NEW YORK — Consumers responding to more colorful fashion this spring allowed Jones Apparel Group to deliver strong results for its second quarter as net income rose 9.1 percent on a total revenues gain of 7.4 percent.
The apparel and footwear giant said Tuesday that income for the three months ended July 3 rose to $77.6 million, or 61 cents a diluted share, from $71.1 million, or 54 cents, in the same year-ago quarter. Total revenues jumped to $1.05 billion from $980.4 million. Included in revenues was a 7 percent increase in sales, to $1.04 billion from $974.7 million, and a 75.4 percent jump in licensing income, to $10 million from $5.7 million. The company acquired Kasper and its Anne Klein business last summer during a bankruptcy court auction, adding to its licensing income.
Peter Boneparth, chief executive officer, told Wall Street analysts during a conference call that color was the driving story for the second quarter, and that the company expects that “color will dominate this fall.”
While the Jones Collection continues to be the bedrock of the career-better business, the ceo noted: “[This] business is still not back to the point where it was historically in terms of top line, so we continue to believe that there are opportunities to grow the Jones Collection business.”
As for Jones Signature, Boneparth said the company is on plan to achieve its top-line expectation of $200 million in net sales during 2004. However, the big success story for Jones was Polo Jeans, reflecting both a new management team and the return to the concept of great product. The ceo said the Polo Jeans team introduced “better product of slightly more premium-priced denim” that led to “very, very good first half retail results” for its retail partners.
The ceo also disclosed that, in spring 2005, Jones will relaunch the Rena Rowan brand in Sears, in an exclusive arrangement with the retailer. The arrangement, he said, is designed to replace much of the Norton McNaughton volume that was at Sears.
The company completed its acquisition of Maxwell Shoe Co. on July 8. Including Maxwell, the company’s updated projection of 2004 revenues is expected to be in the range of $4.64 billion to $4.66 billion, with earnings per share coming in between $2.70 and $2.76.
Separately, the company said the board declared a 25 percent increase in its quarterly cash dividend, to 10 cents a share to all common stockholders of record as of Aug. 13, 2004, with payment to be made on Aug. 27. The board also authorized an additional $100 million common share repurchase program, which, coupled with its previous authorization, allows the company to buy back $150 million in shares.
For the six-month period, net income fell 10.8 percent to $172 million, or $1.34 a diluted share, from $192.9 million, or $1.44, a year ago, while total revenues rose 2.5 percent to $2.27 billion from $2.21 billion.