J.Crew Group, Inc. Announces Fourth Quarter and Fiscal 2009 Results
Fourth Quarter Revenues Rise 19% to $460.6 million
Fourth Quarter Diluted EPS of $0.61
Fiscal 2009 Diluted EPS of $1.91
NEW YORK, March 9 /PRNewswire-FirstCall/ -- J.Crew Group, Inc. (NYSE: JCG) today announced financial results for the three months (fourth quarter) and fiscal year ended January 30, 2010 (fiscal 2009).
Fourth Quarter highlights:
- Revenues increased 19% to $460.6 million. Store sales increased 23% to $311.1 million, with comparable store sales increasing 17%. Comparable store sales decreased 13% in the fourth quarter of fiscal 2008. Direct sales (Internet and Phone) increased 13% to $139.2 million. Direct sales decreased 2% to $123.0 million in the fourth quarter of fiscal 2008.
- Gross margin increased to 43.9% of revenues from 27.6% of revenues in the fourth quarter of fiscal 2008. The increase in gross margin is primarily due to decreased markdowns and promotional selling in the fourth quarter of 2009 compared to 2008.
- Operating income increased to $68.6 million, or 14.9% of revenues, compared with an operating loss of $20.4 million, or 5.3% of revenues, in the fourth quarter of fiscal 2008.
- Net income in the fourth quarter of fiscal 2009 was $40.4 million, or $0.61 per diluted share. Net loss was $13.5 million, or $0.22 per diluted share, in the fourth quarter of fiscal 2008.
Millard Drexler, J.Crew's Chairman and CEO stated: "We are extremely pleased with all we achieved in 2009. Our bar has been set high and it is our continued mission to be creative, to be innovative, and to emotionally connect with our customers."
Fiscal 2009 highlights:
- Revenues increased 11% to $1,578.0 million. Store sales increased 14% to $1,110.9 million, with comparable store sales increasing 4%. Comparable store sales decreased 4% in fiscal 2008. Direct sales increased 5% to $428.2 million. Direct sales increased 8% to $408.9 million in fiscal 2008.
- Gross margin increased to 44.1% of revenues from 38.9% of revenues in fiscal 2008.
- Operating income increased to $211.3 million, or 13.4% of revenues, compared to $96.7 million, or 6.8% of revenues, in fiscal 2008.
- Net income for fiscal 2009 was $123.4 million, or $1.91 per diluted share. Net income was $54.1 million, or $0.85 per diluted share, in fiscal 2008.
Balance Sheet highlights as of January 30, 2010:
- Cash and cash equivalents were $298.1 million at the end of the fourth quarter and after a voluntary principal payment of debt of $50 million made during fiscal 2009. Cash and cash equivalents were $146.4 million at the end of fiscal 2008.
- Inventories at the end of the fourth quarter were $190.2 million, compared to $187.0 million at the end of the fourth quarter of fiscal 2008. Inventory per square foot at the end of fiscal 2009 decreased 3%, compared to the end of fiscal 2008.
Guidance
The Company currently expects first quarter fiscal 2010 diluted earnings per share in the range of $0.48 to $0.53 and fiscal 2010 diluted earnings per share in the range of $2.20 to $2.30.
Conference Call Information
A conference call to discuss fourth quarter results is scheduled for today, March 9, 2010, at 4:30 PM Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 407-0784 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at www.jcrew.com. A replay of this call will be available until March 16, 2010 and can be accessed by dialing (877) 660-6853 and entering account number 3055 and conference ID number 345777.
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 March 9, 2010, the Company operates 244 retail stores (including 218 J.Crew retail stores, 9 Crewcuts and 17 Madewell stores), the J.Crew catalog business, jcrew.com, and 79 factory outlet stores. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company's website www.jcrew.com.
