By  on August 25, 2006

NEW YORK — J. Crew Group Inc. on Thursday issued its first quarterly report and staged its first conference call since going public last month — and made a good impression on almost all fronts.

Operating income increased 33 percent to $26.8 million for the second quarter ended July 29, compared with $20.1 million in the second quarter of fiscal 2005.

Revenues for the second quarter increased 17 percent to $269.2 million from $229.4 million, driven by a 16 percent comparable-store sales gain and a 5 percent increase in square footage.

Sales at stores and outlets increased 21 percent to $197.4 million, and sales from catalogues and the Web site rose 7 percent to $62.8 million.

But there was a wider net loss of $2.8 million after dividends, or 8 cents per diluted share, compared with $1.6 million, or 7 cents per diluted share, in the year ago quarter. After stripping away $10 million related to debt refinancing and $500,000 for stock option expense, there would have been a net income of $7.2 million or 20 cents per share.

For the first six months, net income totaled $1.7 million, compared with net losses of $99,000, while sales rose to $509.8 million from $439.9 million.

"We are pleased with our second-quarter results, and look forward to building on the new foundation we have created for J. Crew Group," Millard Drexler, J. Crew's chairman and chief executive officer, said in a statement. "Our team is focused on driving productivity across all areas of the business, and we are confident about our near- and long-term prospects."

On July 3, J. Crew completed its initial public offering, selling 21.6 million shares of common stock and raising $402.3 million. Subsequently, Texas Pacific Group acquired an additional 3.7 million shares with $73.5 million of proceeds from the redemption of preferred stock.

In the conference call, J. Crew made some long-term projections, among them:

l Mid-single digit comparable-store sales increases and high single-digit direct sales growth.

l Seven to 9 percent net square footage expansion annually for the next few years.

l Earnings per share growth in excess of 20 percent.

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