J. Crew CEO pleased with first quarter results

28 May '10

3 min read

J. Crew Group, Inc. announced financial results for the three months ended May 1, 2010.

First quarter highlights:

• Revenues increased 20% to $413.9 million. Store sales increased 20% to $290.0 million, with comparable store sales increasing 15%. Comparable store sales decreased by 5% in the first quarter of fiscal 2009. Direct sales (Internet and Phone) increased 20% to $114.4 million. Direct sales decreased by 6% to $95.4 million in the first quarter of fiscal 2009.
• Gross margin increased to 49.0% of revenues from 42.2% of revenues in the first quarter of fiscal 2009. The increase in gross margin is primarily related to decreased markdowns and promotional selling in the first quarter of 2010 compared to the first quarter of 2009.
• Operating income increased 113.8% to $75.4 million, or 18.2% of revenues, compared with operating income of $35.3 million, or 10.2% of revenues, in the first quarter of fiscal 2009.
• Net income was $44.7 million, or $0.68 per diluted share. Net income was $20.4 million, or $0.32 per diluted share, in the first quarter of fiscal 2009.

Millard Drexler, J. Crew's Chairman and CEO stated: "We are very pleased with our first quarter results. We are and will continue to be focused on our mission - to innovate in our design, style, quality and customer service and to invest in our business, our associates and our customers for the long term."

Balance Sheet highlights as of May 1, 2010

• Cash and cash equivalents were $332.3 million at the end of the first quarter compared to $154.6 million at the end of the first quarter in the prior year.
• Inventories at the end of the first quarter were $193.1 million, compared to $193.9 million at the end of the first quarter of fiscal 2009. Inventory per square foot decreased 3.9% as compared to the end of the first quarter of fiscal 2009.

Guidance
The Company issued its initial guidance for the second quarter and updated its guidance for fiscal 2010. The Company currently expects second quarter fiscal 2010 diluted earnings per share in the range of $0.40 to $0.45 and fiscal 2010 diluted earnings per share in the range of $2.35 to $2.45, as compared to its previous guidance range for fiscal 2010 of $2.20 to $2.30 and fiscal 2009 diluted earnings per share of $1.91.

J. Crew Group, Inc. is a nationally recognized multi-channel retailer of women's, men's and children's apparel, shoes and accessories. As of May 27, 2010, the Company operates 246 retail stores (including 220 J.Crew retail stores, 9 crewcuts and 17 Madewell stores), the J. Crew catalog business, jcrew.com, madewell.com, and 81 factory outlet stores.

J. Crew Group Inc

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