Revenue: Overall revenue for the third quarter increased 10% compared to the prior year period, despite worsening logistics disruptions in October, including significant U.S. port delays, which resulted in a 4% negative impact from an unplanned shift in the timing of U.S. wholesale shipments from the third quarter into the fourth quarter.
Direct to Consumer: Total direct to consumer revenue was flat compared to the prior year period, inclusive of a 5% reduction from the exit of the Heritage Brands Retail business.
Digital commerce increased 21% as compared to the prior year period on top of exceptionally strong growth in 2020. The Company’s retail stores continued to face pressure as a result of the pandemic, with the majority of the Company’s stores in Australia temporarily closed for most of the current year’s third quarter.
Wholesale: Total wholesale revenue for the third quarter increased 17% compared to the prior year period despite the unplanned shift in the timing of U.S. wholesale shipments mentioned above and the impact of the Heritage Brands transaction.
The Company’s sales to the digital businesses of its traditional and pure play wholesale customers continued to exhibit double digit growth.
Gross Margin: Overall gross margin in the third quarter was 57.7% as compared to 52.0% in the prior year period, primarily due to more full price selling and a favorable shift in regional sales mix. These improvements more than offset higher freight costs, including an increase in air freight to mitigate anticipated supply chain and logistics delays.
Inventory: Overall inventory levels decreased 7% compared to the prior year period, primarily due to the Heritage Brands transaction and the exit from the Heritage Brands Retail business.
In transit inventory levels in the third quarter increased over 50% compared to the prior year period, primarily due to extended lead times from supply chain and logistics disruptions, including U.S. port delays, which drove the above mentioned shift in the timing of U.S. wholesale shipments from the third quarter into the fourth quarter. ■