Forward-Looking Statements:
Certain statements herein are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including the strength of the economy, changes in the overall level of consumer spending or preferences in apparel, the performance of the Company's products within the prevailing retail environment, trade restrictions, political or financial instability in countries where the Company's goods are manufactured, postal rate increases, paper and printing costs, availability of suitable store locations at appropriate terms and other factors which are set forth in the Company's Form 10-K and in all filings with the SEC made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Exhibit (1)
J.Crew Group, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, Three Three Fiscal Fiscal
except Months Months Year Year
percentages Ended Ended Ended Ended
and per share January January January January
amounts) 30, 2010 31, 2009 30, 2010 31, 2009
Net sales
Stores $311,061 $252,026 $1,110,932 $974,284
Direct 139,174 122,957 428,186 408,916
450,235 374,983 1,539,118 1,383,200
Other 10,374 13,054 38,924 44,770
Total Revenues 460,609 388,037 1,578,042 1,427,970
Costs of goods
sold, buying
and occupancy
costs 258,542 281,101 882,385 872,547
Gross Profit 202,067 106,936 695,657 555,423
As a
percent
of revenues 43.9% 27.6% 44.1% 38.9%
Selling,
general and
administrative
expenses 133,471 127,378 484,396 458,738
As a
percent
of revenues 29.0% 32.8% 30.7% 32.1%
Operating income
(loss) 68,596 (20,442) 211,261 96,685
As a
percent
of revenues 14.9% (5.3%) 13.4% 6.8%
Interest expense,
net 2,177 1,570 5,384 5,940
Income (loss)
before income
taxes 66,419 (22,012) 205,877 90,745
Provision
(benefit)
for income
taxes 25,983 (8,463) 82,517 36,628
Net income
(loss) $40,436 $(13,549) $123,360 $54,117
Income (loss)
per share:
Basic $0.64 ($0.22) $1.97 $0.88
Diluted $0.61 ($0.22) $1.91 $0.85
Weighted average
shares
outstanding:
Basic 63,085 61,991 62,583 61,687
Diluted 65,882 61,991 64,714 64,027
Exhibit (2)
J.Crew Group, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
January 30, January 31,
(In thousands) 2010 2009
Assets
Current assets:
Cash and cash equivalents $298,107 $146,430
Inventories 190,231 187,044
Prepaid expenses and other
current assets 29,522 34,926
Prepaid income taxes 1,455 23,116
Total current assets 519,315 391,516
Property and equipment, net 194,615 201,675
Deferred income taxes, net 14,851 8,862
Other assets 9,777 11,756
Total assets $738,558 $613,809
Liabilities and Stockholders'
equity
Current liabilities:
Accounts payable $127,733 $119,719
Other current liabilities 106,652 83,889
Deferred income taxes, net 958 4,049
Current portion of long-term
debt - 800
Total current liabilities 235,343 208,457
Long-term debt 49,229 99,200
Deferred credits 67,646 73,815
Other liabilities 10,462 7,388
Stockholders' equity 375,878 224,949
Total liabilities and
stockholders' equity $738,558 $613,809
(Exhibit 3)
Actual and Projected Store Count and Square Footage (Note 1)
Actual Fiscal 2009
Total stores Number of Number of Total stores
open at stores stores closed open at end
beginning opened during during of the
Quarter of the quarter the quarter the quarter quarter
1st Quarter 300 12 2 310
2nd Quarter 310 9 0 319
3rd Quarter 319 2 1 320
4th Quarter 320 1 0 321
Actual Fiscal 2009
Reduction of
gross square
Gross square feet for
Total gross feet for stores stores closed Total gross
square feet opened or or downsized square feet
at beginning expanded during during the at end of
Quarter of the quarter the quarter quarter the quarter
1st Quarter 1,864,133 52,185 (8,258) 1,908,060
2nd Quarter 1,908,060 38,166 0 1,946,226
3rd Quarter 1,946,226 10,274 (2,872) 1,953,628
4th Quarter 1,953,628 4,512 0 1,958,140
Projected Fiscal 2010
(Note 2)
Total stores Number of Number of Total stores
open at stores stores closed open at end
beginning opened during during of the
Quarter of the quarter the quarter the quarter quarter
1st Quarter 321 5 0 326
2nd Quarter 326 2 1 327
3rd Quarter 327 4 0 331
4th Quarter 331 4 0 335
Projected Fiscal 2010
Reduction of
gross square
Gross square feet for
Total gross feet for stores stores closed Total gross
square feet opened or or downsized square feet
at beginning expanded during during the at end of
Quarter of the quarter the quarter quarter the quarter
1st Quarter 1,958,140 25,168 (615) 1,982,693
2nd Quarter 1,982,693 7,631 (7,822) 1,982,502
3rd Quarter 1,982,502 13,249 0 1,995,751
4th Quarter 1,995,751 24,605 0 2,020,356
Note 1 - Store count and square footage summary excludes three clearance
store locations.
Note 2 - Projected number of stores opened during Fiscal 2010 by quarter:
1st Quarter - two retail and three factory stores.
2nd Quarter - one retail and one Madewell store.
3rd Quarter - two retail and two Madewell stores.
4th Quarter - one retail, two factory and one Madewell store.
SOURCE J.Crew Group, Inc.
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