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.For the second half, Drexler projected conservative comps and conservative inventories and offered his philosophy on retail success in light of the outlook. "At the end of the day it's the [nature of] the product investment. We look at the investment by style and product….The rule is, if the goods are good, you usually beat your plan."A post-IPO J. Crew "moves forward with increased financial flexibility," Drexler told analysts. On the selling side, the business has momentum. The second quarter was marked by "balanced growth in women's and men's and all product categories," Drexler said. J. Crew shares rose 55 cents, or 2.1 percent, to close at $26.70 on the New York Stock Exchange. The shares added 99 cents, or 3.7 percent, to $27.69 in after-hours trading, following the release of the results.Analysts were most curious about J. Crew's two new growth vehicles, Crewcuts and Madewell, which is lower priced and more casual than the J. Crew brand and opened its first store in NorthPark Center in Dallas on Tuesday. A second Madewell will open in the Century City mall in Los Angeles on Sept. 2. "This is R&D for us. We will update you as we progress," said Drexler. Analysts had more questions about Crewcuts, the new children's division launched this year. It currently operates two freestanding stores, and 10 shops inside J. Crew stores. Drexler said two additional in-store shops will be added before the end of the year, and next year another 10 to 20 in-store shops will be up and running. Drexler said the company will stay focused on driving productivity across all areas of the company and build on "key franchise businesses," which he listed as chinos; T-shirts; Italian cashmere; special occasion, including dresses and bridal; hair goods; flip-flops, and suitings. "We are very religious about key franchise categories," Drexler said. He also characterized the direct business as very healthy and said it was driving customers to the Web site.J. Crew operates 169 retail stores, 50 outlets, the J. Crew catalogue and jcrew.com. Among those bestowing kudos on Drexler and his team was Jennifer Black, president of Jennifer Black Associates, who asked Drexler what he wished his stores had more of in the second quarter. "More dresses, for sure. The other thing is we wished we had were more hoodies."In her "store checks" review earlier in the week, Black said, "J. Crew's assortment is extremely compelling. The merchandise is clean and sharp looking, in true J. Crew style. J. Crew is very focused on corduroy bottoms. In-store inventories look light. Stores are virtually absent promotions."
Exclusive: @isabelmarant and @lorealmakeup have teamed up to create a capsule makeup collection. "She is rather natural in the day but doesn't have time to go back home before going out [in the evening] and redo her entire beauty look," said Marant on the 5 products included in the collection, which will launching in September. Read @jenniferbethweil's interview with the designer on WWD.com. #wwdnews #wwdbeauty
After 17 years, Tomas Maier is leaving @bottegaveneta. “I am deeply grateful to him and I personally thank him for the work he accomplished, and for the exceptional success he helped to achieve,” said François-Henri Pinault, head of parent company @kering_official. Head to WWD.com for more on his departure. #wwdnews #wwdfashion (📷: Davide Maestri)
@shaymitchell is no stranger to teaming up with beauty brands, but she’s made her latest partnership official: She’s signed with @buxomcosmetics as global creative brand ambassador, WWD learned exclusively. Mitchell and Buxom will collaborate on campaign development, social media strategy and content and new product and shade development. Read more on WWD.com. #wwdbeauty (📷: @clint_spaulding)
Today we’re at the WWD Retail 20/20 Forum where industry leaders will be talking about the future of shopping for fashion, footwear and beauty. Tune in on Instagram Live at 9 am and 3:30 pm to hear from two of our speakers –– @therealreal’s Rati Levesque and @bandier’s Stephen Ippolito. #wwdsummits (📷: @elizaflorendo)
Seen last night at @coach’s launch party for “Life Coach,” an interactive pop-up in Soho: @joansmalls. Open now, visitors of the pop-up can engage in themes of “creativity and self-expression,” through tarot, carnival games, live performances and art. See the rest of the party pics on WWD.com. #wwdeye (📷: @vnina)
“We figure there’s enough cynicism to go around the world right now let’s go out there and be ourselves, let’s be enthusiastic, let’s have positive energy, which is something I think a lot of people really want and need right now,” said musician @joshgroban ahead of hosting the Tony Awards with @sarabareilles. Read @leighn’s interview with Groban on how he picked his look for the night, his next record and more on WWD.com. #wwdeye #tonyawards (📷: @vnina)
“Rock as an attitude and not a uniform. Street as a style and not just clothing. Sportswear as the new normality,” @paul_surridge said of his first @roberto_cavalli men’s wear collection, previewed here. The British designer joined the brand as the creative director in May 2017, and is gearing up to unveil his debut for the label with a runway show at the Florence Charterhouse on June 13 at #PittiUomo. Head to WWD.com to read more about his collection and see more sneak peek photos. #wwdfashion (📷: @simonelezzi)