New York—Jones Apparel Group Inc., which include brands such as Jones New York and Anne Klein, said today that its second-quarter profit almost doubled, helped by lowered inventory levels and strong consumer demand for its largest brand, Nine West.
Overall revenues, which include net sales and licensing income, increased 6.9% to $859.6 million, beating Wall Street forecasts. Wes Card, ceo, said in a statement released that the company’s higher-end apparel and shoes had performed particularly well.
Although Card cautioned that recent economic indicators, such as the recent decline in consumer confidence and an unpredictable back to school season may affect upcoming sales, he added that “we are booked solidly. The consumer is clearly back.” Indeed, Card predicted sales in the second half to continue to increase and that the company is on the way to generating its first annual revenue increase since 2005.
The company raised its sales outlook for the year to as much as $3.7 billion after having already raised the guidance to as much as $3.54 billion in April.
Card also added Jones, which this year bought stakes in shoe designer brand Stuart Weitzman and apparel label Robert Rodriguez, will continue to consider acquisitions as part of its growth strategy.
Net income rose to $24.5 million, or 30 cents a share, from $12.6 million, or 15 cents, a year earlier. Revenue including licensing income in the quarter ended July 3 increased 7% to $859.6 million. Gross margin expanded to 36.9% up from 35%. Inventory declined 3%. Online sales continued to grow, increasing 36% to $16 million. Excluding acquisition-related and other costs, the company said it would have earned 45 cents a share.
Footwear, Accessories Sales Jump
The company’s wholesale footwear and accessories sales jumped 35% to $265 million. Wholesale better apparel sales, which include Anne Klein, rose 13% to $261 million. Wholesale jeans sales, including brands such as l.e.i., fell 14% to $191 million.
Jones’ own retail sales, accounting of less than 20% of the total, fell 3.3% to $178 million. Jones, which shut 41 stores in the second quarter to end the period with 880 shops, said it expects to close an additional 80 unprofitable locations by the end of the year.
In its regulatory filing, Jones reported that department stores are expected to make up about 48% of the company’s total while other mass merchants, such as Walmart, account for 8% of total.
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