RYU Apparel Reports 52% Increase in 2018 4th Quarter Revenue and 67% Increase in 2018 Full Year Revenue

VANCOUVER, May 9, 2019 /PRNewswire/ - 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.

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 8^th, 2018, RYU's common shares began trading on the OTCQB Marketplace under the trading symbolOTCQB: 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.

SOURCE RYU Apparel Inc.

Related Links

www.ryu.com