Double-digit growth in wholesale accessories, footwear and better apparel helped The Jones Group Inc. narrow its fourth-quarter loss.
This story first appeared in the February 10, 2011 issue of WWD. Subscribe Today.
In the three months ended Dec. 31, the net loss was $40.1 million, or 47 cents a diluted share, down from $130.4 million, or $1.53, during the final quarter of 2009. Adjusted EPS was 4 cents, slightly better than the 2-cent-a-share profit the company projected when it updated guidance last month.
Total revenues grew 12.5 percent to $873.7 million from $776.7 million, highlighted by a 19.4 percent increase in wholesale better apparel to $246.2 million and a 26 percent hike in wholesale footwear and accessories to $278.7 million. Growing less robustly were wholesale jeanswear, up 2.9 percent to $180.2 million, and retail sales, which were up 4.7 percent to $206.6 million.
Wesley Card, chief executive officer, told Wall Street analysts the company was “very pleased as this was the first sales increase of this magnitude that we registered in many years.”
After addressing increased promotional activity during the holiday season, Card commented on the higher costs now working through the pipeline for items such as for raw materials and labor.
“This is translating into price increases for the first time in many years,” he said, “and it is difficult to judge the impact this may have on consumer spending. Pricing increases will be modest in the first half of 2011, but more pronounced [when] we move into the back half.”
Card told WWD the firm has raised prices for some of its fashion pieces for spring, but not yet for more basic commodity pieces.
“For fall, you’ll see broad-based price increases in the mid- to high teens, or 15 percent to 20 percent,” Card said.
Noting that retailers were too light on inventory in the first half of 2010 and then ramped up too much for the second half, he said he now expects a more cautious approach to orders as retailers have been buying cautiously for spring.
For the full year, the company earned $53.8 million, or 62 cents a diluted share, against a loss of $86.6 million loss, or $1.02, in 2009. Total revenues rose 9.5 percent to $3.64 billion from $3.33 billion.
Jones’ shares closed Wednesday at $13.24, up 16 cents, or 1.2 percent.