Revenues rise 22% at apparel retailer J.Crew in H1 FY'12

On March 7, 2011, J.Crew was acquired by investment funds affiliated with TPG Capital, L.P. and Leonard Green & Partners, L.P.  Although the Company continued as the same legal entity after the acquisition, last year's financial statements were prepared for the following periods: (i) March 8, 2011 to July 30, 2011 (Successor) and (ii) January 30, 2011 to March 7, 2011 (Predecessor).

Second Quarter highlights:

• Revenues increased 21% to $525.5 million, with comparable company sales increasing 14%.  Comparable company sales increased 3% in the second quarter last year.  Store sales increased 24% to $384.0 million.  Store sales increased 5% in the second quarter last year.  Direct sales increased 16% to $134.0 million following an increase of 13% in the second quarter last year. 
• Gross margin increased to 45.1% from 36.5% in the second quarter last year.  Last year included amortization of inventory step-up from purchase accounting of $22 million.     
• Selling, general and administrative expenses increased to $174.7 million, or 33.2% of revenues, from $146.4 million, or 33.7% of revenues, in the second quarter last year.  This year reflects additional share-based and incentive compensation of $10 million.  Last year included transaction-related litigation costs of $6.5 million.
• Operating income increased $49.8 million to $62.1 million, or 11.8% of revenues, compared to $12.3 million, or 2.8% of revenues, in the second quarter last year.  Operating income last year was negatively impacted by amortization of inventory step-up and transaction-related litigation costs noted above.        
• Net income was $22.0 million compared with a net loss of $10.5 million in the second quarter last year. The net loss last year included the after-tax effect of the amortization of inventory step-up and transaction-related litigation costs noted above.    
• Adjusted EBITDA increased $24.5 million to $88.7 million compared to $64.2 million in the second quarter last year.  .

First Half highlights:

• Revenues increased 22% to $1,029.0 million, with comparable company sales increasing 15%.  Comparable company sales were flat in the first half last year.  Store sales increased 25% to $738.0 million.  Store sales increased 1% in the first half last year.  Direct sales increased 17% to $277.4 million following an increase of 9% in the first half last year.  
• Gross margin increased to 46.3% from 43.1% in the first half last year.