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St. John Net Drops

NEW YORK — St. John Knits International Inc. posted a double-digit first-quarter sales rise, but net income fell under the weight of thinner wholesale margins.<br><br>For the 13 weeks ended Feb. 2, the Irvine, Calif.-based better sportswear...

NEW YORK — St. John Knits International Inc. posted a double-digit first-quarter sales rise, but net income fell under the weight of thinner wholesale margins.

This story first appeared in the March 18, 2003 issue of WWD.  Subscribe Today.

For the 13 weeks ended Feb. 2, the Irvine, Calif.-based better sportswear marketer reported net income of $5 million, 14.7 percent below the prior-year level of $5.9 million. Because the company paid $1.3 million in preferred stock dividends in the year-ago quarter and none in the most recent period, income allocated to common stockholders rose 9.5 million, from $4.6 million.

Net sales rose 11.7 percent to $98.3 million from $88 million as wholesale revenues gained 9 percent, to $79.7 million from $73.1 million, and retail sales were up 10.9 percent, to $41 million from $36.9 million. (Sales between segments are deducted from the sum of the two units’ volumes.) Operating income rose 1.8 percent at wholesale, to $16.1 million from $15.9 million, and nearly doubled at retail, rising 99.7 percent, to $2.7 million from $1.4 million.

The company, in a Form 10-Q filing with the Securities and Exchange Commission, said sales increased due to new stores, increased sales at outlet stores and increased sales to domestic and international wholesale customers. Same-store sales were flat, but the closure of St. John Home stores translated into an $800,000 top-line reduction.

Increased unit sales of the knit product line were the outstanding performer in the wholesale area, but gross profit declined to 55.6 percent of sales from 56.2 percent in the year-ago quarter, principally because of a decrease in gross margin in the knit line.

Although now privately held, some of St. John’s stock remains in public hands and it continues to report its financial results.