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