Jones Apparel Group boosted its profit during the first quarter of the year with sales above its expectations.
The company posted net income of $39.4 million for the first quarter period, down from $0.3 million in the same period last year. First quarter revenues were $887 million compared with $891 million for the first quarter of 2009. Gross profit margin increased 390 basis points to 36.8%, reflecting continued careful inventory management, the company said.
The 2010 first quarter results include, among other items, costs and charges of approximately $3 million related to the acquisition of Robert Rodriguez in February.
Wesley R. Card, Jones Apparel Group ceo, says, “We are very pleased with the results we achieved in the first quarter and the positioning and performance of our core brands. Sales for the first quarter exceeded expectations and operating margins increased in all segments compared with the prior year’s quarter. Jeanswear margins were exceptionally strong, which is reflective of the group’s execution and aggressive inventory management. Better apparel and footwear and accessories were also strong performers, driven by higher gross margins. Our vertical retail operations results are much improved.”
Department Stores Restocking
Analysts say demand was pretty solid across all Jones’ brands which include Nine West, Jones New York, Rachel Roy and Anne Klein. Morgan Stanley retail analyst Chi Lee says he sees “inventory restocking in the department store channel,” reflecting a growing attitude on Wall Street that consumer demand is picking up and Jones Apparel is likely to be one of the beneficiaries of the trend.
The company closed 63 retail locations during the quarter and ended the quarter with 877 locations. It is to close an additional 110 unprofitable locations by the end of 2010. Jones also launched an e-commerce site for ShoeWoo (www.shoewoo.com), a multibrand retail concept.