J.Crew Group Reports First Quarter Operating Income Of $23 Million Compared To Loss Of $3 Million In 2004
Acting Chief Financial Officer
Owen Blicksilver PR
J.CREW GROUP REPORTS FIRST QUARTER OPERATING INCOME OF $23 MILLION COMPARED TO LOSS OF $3 MILLION IN 2004
NEW YORK (June 9, 2005) - J. Crew announced today that its operating income for the thirteen weeks ended April 30, 2005 was $23 million compared to an operating loss of $3 million last year, as the Company continues to benefit from the revitalization of the J. Crew brand.
Millard Drexler, Chairman and CEO, said, "We are pleased with our first quarter results with a comp store sales increase of 37% and significant growth in our Direct business. Our continuing focus on quality, style and design, along with endless attention to our customers' needs, is reflected in J.Crew's performance. I might add that the scarcity of our merchandise in last year's first quarter also helped contribute to this quarter's strong comp performance."
Selling, general and administrative expenses during the quarter were $74 million, or 35% of revenues, compared to $64 million, or 44% of revenues in the prior year. The decrease as a percentage of revenues was driven primarily by leverage on fixed operating expenses due to the significant increase in net sales. Net income for the first quarter was $5 million compared to a net loss of $24 million in the prior year.
Consolidated revenues for the first quarter increased 45% to $211 million from $146 million in the comparable period last year. Retail net sales (including Factory) increased by 40% to $146 million from $104 million last year due primarily to a comparable store sales increase of 37%. Net sales of the Direct business (Internet and catalog) increased by 59% to $59 million as compared to $37 million.
The operating results for the quarter reflect a gross margin increase to 46% in 2005 from 42% in 2004 due to higher full price selling and leverage on fixed buying and occupancy costs.
Selling, general and administrative expenses during the quarter were $74 million, or 35% of revenues, compared to $64 million, or 44% of revenues in the prior year. The decrease as a percentage of revenues was driven primarily by leverage on fixed operating expenses due to the significant increase in revenues.
Net income for the first quarter was $5 million compared to a net loss of $24 million in the prior year.
Inventory at April 30, 2005 was $105 million, up 24% from the comparable period last year. The increase in inventories is consistent with our strong sales performance and a conservative inventory strategy in last year's first quarter. There were no outstanding borrowings under the Company's working capital facility during the quarter.
First Quarter Conference Call
The Company's first quarter investor conference call will be held tomorrow, June 10, 2005 at 11 a.m. eastern time. The event will be available through an audio webcast at www.jcrew.com (click on "Help" and "Investor Relations") and www.companyboardroom.com. A replay of the call will be archived on those websites and will also be available by telephone through June 17, 2005 at (888) 286-8010, reference #45237865.
J. Crew Group, Inc. is a leading retailer of men's and women's apparel, shoes and accessories. The Company operates 157 retail stores, the J. Crew catalog business, jcrew.com, and 43 factory outlet stores.