NEW YORK — Despite one-time charges that hurt the bottom line, The Jones Group Inc. had a good third quarter as conservative inventory planning and operating margin improvement boosted results.
Net income for the period attributable to Jones shareholders for the three months ended Sept. 29 dropped 57.6 percent to $17.4 million, or 22 cents a diluted share, from $41 million, or 49 cents, a year ago. Excluding one-time charges and other adjustments related to foreign currencies, the company said adjusted per-share profits were 57 cents versus 48 cents last year. That bested Wall Street’s adjusted expectations by 25 cents.
Revenues were essentially flat, down 0.8 percent to $1.03 billion from $1.04 billion, which included a 0.5 percent dip in net sales to $1.02 billion from $1.03 billion.
By business segment, the best-performing category in the quarter was domestic wholesale footwear and accessories, which climbed 9.7 percent to $289.9 million. Domestic wholesale jeanswear was second, at an 8.1 percent gain to $202.3 million.
In contrast, domestic wholesale sportswear was the worst-performing category, with sales dropping 14.4 percent to $208.7 million, due in part to a planned reduction in shipments of Jones New York product and the change in the retail strategy at J.C. Penney. International wholesale sales fell 5.3 percent to $94.3 million.
For the retail businesses, the domestic retail segment — which includes Jones’ U.S. ready-to-wear outlets and its e-commerce sites — declined 6.7 percent to $140 million, offset by a 5.2 percent uptick to $89.7 million for the international retail operation. There were 100 fewer Jones U.S. stores in operation in the current quarter compared with last year.
In a conference call to Wall Street analysts, Wesley R. Card, chief executive officer, said, “I’m very pleased to note that our operating margin improved to 7.1 percent this quarter, which exceeds the 6.7 percent we recorded last year in 2011....Our approach to planning in the current economic and political environment is paying dividends. And we continue to plan conservatively as we proceed through 2012 into 2013.”
In a telephone interview, Card said the company’s jeanswear has been a “phenomenal business.” He attributed the performance to the design team for being ahead of the competition with product offerings, from both a color and fabrication standpoint.
Jeanswear for holiday has included more patterns and prints on colors. For spring, Card expects color to remain a dominant theme and that animal prints on colored denim will likely be strong sellers, as well as anything printed that is viewed as different.
About 21 percent of the firm’s business is international, and growing. According to Card, that’s also the segment that has held up well, particularly in Western Europe, despite what has been a difficult retail backdrop. The company’s business in Asia is still relatively small compared with that in Europe.
Stuart Weitzman was a top performer in the quarter with strong worldwide sales and good international comps, said Card. Its other top footwear and accessories performer is Kurt Geiger, which is London-centric and geographically where Card noted that the luxury consumer has started to spend again.
In Asia, Card noted that in the better zone, brands such as Nine West have continued to see some slowdown in sales, but emphasized that “business is still good.”
Card said the predictions for holiday indicate an expectation that it will be a “robust Christmas season.” The ceo noted the consumer has been resilient so far this year, adding that Thanksgiving will be early and the extra week will be a boost to holiday shopping.
Richard Dickson, president and chief executive officer of branded business at Jones, said, the company has more gift-giving programs for holiday this year, coordinating with destination products and key items that are part of the specific initiatives for each brand under the Jones portfolio.
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews