Jones tightens 2011 buy plans to more conservative approach
The Jones Group Inc released its preliminary adjusted and GAAP results for fiscal year 2010. The Company expects to report 2010 full year adjusted earnings per share of approximately $1.50, compared with 2009 adjusted earnings per share of $1.14. For the fourth quarter of 2010, the Company expects to report adjusted earnings per share of approximately $0.02, compared with a 2009 fourth quarter adjusted earnings per share of $0.11.
Adjusted earnings per share excludes the effects of impairment and restructuring charges and other items not considered relevant for period over period comparisons (see reconciliation of adjusted earnings in the attached schedule). As reported under generally accepted accounting principles, the Company expects to report full year 2010 earnings per share of approximately $0.62, compared with 2009 full year loss per share of $(1.02) and a 2010 fourth quarter loss per share of approximately $(0.47), compared with a 2009 fourth quarter loss per share of $(1.53).
The Company expects to report full year 2010 adjusted and GAAP net revenues of approximately $3.64 billion, compared with full year 2009 adjusted and GAAP net revenues of approximately $3.33 billion. Additionally, the Company expects to report full year 2010 adjusted operating income of approximately $251 million and GAAP operating income of approximately $148 million, compared with full year 2009 adjusted and GAAP operating income (loss) of $202 million and $(12) million, respectively.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: "Fourth quarter sales in our wholesale and company-owned channels were strong, consistent with the industry, and within our anticipated range. While our core brands continued to perform well, the retail environment was more promotional than anticipated, particularly in footwear, which impacted our gross margins. Margins were further impacted by the effect of continued rising costs and a softer market for excess inventory. As a result, we expect gross margins for the full year 2010 to approximate 2009 gross margins and fourth quarter 2010 gross margins to be approximately 340 basis points below those of the 2009 fourth quarter."
John T. McClain, The Jones Group Chief Financial Officer, commented: "Planned inventory positions for the back half of 2010 were influenced by the strong sales trends that existed in the front half of the year. As sales trends slowed in the back half, we needed to sell more into the off-price channel to clear that inventory. We are now well positioned with our inventory and we have tightened our 2011 buy plans to a more conservative approach."
Mr. Card continued: "The performance of our brands has been consistently strong, even in a challenging environment, and for 2011, we believe that our brands are positioned to achieve net revenue growth in mid-single digits. That said, the strength in consumer spending and acceptance of price increases in 2011 remain uncertain.