NEW YORK — J. Crew Group Inc. continued its winning ways through the spring season with its preppy, quirky and colorful styles.
The company reported growth in profits and sales for the first quarter ended April 29, including a 23 percent gain in operating income to $28 million from $23 million in the year-ago period. Net income rose 60 percent to $8 million from $5 million.
Selling was strong as same-store sales increased 12 percent for the quarter. The double-digit boost came after a 37 percent comps jump in the year-ago period. Total revenues for the 13 weeks increased 14 percent to $240 million from $211 million.
J. Crew has been in turnaround mode under the leadership of Millard Drexler, chairman and chief executive officer, and Jeff Pfeifle, president. With results continuing to be strong, the likelihood increases that the firm will launch an initial public offering, possibly this year.
The retailer provided a breakdown by division, indicating that store sales, including outlets, gained 15 percent to $167 million from $146 million. Direct sales, which include Internet and catalogue results, increased 12 percent to $66 million from $59 million.
Gross margin fell slightly to 45 percent in the quarter, compared with 46 percent in the year-ago quarter. Selling, general and administrative expenses rose to $81 million, from $74 million, but decreased as a percentage of sales to 34 percent from 35 percent in the 2005 quarter. Interest expense rose to $19 million in the first quarter from $17 million in the year-ago period primarily as a result of a gain in noncash preferred stock dividends, the firm said.
In addition, two new formats, including the Crewcuts children’s business and Madewell, a casual sportswear business, are being rolled out. Potential investors like to see that a company has growth potential by launching new businesses. Madewell is a women’s-only, item-driven line focused on “timeless and ageless” casual merchandise priced 20 to 30 percent lower than J. Crew. The first Madewell store will open in NorthPark Center in Dallas in August. The first Crewcuts children’s store opened in NorthPark Center last month.
J. Crew, which is owned by the Texas Pacific Group, operates 164 stores and 45 outlets as well as the J. Crew catalogues and Web site.
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