Jones Apparel gross profit margin up in Q3

31 Oct '08

4 min read

Cash provided by continuing operating activities for the nine-month period during 2008 improved by $120 million when compared with the same period in 2007. The improvement in cash flow was largely driven by improved working capital management, the receipt of an income tax refund during 2008 and the absence of the final payment associated with exiting the Polo Jeans Company business.

The Company has no amounts drawn under its $1.25 billion of committed revolving credit facilities and expects to end the fiscal year with approximately $300 million in cash.

John T. McClain, Jones Apparel Group Chief Financial Officer, commented: "We ended the quarter with $200 million in cash, an increase of $90 million compared with last year. We continue to maintain a strong financial position. Our revolver continues to be undrawn, and total debt balances remain unchanged at approximately $780 million. We will continue to manage our cash through cautious inventory purchases and controlled spending as we move through the remainder of 2008 and into 2009."

Mr. McClain continued: "As noted in our guidance earlier this month, we are expecting a very promotional fourth quarter as we and our retail customers aggressively work to control inventory balances. We anticipate that our 2008 full year adjusted earnings per share from continuing operations will be within a range of $0.93 to $0.98, compared with 2007 adjusted earnings per share from continuing operations of $1.26."

Mr. Card concluded: "In the face of a very uncertain retail and economic climate, we remain committed to our strategy, bolstered by appropriate near- term adaptations to deal with current conditions."

"These steps include maintaining very careful management of working capital and inventory, a significant slowing of capital expenditures, comprehensively reviewing expenses and overhead, and taking a cautious approach to new projects. We believe that these actions, coupled with the commitment of our experienced management team, will allow us to weather these conditions and emerge as a stronger and leaner Company when the economy turns upward."

Jones Apparel Group Inc

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