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J. Crew Group Inc. Reports Operating Results (10-Q)

December 07, 2009 | About:
10qk

10qk

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J. Crew Group Inc. (JCG) filed Quarterly Report for the period ended 2009-10-31.

J.Crew Group, Inc. operates as a multi-channel specialty retailer in the United States. It designs, contracts for the manufacture of, markets, and distributes women's, men's, and children's apparel; shoes; and accessories under the J.Crew brand name. The company's products include a range of apparel and accessories, including wedding and special occasion attire, weekend clothes, swimwear, loungewear, outerwear, shoes, bags, belts, hair accessories, and jewelry. It serves customers through its retail and factory stores, as well as through catalogs and Internet. The company is headquartered in New York, New York. J. Crew Group Inc. has a market cap of $2.71 billion; its shares were traded at around $42.92 with a P/E ratio of 39 and P/S ratio of 1.9.

Highlight of Business Operations:

Stores sales increased $49.2 million, or 19.6%, to $300.1 million in the third quarter of fiscal 2009 from $250.9 million in the third quarter of fiscal 2008. Comparable store sales increased $20.6 million, or 8.4%, to $266.6 million in the third quarter of fiscal 2009 from $245.9 million last year. Non-comparable store sales were $33.5 million in the third quarter of fiscal 2009 due primarily to sales from stores opened subsequent to the third quarter of last year. Non-comparable store sales will decline as we slow the rate of new store openings.

Interest expense, net of interest income, increased $0.5 million to $1.1 million in the third quarter of fiscal 2009 from $0.6 million in the third quarter of fiscal 2008 primarily due to $0.7 million of interest on refundable income taxes recognized last year, offset by declining interest rates.

Net income increased $24.9 million to $43.9 million in the third quarter of fiscal 2009 from $19.0 million in the third quarter of fiscal 2008. This increase was due to a $49.5 million increase in gross profit, offset by a $17.4 million increase in the provision for income taxes, a $6.9 million increase in selling, general and administrative expenses, and a $0.5 million increase in interest expense.

Stores sales increased $77.6 million, or 10.7%, to $799.9 million in the first nine months of fiscal 2009 from $722.3 million in the first nine months of fiscal 2008. Comparable store sales decreased $2.6 million, or 0.4%, to $702.3 million in the first nine months of fiscal 2009 from $704.9 million last year. Non-comparable store sales were $97.6 million in the first nine months of fiscal 2009 due primarily to sales from stores opened subsequent to the third quarter of last year. Non-comparable store sales will decline as we slow the rate of new store openings.

Direct sales increased $3.1 million, or 1.1%, to $289.0 million in the first nine months of fiscal 2009 from $285.9 million in the first nine months of fiscal 2008. During the third quarter of fiscal 2008, Direct sales were negatively impacted by certain systems upgrades which affected our ability to capture, process, ship and service customer orders.

Net income increased $15.2 million to $82.9 million in the first nine months of fiscal 2009 from $67.7 million in the first nine months of fiscal 2008. This increase was due to a $45.1 million increase in gross profit and a $1.2 million decrease in interest expense, offset by a $19.5 million increase in selling, general and administrative expenses and a $11.4 million increase in the provision for income taxes.

Read the The complete ReportJCG is in the portfolios of Ron Baron of Baron Funds, Jeremy Grantham of GMO LLC.

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