ST.JOHN EARNINGS SKYROCKET
NEW YORK — Demand for knit and sports product lines at both its wholesale and its own retail operations helped St. John Knits International deliver a 157.8 percent knockout improvement in income during its first quarter.
The Irvine, Calif.-based firm reported income of $9.6 million, or $1.30 a diluted share, for the three months ended Jan. 28. This compares to $3.7 million, or 42 cents, in the year-ago period. Sales rose 28.9 percent, to $101.2 million from $78.5 million.
Sales for its retail division increased 8.2 percent, to $31.1 million and same-store sales increased 4.5 percent. The company currently operates 23 signature boutiques and 10 outlet stores.
Bob Gray, founder, chairman and chief executive officer of St. John, said in a statement that he was extremely pleased with the strong performance, especially in light of the current economic uncertainty.
The gross profit margin rose to 55.9 percent from 55.4 percent, due to the leveraging of fixed production costs and an improvement in labor efficiency in the manufacturing of the knit product line.
The company said incurred interest expense dropped to $7.8 million from $8.2 million, due to an $11.4 million reduction in total debt outstanding to $256 million and lower interest rates.
In July 1999, the company completed the repurchase of 93 percent of its outstanding shares in a privatization led by Vestar Capital Partners and the Gray family. With about 7 percent of its stock still held by the public, St. John continues to report its financial results.
As previously reported, H.W. Mullins has signed on as ceo of St. John Knits International, after his stunning departure as chairman and ceo of Neiman Marcus late last year. Mullins had said that St. John Knits was the fastest-selling brand with the best regular-price sell-throughs in the chain.
Mullins will assume his ceo role at the end of this month, moving from his home in Dallas to St. John headquarters in Irvine, Calif. He succeeds Gray, who will continue as chairman.