ST. JOHN EARNINGS DROP 39.1%
Byline: Dan Burrows
NEW YORK — Relatively strong sales in its own stores provided a first-quarter bright spot for St. John Knits International Inc. as earnings and sales both wilted in the weak retail environment.
The Irvine, Calif.-based marketer of women’s apparel and accessories reported that net income dropped 39.1 percent to $5.9 million, or 70 cents a diluted share, from $9.6 million, or $1.30, during the year-ago period.
Sales for the three months ended Jan. 27 slouched 13.1 percent to $88 million from $101.2 million last year.
However, comparable-store sales in St. John’s own stores increased 7.4 percent, which the company viewed as indicative of “underlying strength of consumer demand for its products.” Additionally, the increase in sales at its own full-price boutiques helped lift the gross profit margin for the quarter to 56.2 percent from 55.9 percent in the year-ago period.
Decreases in sales and earnings were attributed to “across the board inventory reductions” by retailers and “increased wholesale markdown expense.”
Commenting on the results in a statement, chief executive officer Bob Gray said that although sales were down, he was satisfied with the first-quarter results given the weak retail environment since the middle of last year. Gray noted that sales for the quarter grew 9.4 percent compared to the third quarter of fiscal 2001 and were flat when compared to fourth-quarter fiscal 2001 sales.
The firm, which generates most of its sales from the St. John and St. John Sport by Marie Gray trade names, expects a better year in 2002 by maintaining tight control over inventory levels and by expanding its retail division. Before yearend, the company intends to open another five full-price boutiques and relocate two extant stores to bring the total number of company-operated full-price units to 31.
Although privately held since 1999, some of St. John’s stock remains in public hands and it continues to report its financial results.