NEW YORK — Expanding retail sales and strong same-store sales partially offset weak domestic wholesale performance to allow St. John Knits International Inc. to report essentially flat earnings in the second quarter of 2002.
For the three months ended April 28, the Irvine, Calif.-based women’s wear marketer reported net income inched down 0.3 percent to $7.30 million, or 89 cents a diluted share. That compares with net income of $7.32 million, or 93 cents, in last year’s comparable quarter.
Net sales for the period dipped 4.9 percent to $92.3 million from $97.1 million a year ago, as St. John’s domestic retail account instituted inventory reductions due to the weak economic environment. However, company-operated retail stores made up for much of that decline, as net retail sales grew 15 percent to $38.3 million from $33.3 million in the year-ago period. Moreover, comparable-store sales at St. John-operated stores gained 9.9 percent compared with last year.
Cost cuts also helped profits remain static in the face of lower sales as the company slashed $1.2 million in selling, general and administrative expenses from a year ago.
Commenting on the quarter in a statement, chief executive officer Bob Gray said that he was pleased with the results, given the weak retail environment, and that the company will continue its efforts toward maintaining tight inventory control and expanding its retail division.
During the second quarter, St. John opened full-price boutiques in Tampa and San Francisco, to bring the total number of company-operated full-price boutiques to 28. During the remainder of fiscal 2002, the company plans to launch three more full-price boutiques in Orlando, Fla., San Jose, Calif., and Short Hills, N.J. It will also relocate its store in Atlanta and shutter its Munich location.
For the first six months of the fiscal year, St. John reported net income fell 22.4 percent to $13.2 million, or $1.59 a diluted share. That compares with last year’s earnings of $17 million, or $2.23.
Net sales dropped 9.1 percent to $180.2 million from $198.2 million in the year-ago period. Sales at company-operated retail stores increased 13.7 percent to $75.3 million from $66.2 million in the year-ago period as same-store sales rose 8.5 percent.
Although now privately held, some of St. John’s stock remains in public hands and it continues to report its financial results.