For the three months ended Oct. 28, income was down 44 percent, to $5.1 million, or 57 cents a diluted share, from $9.1 million, or $1.22, in the year-ago quarter. Sales decreased 4.4 percent, to $87.3 million from $91.3 million.
Sales in the quarter declined due to a decrease in domestic wholesale accounts with markdowns contributing to most of the drop. Company-operated full-price boutiques and outlet stores also contributed to the decrease, but to a lesser extent.
Selling, general and administrative expenses for the fourth quarter increased to 41.6 percent from 33.8 percent, due in part to severance benefits and an increase in the reserve for bad debts to cover potential exposure from a large customer who filed for bankruptcy court protection earlier this month, the Irvine, Calif.-based firm said. Jacobson’s, which filed earlier this month, lists St. John Knits on its Web site as among the designer collections sold at the chain’s 18 sites.
The company also said that it was using excess cash to accelerate the pay-down of its debt. In addition, because of continued economic uncertainty, the firm is focusing its efforts on maintaining tight control over inventory levels at its wholesale accounts and its own full-price boutiques. Hoping to gain market share when consumer demand improves, St. John Knits said it will expand its retail division during the new fiscal year. The firm opened two new boutiques in November and plans on opening five more, bringing the total to 31 at the end of fiscal 2002.
For the year, income rose 8.7 percent to $25.9 million, or $3.17 a share, from $23.8 million, or $3, during the prior year. Sales were up 8.8 percent, to $366 million from $336.5 million.
Sales rose for the year due to increases in sales of the Knit and Sport product lines to the company’s wholesale accounts, as well as in the company-operated full-price boutiques. Sales for the year in the Knit line rose 4.4 percent and accounted for 77.3 percent of the total volume, while sales for the Sport line jumped 56.1 percent and contributed 13.1 percent. Company-operated full-price boutiques and outlet stores rose 3.4 percent, or $3.8 million, to $115.9 million for the year, while same-store sales for the boutiques increased 0.6 percent.
Although privately held since 1999, some of St. John’s stock remains in public hands and it continues to report its financial results.