NEW YORK — Barneys New York joined the increasingly festive tone of the luxury sector on Monday with third-quarter earnings that leaped 43.9 percent.
This story first appeared in the November 25, 2003 issue of WWD. Subscribe Today.
For the three months ended Nov. 1, the high-end retailer reported a profit of $4.1 million, or 29 cents a diluted share, versus income of $2.9 million, or 21 cents, in the year-ago period. Sales rose 8.3 percent to $111.9 million from $103.3 million and were up 7.8 percent on a comparable-store basis.
With the overall sales momentum continuing from the second quarter, Howard Socol, chairman, president and chief executive, said in a statement, “The strength we are seeing in the sales trends in both our luxury business and contemporary Co-op business gives us a sound platform for future growth.”
Top performing merchandise categories included designer, men’s and women’s Co-op, Barneys private label ready-to-wear collection, jewelry and accessories and men’s sportswear.
Looking ahead, Socol said the current fourth quarter has begun with a solid start at both the full-price and outlet stores.
“We are very focused on holiday,” Socol said. “Our inventory remains fresh and we have a strong flow of new merchandise planned to support our sales initiatives.”
In addition, he noted the firm increased its holiday mailer drops, hired additional sales associates and developed targeted sales programs “all geared toward enhancing our customer’s shopping experience.”
Gross profit as a percent of sales in the quarter rose 50 basis points to 45.3 percent, including a $600,000 benefit related to the reversal of an accrual no longer considered necessary. Offsetting that was a 210-point reduction in selling, general and administrative costs to 36.4 percent of sales from the year-ago figure of 38.5 percent.
Over the last few weeks, a steady drumbeat of solid earnings and sales results have come from the world’s luxury players, including Bulgari in Italy, Burberry in the U.K., Hermès in France and Neiman Marcus in the U.S.
“Virtually all product categories are doing well, with leather goods and jewelry leading the way, perfumes benefiting from a seasonally strong time of year and even ready-to-wear posting modest gains,” Dana Telsey, an analyst at Bear Stearns, wrote in a recent research note. “Luxury goods executives are beginning to use a much more encouraging tone about future sales and profit prospects.”
For the nine months, income declined 71.5 percent to $829,000, or 6 cents a diluted share, compared to income of $2.9 million, or 21 cents. Sales for the period vaulted 5.3 percent to $292 million from $277.4 million and improved 4.9 percent on a comp basis.