J.Crew Group Q2 FY'13 revenues up 6%

Second Quarter highlights:

-Revenues increased 6% to $559.1 million, with comparable company sales decreasing 1%.  When realigning last year to be consistent with the current year retail calendar, comparable company sales increased 1% on top of an increase of 14% in the second quarter last year.  Store sales increased 4% to $399.1 million on top of an increase of 24% in the second quarter last year.  Direct sales increased 13% to $151.8 million following an increase of 16% in the second quarter last year.  

-Gross margin decreased to 41.1% from 45.1% in the second quarter last year.       

-Selling, general and administrative expenses were $174.2 million, or 31.2% of revenues, compared to $174.7 million, or 33.2% of revenues, in the second quarter last year. This year reflects a decrease of $12 million in share-based and incentive compensation.                    

-Operating income was $55.8 million, or 10.0% of revenues, compared to $62.1 million, or 11.8% of revenues, in the second quarter last year. 

-Net income was $17.5 million compared to $22.0 million in the second quarter last year. 

-Adjusted EBITDA was $83.0 million compared to $88.7 million in the second quarter last year.  An explanation of the manner in which we use adjusted EBITDA and an associated reconciliation to GAAP measures are included in Exhibit (3).    

Balance Sheet highlights:   

-Cash and cash equivalents decreased to $98.8 million from $213.4 million at the end of the second quarter last year, which reflects a special dividend of $197.5 million that was paid in the fourth quarter last year.

-Total debt was $1,573 million, consisting of the senior secured term loan of $1,173 million, maturing in 2018, and the senior unsecured notes of $400 million, maturing in 2019; compared to $1,588 million at the end of the second quarter last year. 

-Inventories were $321.2 million compared to $282.8 million at the end of the second quarter last year.  Inventories and inventories per square foot increased 14% and 3%, respectively.

About J.Crew Group, Inc.

J.Crew Group, Inc. is a nationally recognized multi-channel retailer of women's, men's and children's apparel, shoes and accessories.  As of September 11, 2013, the Company operates 314 retail stores jcrew.com, jcrewfactory.com, the J.Crew catalog, madewell.com, the Madewell catalog, and 114 factory stores.

J.Crew Group