Jones Group Q1 Profit Falls On Higher Costs and Weitzman Acquisition
Sales, however, increased 8% benefiting from the Stuart Weitzman brand. Moreover, both adjusted earnings and revenues topped analysts’ estimates.
Net income for the quarter declined to $24.9 million or 30 cents a share from $37.5 million or 45 cents a share in first quarter 2010. Excluding one-time charges, adjusted income was $31.4 million, or 38 cents a share, compared to $39 million, or 47 cents a in the previous year.
Revenues for the quarter increased to $961.3 million from $887.3 million last year. Net sales were $949 million this year and $876.1 million a year ago.’
Analysts’ average estimates, which usually exclude special items, forecast profits of 30 cents a share on net sales of $938.67 million.
The apparel, footwear and accessories company, whose brands include Nine West and Jones New York, said its quarterly results included about $11 million in costs and charges tied to its Stuart Weitzman acquisition and other restructuring and strategic review costs. Last year’s quarter included costs and charges totaling approximately $3 million.
Meanwhile the company said Wednesday that it is “cautiously optimistic” that consumer spending will stay relatively strong.
Jones said in February it would raise prices on clothes and its more expensive footwear in first half of the year, then follow that with hikes across all of its products in the second half.
“So far, we’ve noted little to no price resistance by our customer,” Wesley Card, ceo, said told analysts on a conference call on Wednesday.
Jones Group also declared a quarterly dividend of 5 cents per share that will be paid May 27 to shareholders of record May 13.
Jones has evidently been shopping around for additional brands since buying Stuart Weitzman. Last week, reports surfaced that the company had put in a bid to takeover British luxury footwear brand, Jimmy Choo.
Liz Claiborne Inc. Q1 Loss Widens As Business Shifts From Namesake Brands
New York—Liz Claiborne Inc. reported Wednesday that its first quarter net loss grew more than expected as the company shifts its focus away from its namesake brands.
For the three months ended April 2, the company posted a net loss was $96.3 million, or $1.02 per share, compared with a loss of $71.8 million, or 76 cents per share, a year earlier. Its adjusted loss from continuing operations was 56 cents per share worse than the 31 cents per share adjusted loss that was analysts’ average estimate.
Revenue fell 12% to $513.2 million, down from $584.2 million and below the $573.5 million analysts’ average estimate expected.
Kate Spade Sales Up More than 70%
The company noted that the shift of its Liz Claiborne brands to a licensing model under agreements with department store JCPenney and QVC cost it $58 million in revenue. Otherwise sales would have fallen $13 million, or 2.2%.
But other brands under the company’s umbrella fared better. William L McComb, ceo, said: “Direct to consumer comparable sales for March and estimated month to date comparable sales for April reflect both the impact of the Easter shift as well as the current trend in our businesses. At kate spade, we continue to see exceptional performance across all product categories, channels and geographies.”
Net sales for kate spade were $59 million, a 71.7% increase compared to 2010, driven by increases in e-commerce, specialty retail, wholesale non-apparel, outlet and wholesale apparel, the company said.
“Lucky Brand is now gaining momentum across the store, benefiting from strong sell throughs of their spring assortments. As we forecast on the last call, Juicy Couture’s performance was challenging in the quarter. We are excited about improvements in product already in the pipeline, driven by Leann Nealz and her team, and look forward to a positive impact on the business by Holiday,” McComb added.
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