Byline: Diane E. Picard

NEW YORK — Wielding its Ralph Lauren muscle, Jones Apparel Group continues to beat profit forecasts.
For the third quarter ended Sept. 28, Jones — citing the continuing power of its licensed Lauren Ralph Lauren line — reported a 58.5 percent increase in earnings to $48.9 million, or 90 cents a share, from $30.9 million, or 58 cents a year earlier.
Sales for the three months ended Sept. 28 jumped 43.8 percent to $450.5 million from $313.2 million.
The profits surpassed a forecast issued by the firm on Oct. 1, projecting third-quarter per-share earnings at 86 to 88 cents a share, smashing Wall Street estimates at the time of 76 cents.
On the New York Stock Exchange Tuesday, Jones stock gained 1 15/16 to closed at 51 1/2.
Discussing the quarter’s results in a statement, Sidney Kimmel, chairman, said, “Sales momentum was extremely strong, with double-digit growth across our career and casual sectors. This strength, coupled with an excellent performance from our Lauren by Ralph Lauren division, contributed to the record third quarter.”
Carol A. Pope, apparel analyst with J.P. Morgan Securities Inc., said she had expected Jones to report earnings of between 86 and 88 cents a share — in line with the company’s Oct. 1 projection.
“Together, sales of Lauren and the Jones Country line were ahead 275 percent over 1996,” Pope said.
“They generated about $100 million in sales, accounting for 22 percent of total revenues.”
Looking to the fourth quarter, Pope said she expects Jones to earn 42 cents, compared with 30 cents last year.
For the year, she expects it to earn $2.23, compared with $1.50.
She noted that sales were strong across the board, with career apparel sales ahead 20 percent to $196 million and casual apparel sales gaining 35 percent to $108 million.
Pope added that Jones did not break out sales for its labels, but said in its conference call that sales in all sectors were ahead “in the double digits.” Lifestyle apparel sales were about $100 million, and suit and dress sales were $41 million, Pope said.
Allison Malkin, with SBC Warburg Dillon Read Inc., said in a research note that she estimated the Jones New York career line posted a gain of more than 20 percent, and Rena Rowan sales were down about 10 percent, as management planned this division lower in order to reposition the line.
In its Oct. 1 forecast statement, Jones had stated that it expected the Lauren line, which was introduced for fall 1996 retailing, to rack up sales of $250 million in 1997.
The backlog of open orders at the end of the third quarter was 49 percent ahead of the prior year, Kimmel noted.
“We are particularly gratified that the backlog of our core labels, exclusive of Lauren, was about 20 percent ahead of last year,” he said.
For the nine months, earnings rose 51.4 percent to $97.7 million, or $1.80, from $64.6 million, or $1.20. Sales were ahead 34.5 percent to $1.03 billion from $772.1 million.

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