By  on November 22, 2006

J. Crew is putting preppy back on point.

Bolstered by robust sales across its women's, men's and children's businesses, the J. Crew Group reported operating profits on Tuesday that soared 51 percent in the third quarter, as the retailer's bottom line swung to a profit from a loss. Based on the company's stellar performance, management raised its full-year earnings guidance after saying it was bullish on the outlook for holiday shopping.

"We remain confident as we enter the holiday season and expect continued strength from our third-quarter drivers, while layering on our important gift-giving and cold-weather assortment," Millard "Mickey" Drexler, chairman and chief executive officer, said during a call with Wall Street analysts.

For the three months ended Oct. 28, the company reported net income of $26 million, or 40 cents a diluted share, which compares with a loss of $336,000, or 1 cent, in the year-ago period. Adjusted earnings related to the company's tax rate were 27 cents a share. Results include $500,000 of stock option expense.

Sales at the preppy apparel retailer jumped 23 percent in the quarter to $275.6 million from $223.4 million last year. Total same-store sales increased 19 percent, and direct sales from the company's Web site and mail-order catalogue rose 18 percent to $66.3 million. Operating income increased 51 percent to $33.2 million, and there was a 210 basis-point improvement in operating margin compared with last year.

For the nine-month period, earnings were $27.7 million, or 62 cents a diluted share, which compares with a loss of $435,000, or 2 cents, in the prior year's period. Sales increased 15.4 percent to $785.4 million from $663.3 million.

J. Crew shares rose 2.6 percent to $36.26 in after-market trading on the New York Stock Exchange, after closing up 4 percent to $35.35 at the bell. Since its initial public offering earlier this year, the stock price has increased about 29 percent.

"We experienced across-the-board sales strength in our women's, men's and crewcut businesses, driven by our focus on offering what we call here ‘accessible luxury' through our extraordinary commitment for quality, design, style and customer service and everything we do across all of our businesses," Drexler said on the conference call.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus