PROFITS UP 42.4% IN FIRST QUARTER AT ST. JOHN KNITS

IRVINE, Calif.--With sales perking on many fronts, St. John Knits reported profits moved ahead 42.4 percent in the first quarter ended Jan. 29. The results continue to underscore the firm's ability to target a specific designer customer.
Earnings rose to $4 million, or 48 cents a share, from $2.8 million, or 34 cents, a year earlier. Earnings beat the average Wall Street estimate of 45 cents, and the firm's stock closed Tuesday at 36 1/8, up 1 1/8, in over-the-counter trading. Sales climbed 33 percent to $36.3 million from $27.3 million.
Gross margins were flat at 52.9 percent while selling, general and administrative expenses were reduced to 34.5 percent of sales from 35.5 percent.
In a conference call to analysts, Karla R. Guyer, senior vice president of marketing, said sales to the firm's top six major retail accounts were up 25 percent in the quarter and ran ahead 37.5 percent in February.
At its own stores, sales jumped 61 percent to $9.4 million, with same-store sales ahead 26 percent. The firm opened its 14th St. John boutique in Bal Harbour, Fla., in November and plans to open two boutiques, one in Chicago and the other Atlanta, in June. The company also operates three outlet stores.
Illustrating the success of its accessories, which include jewelry, silk scarves, suede belts, shoes and handbags, were up a combined 30 percent in the quarter at Saks Fifth Avenue and Neiman Marcus, Guyer said.
The Griffith & Gray line, a slightly higher priced woven line introduced this fall, "had outstanding sales at the retail level,' according to Bob Gray, chairman and chief executive officer.
Gray said the line will likely exceed the company's sales goal of $6 million this year. Gray said that by the fall the new line will be in 21 Saks units, up from 12 currently, and 15 Neiman Marcus stores, up from eight.
St. John's fragrance, introduced in late October, "is growing nicely and steadily," according to Gray.
St. John also said it is showing a fake fur outerwear line in its fall collection and is in discussions with a undisclosed European company for the distribution of an outerwear line in the U.S.
"They're doing a terrific job," said Faye Landes, an analyst at Smith Barney. "They really have their customer figured out and know how to control their business."
Analysts are looking for earnings of about $2.20 a share in its year ending October 1995, against $1.82 in 1994.
Last year, Saks Fifth Avenue accounted for 24.7 percent of sales, Neiman Marcus, 15 percent, and Nordstrom, 14.9 percent, according to St.John's recently released 10K. Sales to Best International, which distributes St. John's products in Japan, accounted for about 24.5 percent of sales. Its retail operations accounted for 20.7 percent of sales. Sales of knitwear in 1994 rose 22.1 percent to $106 million, accessories sales jumped 53.7 percent to $6.9 million and sales at retail boutiques climbed 45.4 percent to $26.5 million.--Fairchild News Service

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