J. Crew Group, Inc. Announces Third Quarter Fiscal 2009 Results
Third Quarter Diluted EPS of $0.67
Third Quarter highlights:
-- Revenues increased 14% to $414.1 million . Store sales increased 20% to
$300.1 million , with comparable store sales increasing 8%. Comparable
store sales decreased 3% in the third quarter of fiscal 2008. Direct
sales (Internet and Phone) rose by 4% to $105.5 million . Direct sales
increased 13% to $101.8 million in the third quarter of fiscal 2008.
-- Gross margin increased to 48.4% of revenues from 41.6% of revenues in
the third quarter of fiscal 2008.
-- Operating income increased to $75.2 million , or 18.2% of revenues,
compared to $32.5 million , or 9.0% of revenues, in the third quarter of
fiscal 2008.
-- Net income was $43.9 million , or $0.67 per diluted share, compared to a
net income of $19.0 million , or $0.30 per diluted share, in the third
quarter of fiscal 2008.
First Nine Months highlights:
-- Revenues increased 7% to $1,117.4 million . Store sales increased 11% to
$799.9 million , with comparable store sales decreasing 0.4%. Comparable
store sales decreased 0.4% in the first nine months of fiscal 2008.
Direct sales rose by 1% to $289.0 million . Direct sales increased 14%
to $285.9 million in the first nine months of fiscal 2008.
-- Gross margin increased to 44.2% of revenues from 43.1% of revenues in
the first nine months of fiscal 2008.
-- Operating income increased 22% to $142.7 million , or 12.8% of revenues,
compared to $117.1 million , or 11.3% of revenues, in the first nine
months of fiscal 2008. Operating income in the first nine months of
fiscal 2009 includes charges of approximately $5.3 million related to
our workforce reduction, underperforming stores and lease termination
actions.
-- Net income was $82.9 million , or $1.29 per diluted share, compared to a
net income of $67.7 million , or $1.06 per diluted share, in the first
nine months of fiscal 2008.
Balance Sheet highlights as of
-- Cash and cash equivalents were $246.8 million at the end of the third
quarter compared to $114.5 million at the end of the third quarter of
fiscal 2008.
-- Inventories at the end of the quarter were $223.9 million , compared to
$250.1 million at the end of the third quarter of fiscal 2008.
Inventory per square foot at the end of the quarter decreased 17%
compared to the end of the third quarter of fiscal 2008.
Guidance
The Company currently expects fourth quarter fiscal 2009 diluted earnings per share in the range of
Conference Call Information
A conference call to discuss third quarter results is scheduled for today,
About
ForwardLooking Statements:
Certain statements herein are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including the strength of the economy, changes in the overall level of consumer spending or preferences in apparel, our ability to compete with other retailers, the performance of the Company's products within the prevailing retail environment, our strategy and expansion plans, systems upgrades, reliance on key personnel, trade restrictions, political or financial instability in countries where the Company's goods are manufactured, postal rate increases, paper and printing costs, availability of suitable store locations at appropriate terms and other factors which are set forth in the Company's Form 10-K and in all filings with the
Exhibit (1)
J. Crew Group, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in
thousands,
except
percentages
and per
share Three Months Three Months Nine Months Nine Months
data) Ended Ended Ended Ended
October 31, November 1, October 31, November 1,
----------- 2009 2008 2009 2008
----------- ----------- ----------- -----------
Net sales
Stores $300,066 $250,870 $799,871 $722,259
Direct 105,480 101,812 289,012 285,958
