Home / Knowledge / News / Apparel/Garments / Q2FY15 net income plunges 38% at apparel retailer J Crew
Q2FY15 net income plunges 38% at apparel retailer J Crew
08
Sep '14
Although revenue rose 12% year-on-year, net income at multi-brand retailer of women's, men's and children's apparel J.Crew Group, Inc. plunged 38.28% in the second fiscal quarter of 2014.

Net income dived 38.28% to $17.5 million in the second quarter of 2014 from $10.8 million in the second quarter of 2013.

Revenues at the garment retailer increased 12% from a year earlier quarter to $627.2 million, with comparable company sales increasing 4% year-on-year.

J.Crew said retail store sales increased 11% from the prior year quarter to $443.5 million, while direct sales surged 14% from same quarter of 2013 to $173.6 million.

However, gross margin declined to 37.7% in second quarter of 2014 compared to 41.1% in the second quarter last year.

Selling, general and administrative expenses (SG&A) rose higher to $200.7 million, or 32.0% of revenues, compared to $174.2 million, or 31.2% of revenues in the second quarter last year.

In the second quarter of 2014, operating income also fell to $36.0 million, or 5.7% of revenues, compared to $55.8 million, or 10.0% of revenues, in the second quarter of 2013.

Adjusted EBITDA too decreased sharply to $67.6 million in second quarter of 2014 versus $83.0 million in the prior year second quarter.

Cash and cash equivalents were down to $74 million at the end of second quarter of 2014 against $99 million at the end of the second quarter last year.

J.Crew said this firstly reflects $29 million paid for refinancing a senior secured term loan and redemption of its senior unsecured notes and secondly from a dividend to service debt of $19 million in the first quarter of fiscal 2014.

Total debt at end of second quarter of 2014 stood at $1,556 million, which J.Crew explained reflects the new senior secured term loan which matures in 2021.

Inventories at the end of 2014 second quarter reached $395 million up from $321 million at the end of 2013 second quarter. The retailer said inventories and inventories per square foot increased 23% and 12% year-on-year, respectively.

J.Crew Group, Inc. a multi-brand retailer of women's, men's and children's apparel, shoes and accessories operates 271 J.Crew retail stores, 76 Madewell stores, jcrew.com, jcrewfactory.com, the J.Crew catalog, madewell.com, the Madewell catalog, and 131 factory stores. (AR)

Fibre2fashion News Desk - India

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