J.Crew Group, Inc. Announces Fourth Quarter and Fiscal 2009 Results
- Fourth Quarter Revenues Rise 19% to $460.6 million
- Fourth Quarter Diluted EPS of $0.61
- Fiscal 2009 Diluted EPS of $1.91
NEW YORK, March 9, 2010 /PRNewswire via COMTEX/ -- J.Crew Group, Inc. (NYSE: JCG) today announced financial results for the three months (fourth quarter) and fiscal year ended January 30, 2010 (fiscal 2009).
Fourth Quarter highlights:
- Revenues increased 19% to $460.6 million. Store sales increased 23% to $311.1 million, with comparable store sales increasing 17%. Comparable store sales decreased 13% in the fourth quarter of fiscal 2008. Direct sales (Internet and Phone) increased 13% to $139.2 million. Direct sales decreased 2% to $123.0 million in the fourth quarter of fiscal 2008.
- Gross margin increased to 43.9% of revenues from 27.6% of revenues in the fourth quarter of fiscal 2008. The increase in gross margin is primarily due to decreased markdowns and promotional selling in the fourth quarter of 2009 compared to 2008.
- Operating income increased to $68.6 million, or 14.9% of revenues, compared with an operating loss of $20.4 million, or 5.3% of revenues, in the fourth quarter of fiscal 2008.
- Net income in the fourth quarter of fiscal 2009 was $40.4 million, or $0.61 per diluted share. Net loss was $13.5 million, or $0.22 per diluted share, in the fourth quarter of fiscal 2008.
Millard Drexler, J.Crew's Chairman and CEO stated: "We are extremely pleased with all we achieved in 2009. Our bar has been set high and it is our continued mission to be creative, to be innovative, and to emotionally connect with our customers."
Fiscal 2009 highlights:
- Revenues increased 11% to $1,578.0 million. Store sales increased 14% to $1,110.9 million, with comparable store sales increasing 4%. Comparable store sales decreased 4% in fiscal 2008. Direct sales increased 5% to $428.2 million. Direct sales increased 8% to $408.9 million in fiscal 2008.
- Gross margin increased to 44.1% of revenues from 38.9% of revenues in fiscal 2008.
- Operating income increased to $211.3 million, or 13.4% of revenues, compared to $96.7 million, or 6.8% of revenues, in fiscal 2008.
- Net income for fiscal 2009 was $123.4 million, or $1.91 per diluted share. Net income was $54.1 million, or $0.85 per diluted share, in fiscal 2008.
Balance Sheet highlights as of January 30, 2010:
- Cash and cash equivalents were $298.1 million at the end of the fourth quarter and after a voluntary principal payment of debt of $50 million made during fiscal 2009. Cash and cash equivalents were $146.4 million at the end of fiscal 2008.
- Inventories at the end of the fourth quarter were $190.2 million, compared to $187.0 million at the end of the fourth quarter of fiscal 2008. Inventory per square foot at the end of fiscal 2009 decreased 3%, compared to the end of fiscal 2008.
Guidance
The Company currently expects first quarter fiscal 2010 diluted earnings per share in the range of $0.48 to $0.53 and fiscal 2010 diluted earnings per share in the range of $2.20 to $2.30.
Conference Call Information
A conference call to discuss fourth quarter results is scheduled for today, March 9, 2010, at 4:30 PM Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 407-0784 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at http://www.jcrew.com/. A replay of this call will be available until March 16, 2010 and can be accessed by dialing (877) 660-6853 and entering account number 3055 and conference ID number 345777.
About J.Crew Group, Inc.
J.Crew Group, Inc. is a nationally recognized multi-channel retailer of women's, men's and children's apparel, shoes and accessories. As of March 9, 2010, the Company operates 244 retail stores (including 218 J.Crew retail stores, 9 Crewcuts and 17 Madewell stores), the J.Crew catalog business, jcrew.com, and 79 factory outlet stores. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company's website http://www.jcrew.com/.
