UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 29, 2008

 

 

 

Commission File Number		Registrant, State of Incorporation Address and Telephone Number		I.R.S. Employer Identification No.
333-42427		J.CREW GROUP, INC. (Incorporated in Delaware)   770 Broadway New York, New York 10003 Telephone: (212) 209-2500		22-2894486

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition.

On May 29, 2008, J.Crew Group, Inc. issued a press release announcing the Company’s financial results for the first quarter ended May 3, 2008. The Company is furnishing a copy of the press release hereto as Exhibit 99.1.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Press Release issued by J.Crew Group, Inc. on May 29, 2008.

The information in this Current Report is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), nor shall such information be deemed incorporated by reference into any filing under the Act, or the Exchange Act, except as expressly stated by specific reference in such filing.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 29, 2008

 

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EXHIBIT 99.1

 

				Company Contact: James Scully Chief Financial Officer (212) 209-8040   Investor Contact: Allison Malkin/Chad Jacobs/Joe Teklits Integrated Corporate Relations (203) 682-8200

J. CREW GROUP, INC. ANNOUNCES FIRST QUARTER FISCAL 2008 RESULTS

First Quarter Revenues Rise 15% to $340.6 million

First Quarter Operating Income Increases 20% to $53.0 million

Revises Guidance for Fiscal 2008

New York, NY – May 29, 2008 – J. Crew Group, Inc. [NYSE:JCG] today announced financial results for the three months ended May 3, 2008 (first quarter fiscal 2008).

First quarter highlights:

 

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Revenues increased 15% to $340.6 million. Store sales (Retail and Factory) increased 14% to $229.1 million, with comparable store sales increasing 2%. Comparable store sales increased 8% in the first quarter of fiscal 2007. Direct sales (Internet and Catalog) rose by 17% to $100.9 million. Direct sales increased 31% to $86.6 million in the first quarter of fiscal 2007.

 

•

Gross margin increased to 46.9% of revenues from 46.6% of revenues in the first quarter of fiscal 2007.

 

•

Operating income increased 20% to $53.0 million, or 15.6% of revenues, compared to $44.4 million, or 14.9% of revenues, in the first quarter of fiscal 2007.

 

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Net income was $30.5 million, or $0.48 per diluted share, compared to $24.6 million, or $0.39 per diluted share, in the first quarter of fiscal 2007.

Millard Drexler, J. Crew’s Chairman and CEO stated: “I am pleased with our first quarter results. We are on a mission to be the best we can be on quality, style, design and service for our customers. We are dedicated to continuing to always build and invest in our company for the long term.”

Guidance

The Company issued its initial guidance for the second quarter and updated its guidance for fiscal 2008. The Company currently expects second quarter diluted earnings per share in the range of $0.31 to $0.33. For fiscal 2008, the Company currently expects diluted earnings per share in the range of $1.70 to $1.75, as compared to its previous guidance range of $1.85 to $1.87 and fiscal 2007 diluted earnings per share of $1.52. The Company’s revised expectations for fiscal 2008 include comparable store sales growth in the range of flat to low single-digits, Direct sales growth in the high single-digits and net square footage expansion of approximately 11%.

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Balance Sheet highlights as of May 3, 2008

 

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Inventories at the end of the quarter were $174.5 million, reflecting the impact of 34 net stores opened since the first quarter of fiscal 2007 and 7 stores opened since the end of fiscal 2007 and the timing of inventory receipts as compared to last year’s first quarter.

 

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Long-term debt was reduced to $100.0 million, which reflects the Company’s voluntary principal payments of $25.0 million during the first three months of fiscal 2008.

Conference Call Information

A conference call to discuss first quarter results is scheduled for today, May 29, 2008, 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 www.jcrew.com. A replay of this call will be available until June 6, 2008 and can be accessed by dialing (877) 660-6853 and entering account number 3055 and conference ID number 286170.

About J. Crew Group, Inc.

J. Crew Group, Inc. is a nationally recognized multi-channel retailer of women’s and men’s apparel, shoes and accessories. As of May 29, 2008, the Company operates 206 retail stores (including 4 crewcuts and 8 Madewell stores), the J. Crew catalog business, jcrew.com, and 65 factory outlet stores. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company’s website 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, our ability to compete with other retailers, the performance of the Company’s products within the prevailing retail environment, our strategy and expansion plans, 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 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.

 

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Exhibit (1)

J. Crew Group, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

(In thousands, except percentages and share data)		Three Months Ended May 3, 2008				Three Months Ended May 5, 2007
Net sales
Stores		$	229,109			$	201,009
Direct			100,934				86,570
			330,043				287,579
Other			10,536				9,733
Total Revenues			340,579				297,312
Costs of goods sold, buying and occupancy costs			180,692				158,774
Gross Profit			159,887				138,538
As a percent of revenues			46.9	%			46.6	%
Selling, general and administrative expenses			106,841				94,165
As a percent of revenues			31.4	%			31.7	%
Operating income			53,046				44,373
As a percent of revenues			15.6	%			14.9	%
Interest expense, net			2,370				3,442
Income before income taxes			50,676				40,931
Provision for income taxes			20,175				16,282
Net income		$	30,501			$	24,649
Income per share:
Basic		$	0.50			$	0.41
Diluted		$	0.48			$	0.39
Weighted average shares outstanding:
Basic			61,192				59,731
Diluted			64,076				63,248

 

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Exhibit (2)

J. Crew Group, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

(In thousands)		May 3, 2008			February 2, 2008			May 5, 2007
Assets
Current assets:
Cash and cash equivalents		$	121,532		$	131,510		$	81,321
Inventories			174,493			158,525			144,759
Prepaid expenses and other current assets			32,850			33,293			37,242
Refundable income taxes			8,600			9,794			8,600
Total current assets			337,475			333,122			271,922
Property and equipment, net			174,438			168,292			125,208
Other assets			33,299			34,182			31,792
Total assets		$	545,212		$	535,596		$	428,922
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable		$	95,657		$	101,277		$	66,358
Other current liabilities			77,816			93,796			65,883
Income taxes payable			6,669			—			5,675
Total current liabilities			180,142			195,073			137,916
Long-term debt			100,000			125,000			175,000
Deferred credits			68,388			67,600			64,489
Other liabilities			7,715			7,601			6,435
Stockholders’ equity			188,967			140,322			45,082
Total liabilities and stockholders’ equity		$	545,212		$	535,596		$	428,922

 

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Exhibit (3)

Actual and Projected Store Count and Square Footage

Fiscal 2008

 

Quarter		Total stores open at beginning of the quarter		Number of stores opened during the quarter		Number of stores closed during the quarter		Total stores open at end of the quarter
1st Quarter (Actual)		260		7		0		267
2nd Quarter (Projected)		267		8		0		275
3rd Quarter (Projected)		275		14		0		289
4th Quarter (Projected)		289		14		2		301

Fiscal 2008

 

Quarter		Total gross square feet at beginning of the quarter		Gross square feet for stores opened or expanded during the quarter		Reduction of gross square feet for stores closed or downsized during the quarter			Total gross square feet at end of the quarter
1st Quarter (Actual)		1,688,016		38,685		(2,261	)		1,724,440
2nd Quarter (Projected)		1,724,440		36,313		(7,899	)		1,752,854
3rd Quarter (Projected)		1,752,854		61,895		(4,304	)		1,810,445
4th Quarter (Projected)		1,810,445		71,406		(12,181	)		1,869,670

 

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