Jul 29, 2009
Cost cuts help Jones Apparel profit beat estimates
Jul 29, 2009
BANGALORE, July 29 (Reuters) - Jones Apparel Group Inc (JNY.N) reported a higher-than-expected second-quarter profit on Wednesday 29 July, bolstered by cost cuts and the strong performance of its wholesale jeans business.
Grane, from Jones Apparel Group Inc - www.jonesapparel.com
The owner of the Jones New York, Nine West and Anne Klein brands has cut jobs, closed stores and managed inventory tightly in a bid to reduce costs in the recession.
Net income available to common shareholders rose to $12.6 million, or 15 cents a share, from $10.5 million, or 12 cents a share, a year earlier.
Excluding items, the company earned 29 cents a share. This compares with analysts' expectations of 7 cents, according to Reuters Estimates.
Revenue fell about 3 percent to $804 million.
Jones said it planned to close about 240 retail stores this year and next, and it expects the move to improve profit by about $4 million this year, $15 million next year and $21 million in 2011.
While sales at the company's wholesale jeanswear division rose 28.5 percent, revenue fell at the other segments. Jones' retail business includes chains such as Easy Spirit and Enzo Angiolini.
The company's wholesale jeans business has gotten a boost from an exclusive deal to sell its l.e.i. line at Wal-Mart Stores Inc (WMT.N).
At the same time, Jones is testing a new retail chain called ShoeWoo, which would sell many shoe brands and be larger than most of its current stores.
The company, which in April had forecast 2009 revenue at $3.3 billion to $3.5 billion, said it remained cautious in its outlook for the rest of 2009.
(Reporting by Dhanya Skariachan in Bangalore; Editing by Lisa Von Ahn)
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