Joe’s Jeans Inc. said Tuesday that it will restate its first three financial quarters from last year and delay filing its annual report so it can revise the accounting treatment of its 2007 acquisition of JD Holdings Inc. The revisions will lower the company’s earnings for those quarters.

The Commerce designer-denim maker, formerly a private label apparel maker known as Innovo Group, purchased rights to the Joe’s Jeans brand from founder Joseph Dahan in October 2007 for 14 million shares of its common stock.

The company said that when reviewing the financial statements, Securities and Exchange Commission staff made several comments about the accounting. Among the suggestions was that contingent payments promised to Dahan for 120 months following the sale should be considered a compensation expense rather than an adjustment to the purchase price. Dahan currently has the title of creative director at Joe’s Jeans.

The company previously reported earnings per share of 9 cents for the nine month period ended August 31, 2008 and has now lowered that to 6 cents due to the restatement.

For the fourth quarter of fiscal 2008, the company now expects to report earnings per share before charges of 2 cents, with net sales of $17.8 million. For the first quarter of fiscal 2009, the company expects pre-charge earnings per share of 1 cent. Net sales should be between $16 million and $16.5 million, which represent growth of 5 percent to 8 percent.

Before the announcement, Joes Jeans shares closed up 2 cents, or 9 percent, to 29 cents on the Nasdaq.