J. Crew Group, Inc. announced financial results for the three months (second quarter) and six months (first six months) ended August 1, 2009.
Second Quarter highlights: -- Revenues increased 6% to $357.6 million. Store sales(Retail and Factory) increased 7% to $259.1 million, with comparable store sales decreasing 5%. Comparable store sales decreased 0.4% in the second quarter of fiscal 2008. Direct sales (Internet and Phone) increased by 6% to $88.2 million. Direct sales increased 12% to $83.2 million in the second quarter of fiscal 2008.
-- Gross margin increased to 41.2% of revenues from 41.0% of revenues in the second quarter of fiscal 2008.
-- Operating income increased 2% to $32.2 million, or 9.0% of revenues, compared to $31.5 million, or 9.4% of revenues, in the second quarter of fiscal 2008. Operating income in the second quarter of fiscal 2009 includes charges of approximately $2.6 million related to underperforming stores and lease termination actions. Operating income in the second quarter of fiscal 2008 included approximately $3.0 million of costs related to our Direct channel systems upgrades.
-- Net income was $18.6 million, or $0.29 per diluted share, compared to a net income of $18.1 million, or $0.28 per diluted share, in the second quarter of fiscal 2008.
Millard Drexler, J. Crew's Chairman and CEO stated: "We are and have been on a long term mission to be recognized for our quality, style, design and service. This mission puts 'taking care of our customers' front and center in every part of our business -- our products, our service, our store environments and our web site. While we are pleased with our second quarter results, we always have our eye on where our customer is headed and the need to constantly challenge ourselves to be creative and innovative."
First Six Months highlights: -- Revenues increased 4% to $703.3 million. Store sales increased 6% to $499.8 million, with comparable store sales decreasing 5%. Comparable store sales increased 1% in the first six months of fiscal 2008. Direct sales decreased 0.3% to $183.5 million. Direct sales increased 14% to $184.1 million in the first six months of fiscal 2008.
-- Gross margin decreased to 41.7% of revenues from 44.0% of revenues in the first six months of fiscal 2008. The decrease in gross margin is primarily related to increased markdowns as a result of beginning of fiscal year inventory levels.
-- Operating income decreased 20% to $67.5 million, or 9.6% of revenues, compared to $84.6 million, or 12.5% of revenues, in the first six months of fiscal 2008.Operating income in the first six months of fiscal 2009 includes charges of approximately $4.9 million related to our workforce reduction, underperforming stores and lease termination actions.Operating income in the first six months of fiscal 2008 included approximately $3.0 million of costs related to our Direct channel systems upgrades.