Jones Group Hits Q1 Loss on Costs

Kurt Geiger Summer 2012 ad

New York—Jones Group Inc. reported a first quarter loss than was lower than expected as the parent of Nine West, Jones New York and Anne Klein saw stronger sales due to a warmer spring and earlier Easter.

For the quarter ended March 31, Jones Group posted a loss of $1.2 million, or 1 cent a share, compared with a year-earlier profit of $25.7 million, or 30 cents a share. Excluding costs for acquisitions, closing some stores and restructuring, the company posted earnings per share of 31 cents.

Net sales declined 2.7% to $923.4 million, a figure the company said was “within expectations.”

Analysts’ average estimate forecast earnings of 14 cents a share on sales of $937.3 million.

“The warmer weather during the quarter, coupled with an early Easter holiday, resulted in stronger sales in all retail channels during the period than expected,” said Wesley R. Card, ceo. “Our footwear and accessories and jeanswear groups performed the best at retail, while traditional sportswear remained more challenging and promotional.”

‘Major Enhancements’ to Fall Lines

The company said gross margin improved 230 basis points due to the inclusion of its Kurt Geiger retail chain which it purchased last year and “conservative inventory planning and control.” Chief financial officer John McClain noted that Jones finished the quarter with $147 million in cash and its revolving credit line undrawn. “Our approach to inventory commitments continues to be conservative,” he added. “We believe these actions will enable us to continue to improve margins and maintain a strong balance sheet.”

As for fall business, Card said that on “a macroeconomic level, we are encouraged by generally rising consumer confidence and positive retail trends. While we believe these trends should continue, the economic environment still contains mixed signals and consumer spending is unpredictable.”

Card said the company made “major enhancements” to its fall product offerings across all brands, “most importantly to our sportswear product lines.”

In other news, Jones’ board of directors has declared a regular quarterly cash dividend of 5 cents a share for payment on May 25.

 

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