J. Crew Q3 Profit Leaps 53.7% on Sales, Better Margins

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New York—Thanks to rising sales and expanding gross margins, J. Crew reported Thursday that its third quarter net income jumped 53.7%.

For the quarter ended Oct. 27, the specialty retailer posted net income of $33.2 million compared with $21.6 million in the year-ago quarter.

Total net revenue rose 16% to $555.8 million, with comparable store sales increasing 10%. Store sales increased 17% to $391.7 million. Direct sales increased 13% to $156.8 million following an increase of 18% in the third quarter last year.

Gross margin widened to 47.3% from 42.1% in the third quarter last year. Last year included amortization of inventory step-up from purchase accounting of $5.8 million.

Earlier this week, J. Crew revealed that its first store outside North America will be located on Regent Street, in London. The 17,000-square-foot store will be situated on the corner of Regent Street and New Burlington Street and is set to open in late 2013.

“London was an easy decision—it’s a place where people understand and respect the integrity of great style and great design. We share this appreciation and are excited to introduce J.Crew to more customers throughout the UK,” said Millard “Mickey” Drexler, chairman and chief executive.