071 compared with $3,082,668 in the same period in fiscal 2017. The
increase of 93% is primarily due to the expansion of our retail
operations from five to nine stores (advancing the costs for the
ninth, opened in early January
2019).
- Fourth quarter comprehensive loss was $5,286,346 compared with $2,553,196 in the same period in fiscal 2017. The
$2,733,150 increase is due to higher
selling and marketing expenses, variances in gross profit net of
higher occupancy costs and depreciation from running eight retail
stores versus five as well as additional manpower needs.
Annual summary:
- Revenue of $5,047,600 compared
with $3,019,586 in fiscal 2017.
Revenue increased by 67% as it included sales from eight stores
(two of them open for respectively 6 and 2 weeks, only) versus five
retail stores and growth in e-commerce sales. The Abbot Kinney –
Venice location in Los Angeles opened August 2018, the Williamsburg location in New York opened November 2018, and the Sherway Gardens store in
Toronto opened December 2018.
- Gross profit of $2,393,851
compared with $1,382,293 in fiscal
2017, an increase of 73%. Gross profit percentage increased to 47%
in the year ended December 31, 2018
from 46% at the end of 2017, due to improving starting margins.
- Expenses of $21,720,528 compared
with $10,590,853 in fiscal 2017. The
increase is due to the increase in retail operations from five to
eight stores
(including the location which opened in early January 2019), investment in additional manpower,
and the development of our 2018 marketing strategy.
- Comprehensive loss was $19,326,677 compared with $9,200,856 in fiscal 2016. The increase in
comprehensive loss is due to investment in the scale of our
business. This increase quantified as $10,125,821 is mostly due to higher share-based
payments $2,293,227 (a non-cash
item), higher selling and marketing expenses of $2,373,017, and variances in gross profit net of
higher occupancy costs and depreciation from running eight retail
stores versus five as well as additional manpower needs. Without
the effect of non-cash items, comprehensive loss in the year ended
December 31, 2018 increased by 85%
(vs 103%) to $15,575,150, from
$8,414,207. The increase is due to
investment in the scale of our business.
The Company is also pleased to provide the following 2019
updates:
- RYU successfully opened its ninth retail location located at
Fashion Island in Newport Beach,
California on January 22,
2019.
- The new RYU.com, with improved functionality, user experience,
speed and branding launched on February 13,
2019, in collaboration with creative agency netamorphosis
from New York City.
- RYU currently has two retail locations under construction in
Southern California and both are
set to open in the summer of 2019. This continued expansion gives
RYU increasing exposure in Vancouver, Toronto, New York
City and Los Angeles as the
most important urban centers on both coasts of Canada and the US.
For convenience, copies of the Company's annual consolidated
statements of financial position, comprehensive loss and cash flows
for the years discussed herein are attached to this news
release. Readers are encouraged to review such statements in
their entirety, including the notes thereto, on SEDAR. Full
details of the Company's financial performance can be obtained by
viewing the annual consolidated financial statements and
corresponding MD&A available on SEDAR.
About RYU
Respect Your Universe is an award-winning urban athletic apparel
and accessories brand engineered for the fitness, performance and
lifestyle of the athletic man and woman. Designed without
compromise for fit, comfort, and durability, RYU exists to
facilitate human performance. For more information, visit:
http://ryu.com
On Behalf of the Board
RYU APPAREL INC.
"Marcello
Leone"
Marcello Leone,
CEO, President and Chairman of the Board
Tel: 604-235-2880
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release contains forward-looking information that
involve various risks and uncertainties regarding future events.
Such forward-looking information can include without limitation
statements based on current expectations involving a number of
risks and uncertainties and are not guarantees of future
performance of the Company, such as statements
that the store locations under construction have
target openings during the summer of
2019. There are numerous risks and uncertainties that
could cause actual results and the Company's plans and objectives
to differ materially from those expressed in the forward-looking
information, including the ability of the company to finance
operations, the ability of the management team to execute on its
business plan, risks in the apparel industry in general, and delays
and risks associated with renovating and opening new store
locations. Actual results and future events could differ materially
from those anticipated in such information. These and all
subsequent written and oral forward-looking information are based
on estimates and opinions of management on the dates they are made
and are expressly qualified in their entirety by this notice.
Except as required by law, the Company does not intend to update
these forward-looking statements.
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SOURCE RYU Apparel Inc.