Jeanswear performs well at Jones
Jones Apparel Group, Inc. reported results for the second quarter ended July 3, 2010. Revenues for the second quarter of 2010 were $860 million, as compared with $804 million for the second quarter of 2009.
The Company reported adjusted earnings per share of $0.45 for the second quarter of 2010, as compared with adjusted earnings per share of $0.29 in the same period last year. Results for both periods exclude the impact of acquisition-related charges, the impact of severance and other expenses related to the planned closure of certain Company-operated retail stores, and certain other charges.
As reported under generally accepted accounting principles, the Company reported net income of $0.30 per share for the second quarter of 2010, as compared with net income of $0.15 per share for the same period last year. The 2010 second quarter results include costs and charges of approximately $12 million ($8 million after tax) related to the acquisitions of Stuart Weitzman and Robert Rodriguez and $10 million ($6 million after tax) of other restructuring and strategic review costs.
In the prior year quarter, results included charges of approximately $10 million ($6 million after tax) related to the consent solicitation of noteholders and tender offer and the termination of the revolving credit facility and charges of $8 million ($5 million after tax) related to cost savings initiatives and other items.
Wesley R. Card, Jones Apparel Group Chief Executive Officer, stated: "We are very pleased with our second quarter results and the performance of our core brands over the entire Spring/Summer season. Operating margins were much improved and increased in three of the segments compared with the prior year's quarter. Results in Better Apparel and Footwear and Accessories were particularly notable, reflective of sound execution and aggressive inventory management, as well as strong sell-throughs. Jeanswear also continued to perform well and our vertical retail operations results improved, as we remain on track with our retail improvement plan."
The Company noted that it closed 41 retail locations in the second quarter to end the quarter with 880 locations (which includes acquired Stuart Weitzman locations). Consistent with its plan, the Company anticipates closing an additional 80 unprofitable locations by the end of 2010.
The following notable events have recently occurred:
• completed the acquisition of a 55% interest in Stuart Weitzman Holdings, LLC, a leading designer and marketer of women's salon footwear;
• entered into an exclusive licensing and distribution agreement with G-III Apparel Group, Ltd. for Andrew Marc men's jeanswear; and
• completed an amendment and extension of its existing $650 million senior credit facility.
Cash provided by operations during the six months was $26 million, compared with cash provided by operations of $74 million in the prior year. The current year results reflect higher earnings offset by higher tax payments and an investment in working capital required to fund revenue growth. The Company continues to have no amounts drawn under its $650 million of committed revolving credit facilities.