Joe's Jeans Reports 2008 Second Quarter Results

Joe's Jeans Reports 2008 Second Quarter Results

Joe's Jeans Inc. (the "Company") (NASDAQ: JOEZ) today announcedfinancial results for the second quarter ended May 31, 2008.Highlights were:

Marc Crossman, President and Chief Executive Officer, commented,"We are very pleased to be reporting $18.0 million in sales andrecord net income of $2.0 million during the quarter. These resultsreflect continued sales growth and gross margin improvement drivenby improved performance across all of our business segments,including women's, men's, international and kid's, and from oursourcing capabilities. Additionally, we announced the signing ofour first full-price retail store during the quarter to be locatedin the Bucktown neighborhood in Chicago with a planned opening inOctober. We are extremely excited about the progress we made thisquarter across all aspects of our business and we look forward tocapitalizing on the opportunities we see for continued growthduring the remainder of 2008 and into 2009."

For the second quarter ended May 31, 2008, net sales improved to$18.0 million from $15.2 million in the second quarter ended May26, 2007, an 18% increase. Gross margins during the second quarterof 2008 were 47%. SG&A during the second quarter ended May 31,2008 was $6.0 million compared to $6.6 million in the secondquarter of 2007, a 9% decrease primarily due to a one-time non-cashcharge of $1.5 million taken in the second quarter of 2007 inconnection with the Company's dissolution of its formerinternational distribution agreement. Excluding this one-timecharge, SG&A during the second quarter of 2008 increased 18%over the second quarter of 2007, primarily due to: higher headcountto support the Company's continued growth and its retailinitiatives; increased distribution and shipment costs as a resultof higher sales volume over the prior year period; increased samplecosts in connection with the development of a full collection; and,an increase in stock-based compensation expense relating to theissuance of restricted common stock and restricted stock unitsissued during the fourth quarter of 2007 and the first quarter of2008. The Company generated net income of $2.0 million, or $0.03per share, during the second quarter of 2008 compared to net incomeof $422,000, or $0.01 per share, during the second quarter of 2007.

The Company will host a conference call to discuss its 2008 secondquarter results today, July 15, 2008, beginning at 4:30 pm ET. Toaccess the live call, please dial (800) 901-5231 (U.S.) or (617)786-2961 (International). The conference ID number and participantpasscode is 62603181 and is entitled the "Q2 2008 Joe's Jeans Inc.Earnings Conference Call." The information provided on theteleconference is only accurate at the time of the conference call,and the Company will take no responsibility for providing updatedinformation. A telephone replay of the conference call will beavailable beginning at 6:30 PM Eastern Time today until 11:59 PMEastern Time on July 29, 2008 by dialing (888) 286-8010 (U.S) or(617) 801-6888 (international) and using the conference passcode32415799. In addition, the conference call will be archived for twoweeks on the Company's website at www.joesjeans.com .

About Joe's Jeans Inc.

Joe's Jeans Inc. designs, produces and sells apparel andapparel-related products to the retail and premium markets underthe Joe's? brand and related trademarks. More information isavailable at the company website at www.joesjeans.com .

Statements in this news release which are not purely historicalfacts are forward-looking statements, including statementscontaining the words "intend," "believe," "estimate, "project,""expect" or similar expressions. Forward-looking statements in thispress release include, without limitation, our ability to capturemarket share in the premium denim category, both domestically andinternationally, our ability to achieve long-term profitability,our expectations for our Joe's Jeans? brand in themarketplace, including our ability to transition to a lifestylebrand, our belief in our growth strategy, and our ability toimplement our retail strategy. These statements are made pursuantto the safe harbor provisions of Section 21E of the SecuritiesExchange Act of 1934, as amended. All forward-looking statementsare based upon information available to Joe's Jeans Inc. on thedate of this release. Any forward-looking statement inherentlyinvolves risks and uncertainties that could cause actual results todiffer materially from the forward-looking statements. Factors thatwould cause or contribute to such differences include, but are notlimited to: uncertainty regarding the effect or outcome of theCompany's expectations in the domestic and internationalmarketplaces; continued acceptance of the Company's products in themarketplace, particularly acceptance and near-term sales of theJoe's? brand; successful implementation of the Company'sretail strategy; the ability of the Company to continue to improveits gross margins; the ability to obtain new financing from otherfinancing sources; the ability to generate positive cash flow fromoperations; competitive factors, including the possibility of majorcustomers sourcing product overseas in competition with ourproducts; dependence upon third-party vendors; a possibleoversupply of denim in the marketplace; and other risks detailed inthe Company's periodic report filings with the Securities andExchange Commission. By making these forward-looking statements,the Company undertakes no obligation to update these statements forrevisions or changes after the date of this release. Readers arecautioned not to place undue reliance on forward-lookingstatements.