Shares of Jones Apparel Group Inc. fell more than 7 percent Thursday after the apparel firm reported preliminary fourth-quarter and full-year earnings results that were lower than analysts expected.
This story first appeared in the January 29, 2010 issue of WWD. Subscribe Today.
Jones said it expects adjusted earnings per share from continuing operations of 8 cents to 11 cents for the fourth quarter, and annual EPS, excluding one-time items, of $1.11 to $1.14.
Under generally accepted accounting principles, it expects a loss of $1.53 to $1.56 from continuing operations in the fourth quarter, and a loss of $1.02 to $1.05 from continuing operations for the full year.
It said fourth-quarter results will include a $138 million aftertax charge tied to its goodwill and trademark assets impairment analysis. In addition, Jones expects to report $330 million cash on hand as of Dec. 31. It previously forecasted $200 million cash on hand. The company reports earnings on Feb. 10.
“While we continue to note positive signs of economic recovery, we are maintaining a cautious and disciplined approach to execution as the environment remains uncertain,” president and chief executive officer Wesley R. Card said.
Card said the company was “encouraged by improved results, primarily from a less promotional environment throughout the holiday season,” noting that the firm continues to tightly control inventories and manage costs.
“We are positioned for growth as we continue to bring innovative, fresh concepts and brands to market, such as Rachel Rachel Roy, Jones New York Collection Knits, j. Jones New York and the recently announced Jessica Simpson Jeanswear line, which will begin shipping midyear and is anticipated to be distributed in approximately 1,000 doors,” he continued.
To date, the company has shuttered 99 stores and said it remains on track to exit 265 locations, with the balance of the closures to occur during the remainder of 2010. It had 938 units in operation at the end of 2009.
Shares of Jones closed at 14.24, down $1.09, or 7.1 percent, in trading Thursday.