The Jones Group Inc.’s third-quarter profits rose 42.4 percent, boosted in part by its $350 million acquisition of U.K. footwear brand Kurt Geiger in June.
For the three months ended Oct. 1, income attributable to Jones was $41 million, or 49 cents a diluted share, versus $29.1 million, or 34 cents, a year ago. After adjusting for restructuring charges and other items, earnings per share slipped to 48 cents from 54 cents. That’s still 3 cents ahead of Wall Street’s expectations of 45 cents.
Total revenues for the quarter gained 2 percent to $1.04 billion from $1.02 billion, which included a 2 percent rise in sales to $1.03 billion from $1.01 billion. The balance of revenues was from licensing income.
For the nine months, income attributable to Jones fell 23.5 percent to $71.8 million, or 85 cents a diluted share, from $93.9 million, or $1.09, last year. Total revenues rose 4.4 percent to $2.89 billion from $2.77 billion.
Wes Card, chief executive officer, told Wall Street analysts, “We now have a strong handle on the cost situation, and we’re benefiting from the impact of very tightly controlled inventories.”
Card explained that the firm, because retail customers are planning very cautiously, will “continue to focus on execution and emphasizing the basics, buying tightly against demand and minimizing our exposure to excess seasonal goods, productively managing our supply chain and tightly controlling our expenses.”
Card said in a telephone interview, “Raw goods costs are leveling out and under control.” He explained that pricing is becoming more consistent, allowing the company to fully focus on execution.
“I don’t see anything in the economy that signals [there’s] going to be a strong economic pickup. We’re focusing on our brands, on newness and freshness [to give] consumers a reason to buy,” he said.
In footwear, that means the perfect boot at Nine West, or in apparel, focusing on the new blazers offered in the Jones New York collection, according to Card.
The ceo also said the firm has identified a location on Madison Avenue for the first Kurt Geiger freestanding store in the U.S., with plans to open before the end of the second calendar quarter of 2012. Jones is also scouting for other Geiger locations, such as in SoHo.
For now, most of the existing shoeWoo locations will likely be converted to Nine West retail sites, Card said.
What was not discussed during the call was the company’s ongoing discussions to sell its jeanswear division to Delta Galil Industries, and analysts didn’t ask. The company said on Oct. 11 that it did “not intend to make any additional comments regarding this matter unless, and until, a formal agreement has been reached or discussions have been terminated.”