NEW YORK — Declines in its wholesale business outweighed gains at retail as St. John Knits International Inc.’s earnings slid by nearly two-thirds in the third quarter.
In the three months ended Aug. 3, the Irvine, Calif.-based sportswear maker reported net income of $1.9 million, or 29 cents a diluted share, 66.3 percent below the year-ago mark of $5.8 million, or 76 cents. Preferred stock dividends in the 2002 quarter subtracted an additional $737,000 from income allocated to common stockholders.
Sales in the quarter declined 5.1 percent to $83.5 million from $88.1 million in the like period last year.
While gross margin increased to 57.6 percent of sales from 57.4 percent last year, a $4 million increase in selling, general and administrative expenses, to 46.6 percent of sales from 39.7 percent, drove down operating margins to 11 percent of sales from 17.7 percent.
St. John, in a Form 10-Q filing with the Securities and Exchange Commission, attributed the SG&A increase to new store costs and higher sampling and design salary expenses, only partially offset by a $900,000 decrease in advertising expenditures.
Dogged by lower unit sales of its Knit and Sport product lines, wholesale volume fell 6.7 percent to $69.1 million while the unit’s operating income sank a heftier 27.9 percent, to $12.1 million. The firm said the liquidation of Jacobsons reduced sales by about $1.7 million versus the prior year.
“In addition, sales to the company’s three largest wholesale customers decreased during the quarter by approximately $7.5 million, due to a reduction in their inventory balance from the end of the third quarter of fiscal 2003,” the firm said in the filing.
Some of that contraction was offset by an increase in international sales of about $2.1 million, but a more significant factor was growth, both through store openings and same-store sales increases, within St. John’s retail operations. Retail sales expanded 14.7 percent, to $35.4 million, as comparable-store sales rose 7.2 percent during the quarter.
Operating profits in the retail segment skyrocketed 65.6 percent to $1.1 million.
In the past year, St. John has opened six boutiques and four outlet stores and closed two St. John Home stores and one St. John Home outlet. At the end of the third quarter, it operated 30 St. John boutiques and 14 outlets.For the nine months, net income declined 53 percent to $8.9 million, or $1.33 a diluted share, from $18.9 million, or $2.34. No preferred dividends were paid in the most recent period, versus $3.5 million of such disbursements in the year-ago period.
Sales rose fractionally to $269.4 million, 0.4 percent above last year’s $268.3 million.
Although privately held since a July 1999 buyout, some of St. John’s stock remains in public hands and it continues to report its financial results.
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
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion