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Jones performs well against challenging retail landscape

10
Feb '11
The Jones Group Inc reported results for the fourth quarter and year ended December 31, 2010. Revenues for the fourth quarter of 2010 were $874 million, as compared with $777 million for the fourth quarter of 2009. Revenues for the full year 2010 were $3,643 million, as compared with $3,327 million for the full year 2009.

The fourth quarter increase in revenues of 12.5% was as anticipated and reflective of increases in each business segment and the inclusion of the Stuart Weitzman business, which was acquired in June 2010.

The Company reported adjusted earnings per share of $0.04 for the fourth quarter of 2010, as compared with adjusted earnings per share of $0.11 for the same period last year. Adjusted earnings per share from continuing operations on a full year basis were $1.51 in 2010 as compared with $1.14 per share in the prior year.

The adjusted results exclude charges related to the impairments of certain intangible assets, the impact of severance and other costs related to restructuring activities, certain acquisition-related costs and other costs not considered relevant for period-over-period comparisons.

As reported under generally accepted accounting principles ("GAAP"), the Company reported a fourth quarter loss per share of ($0.47) and ($1.53) for 2010 and 2009, respectively. On a full year basis, the Company reported GAAP earnings of $0.62 per share for 2010 as compared with a loss of ($1.02) per share for 2009. The results for both periods include non-cash impairment charges relating to certain trademarks and, in 2009, also for goodwill.

The non-cash impairment charges for 2010 of $38 million ($24 million after tax) were primarily related to our Wholesale Jeanswear business whereas the charges for 2009 of approximately $150 million ($138 million after tax) were related to our Retail, Wholesale Jeanswear and Wholesale Footwear and Accessories businesses. Such charges in both periods were a result of the Company's required annual testing under GAAP.

Wesley R. Card, The Jones Group Chief Executive Officer, stated: "While the fourth quarter had its challenges, we had solid sales growth in our core brands and performed well against a challenging retail landscape. Jones' portfolio is powerful, and we are consistently enhancing our brands' appeal and performance, as reflected in our topline results.

“In addition, our newly acquired Stuart Weitzman business had strong results for the quarter and is very well positioned for further growth in 2011. As we noted in our preliminary earnings announcement, margins for the fourth quarter were impacted by a more promotional environment than anticipated and a softer market for excess inventory, coupled with an anticipated rise in product costs."

Cash provided by operating activities during 2010 was $141 million, compared with $349 million in 2009. The current year results reflect higher earnings offset by an investment in working capital required to fund revenue growth and higher tax payments. The Company had $200 million in cash and no amounts drawn under its $650 million of committed revolving credit facilities.


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