The Jones Group Inc. reported results for the second quarter ended June 30, 2012. Revenues for the second quarter of 2012 were $855 million, as compared with $887 million for the second quarter of 2011.
The Company reported adjusted earnings per share of $0.22 for the second quarter of 2012, as compared with adjusted earnings per share of $0.33 for the same period last year. The adjusted results exclude charges related to the impact of severance, asset impairments in retail locations to be closed and other costs related to restructuring activities, certain acquisition-related costs and other costs not considered relevant for period-over-period comparisons.
The Company reported second quarter earnings per share of $0.10 in 2012 and $0.06 per share in 2011. The 2012 and 2011 second quarter results include, among other items, costs and charges of approximately $15 million ($9 million after tax) and $37 million ($23 million after tax), respectively, related to lease liabilities of unused facilities, impairments and other costs relating to the planned closure of certain Company-operated retail stores, as well as other restructuring and cost savings initiatives. Such amounts also include, for both periods, adjustments to the future payment liabilities associated with the Stuart Weitzman and Robert Rodriguez acquisitions.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: "We are pleased with the results we achieved in the second quarter, particularly our improved gross margin, which exceeded expectations. Our gross margin improvement of 180 basis points was the result of the inclusion of Kurt Geiger for a full quarter, improvement in many segments as a result of conservative inventory planning and control."
The Company ended the quarter with $277 million in cash and generated cash from operating activities during the six months of $124 million, compared with $66 million in the prior year period. The current year results reflect a lower level of required investment in working capital, somewhat offset by lower earnings. At June 30, 2012, the Company had no amounts drawn under its $650 million of committed revolving credit facilities.
John T. McClain, The Jones Group Chief Financial Officer, commented: "Our financial position remains strong. We ended the quarter with $277 million in cash and our revolver undrawn. Our approach to inventory commitments continues to be conservative, and we continue to emphasize tight expense control. We believe these actions and our plans will enable us to continue to maintain a strong balance sheet."
Mr. Card concluded: "We believe we are well positioned for the second half of the year as we continue to execute on our strategic pillars. We have received very positive reactions from wholesale customers to our enhanced products across our brands that will ship in Fall and are confident that this will translate into improved retail performance and ultimately increased sales."
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