------- ------- ------- -------
405,546 352,682 1,088,883 1,008,217
Other 8,563 10,398 28,551 31,716
----- ------ ------ ------
Total
Revenues 414,109 363,080 1,117,434 1,039,933
Costs of
goods
sold,
buying and
occupancy
costs 213,682 212,212 623,844 591,447
------- ------- ------- -------
Gross
Profit 200,427 150,868 493,590 448,486
As a
percent of
revenues 48.4% 41.6% 44.2% 43.1%
Selling,
general
administrative
expenses 125,241 118,321 350,924 331,360
As a
percent of
revenues 30.2% 32.6% 31.4% 31.9%
---- ---- ---- ----
Operating
income 75,186 32,547 142,666 117,126
As a
percent of
revenues 18.2% 9.0% 12.8% 11.3%
---- --- ---- ----
Interest
expense,
net 1,052 570 3,207 4,370
----- --- ----- -----
Income
before
income
taxes 74,134 31,977 139,459 112,756
Provision
for income
taxes 30,265 12,936 56,535 45,091
------ ------ ------ ------
Net income $43,869 $19,041 $82,924 $67,665
======= ======= ======= =======
Income per
share:
Basic $0.70 $0.31 $1.33 $1.10
Diluted $0.67 $0.30 $1.29 $1.06
Weighted
average
shares
outstanding:
Basic 62,775 61,878 62,406 61,588
Diluted 65,223 64,078 64,317 64,127
Exhibit (2)
J. Crew Group, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
October 31, January 31, November 1,
(In thousands) 2009 2009 2008
-------------- ----------- ----------- -----------
Assets
Current assets:
Cash and cash equivalents $246,785 $146,430 $114,456
Inventories 223,894 187,044 250,140
Prepaid expenses and other
current assets 30,027 34,926 36,240
Income taxes receivable - 23,116 6,918
--- ------ -----
Total current assets 500,706 391,516 407,754
Property and equipment, net 198,086 201,675 198,032
Other assets 19,683 20,618 31,302
------ ------ ------
Total assets $718,475 $613,809 $637,088
======== ======== ========
Liabilities and
Stockholders' equity
Current liabilities:
Accounts payable $117,823 $119,719 $134,576
Other current liabilities 92,022 83,889 84,415
Current portion of long-
term debt 1,028 800 -
Deferred income taxes, net 4,049 4,049 -
----- ----- ---
Total current liabilities 214,922 208,457 218,991
Long-term debt 98,458 99,200 100,000
Deferred credits 69,015 73,815 74,378
Other liabilities 6,817 7,388 7,654
Stockholders' equity 329,263 224,949 236,065
------- ------- -------
Total liabilities and
stockholders' equity $718,475 $613,809 $637,088
Exhibit (3)
Actual and Projected Store Count and Square Footage*
Fiscal 2009
Total stores Number of Number of
open at stores stores closed Total stores
beginning of opened during during open at end
Quarter the quarter the quarter the quarter of the quarter
------- ------------ ------------- ------------- --------------
1st Quarter
(Actual) 300 12 2 310
2nd Quarter
(Actual) 310 9 0 319
3rd Quarter
(Actual) 319 2 1 320
4th Quarter
(Projected) 320 1 0 321
----------------- --- --- --- ---
Fiscal 2009
Reduction of
Gross square gross square
feet for feet for
Total gross stores stores
square feet opened or closed or Total gross
at beginning expanded downsized square feet
of the during the during the at end of
Quarter quarter quarter quarter the quarter
------- ------------ ------------ ------------ -----------
1st Quarter
(Actual) 1,864,133 52,185 (8,258) 1,908,060
2nd Quarter
(Actual) 1,908,060 38,166 0 1,946,226
3rd Quarter
(Actual) 1,946,226 10,274 (2,872) 1,953,628
4th Quarter
(Projected) 1,953,628 4,512 0 1,958,140
------------ --------- ----- --- ---------
* Above store count and square footage summary excludes three clearance store locations. One clearance store location was opened during the third quarter of Fiscal 2009.
SOURCE
James S. Scully, Chief Administrative Officer and Chief Financial Officer, +1-212-209-8040, Investor Contacts, Allison Malkin, Chad Jacobs, Joe Teklits, all of ICR, Inc., +1-203-682-8200