Forward-Looking 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, the performance of the Company's products within the prevailing retail environment, 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 SEC made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Exhibit (1) J.Crew Group, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, Three Three Fiscal Fiscal except Months Months Year Year percentages Ended Ended Ended Ended and per share January January January January amounts) 30, 2010 31, 2009 30, 2010 31, 2009 Net sales Stores $311,061 $252,026 $1,110,932 $974,284 Direct 139,174 122,957 428,186 408,916 450,235 374,983 1,539,118 1,383,200 Other 10,374 13,054 38,924 44,770 Total Revenues 460,609 388,037 1,578,042 1,427,970 Costs of goods sold, buying and occupancy costs 258,542 281,101 882,385 872,547 Gross Profit 202,067 106,936 695,657 555,423 As a percent of revenues 43.9% 27.6% 44.1% 38.9% Selling, general and administrative expenses 133,471 127,378 484,396 458,738 As a percent of revenues 29.0% 32.8% 30.7% 32.1% Operating income (loss) 68,596 (20,442) 211,261 96,685 As a percent of revenues 14.9% (5.3%) 13.4% 6.8% Interest expense, net 2,177 1,570 5,384 5,940 Income (loss) before income taxes 66,419 (22,012) 205,877 90,745 Provision (benefit) for income taxes 25,983 (8,463) 82,517 36,628 Net income (loss) $40,436 $(13,549) $123,360 $54,117 Income (loss) per share: Basic $0.64 ($0.22) $1.97 $0.88 Diluted $0.61 ($0.22) $1.91 $0.85 Weighted average shares outstanding: Basic 63,085 61,991 62,583 61,687 Diluted 65,882 61,991 64,714 64,027 Exhibit (2) J.Crew Group, Inc. Condensed Consolidated Balance Sheets (Unaudited) January 30, January 31, (In thousands) 2010 2009 Assets Current assets: Cash and cash equivalents $298,107 $146,430 Inventories 190,231 187,044 Prepaid expenses and other current assets 29,522 34,926 Prepaid income taxes 1,455 23,116 Total current assets 519,315 391,516 Property and equipment, net 194,615 201,675 Deferred income taxes, net 14,851 8,862 Other assets 9,777 11,756 Total assets $738,558 $613,809 Liabilities and Stockholders' equity Current liabilities: Accounts payable $127,733 $119,719 Other current liabilities 106,652 83,889 Deferred income taxes, net 958 4,049 Current portion of long-term debt - 800 Total current liabilities 235,343 208,457 Long-term debt 49,229 99,200 Deferred credits 67,646 73,815 Other liabilities 10,462 7,388 Stockholders' equity 375,878 224,949 Total liabilities and stockholders' equity $738,558 $613,809 (Exhibit 3) Actual and Projected Store Count and Square Footage (Note 1) Actual Fiscal 2009 Total stores Number of Number of Total stores open at stores stores closed open at end beginning opened during during of the Quarter of the quarter the quarter the quarter quarter 1st Quarter 300 12 2 310 2nd Quarter 310 9 0 319 3rd Quarter 319 2 1 320 4th Quarter 320 1 0 321 Actual Fiscal 2009 Reduction of gross square Gross square feet for Total gross feet for stores stores closed Total gross square feet opened or or downsized square feet at beginning expanded during during the at end of Quarter of the quarter the quarter quarter the quarter 1st Quarter 1,864,133 52,185 (8,258) 1,908,060 2nd Quarter 1,908,060 38,166 0 1,946,226 3rd Quarter 1,946,226 10,274 (2,872) 1,953,628 4th Quarter 1,953,628 4,512 0 1,958,140 Projected Fiscal 2010 (Note 2) Total stores Number of Number of Total stores open at stores stores closed open at end beginning opened during during of the Quarter of the quarter the quarter the quarter quarter 1st Quarter 321 5 0 326 2nd Quarter 326 2 1 327 3rd Quarter 327 4 0 331 4th Quarter 331 4 0 335 Projected Fiscal 2010 Reduction of gross square Gross square feet for Total gross feet for stores stores closed Total gross square feet opened or or downsized square feet at beginning expanded during during the at end of Quarter of the quarter the quarter quarter the quarter 1st Quarter 1,958,140 25,168 (615) 1,982,693 2nd Quarter 1,982,693 7,631 (7,822) 1,982,502 3rd Quarter 1,982,502 13,249 0 1,995,751 4th Quarter 1,995,751 24,605 0 2,020,356 Note 1 - Store count and square footage summary excludes three clearance store locations. Note 2 - Projected number of stores opened during Fiscal 2010 by quarter: 1st Quarter - two retail and three factory stores. 2nd Quarter - one retail and one Madewell store. 3rd Quarter - two retail and two Madewell stores. 4th Quarter - one retail, two factory and one Madewell store.
SOURCE J.Crew Group, Inc.