J.Crew narrows quarterly losses, Madewell shines
The American group reported a total revenue decrease of 2 percent to $2.37 billion for the full-year ended February 3, 2018. Comparable company sales also continued to fall 6 percent, narrowing slightly after a decrease of 7 percent last year.
Sales fell 8 percent to $1.85 billion at the New York-based company’s flagship brand, overshadowing strong growth for its Madewell brand, which saw a sales increase of 23 percent to $421.1 million. Likewise, Madewell comparable sales increased 13 percent.
Despite the yearly downturn, J.Crew ended the year stronger. In its fourth quarter, net income rose to $36.6 million from $1.1 million in the year-ago period, with a $64.8 million tax benefit impacting the bottom line.
The latest quarter, ended Feb. 3, was also impacted by $18.7 million in transformation costs, $4.3 million in non-cash impairment charges, $1.3 million of transaction costs and $1.3 million in severance costs. Net income a year ago reflected the impact of non-cash impairment charges.
Adjusted earnings before interest, taxes, depreciation and amortization increased $13.1 million, or 25 percent, to $64.6 million from $51.5 million in the year-ago fourth quarter. Operating income was $6.1 million compared to $15 million in the fourth quarter last year.
The final quarter saw total revenues increase 2 percent to $710.6 million, while comparable company sales fell just 3 percent.
During the quarter, J.Crew sales decreased 4 percent to $547.1 million. J.Crew comparable sales decreased 7 percent, following a decrease of 7 percent in the fourth quarter last year.
Madewell sales increased 32 percent to $135.8 million and the brand's comparable sales increased 17 percent.
The firm's CEO Jim Brett remained optimistic about alleviating J.Crew from its troubles, which it has been combating for the last two years.
“While we are only at the very beginning of our evolution of the J.Crew brand, meaningful change is happening and we are already seeing results in our most important business – women's apparel – signaling that our strategy is working. With the right strategy and leadership in place, we are uniquely prepared to respond to the growing customer preference for a more personalized experience.”
Brett added that the group will continue to “scale Madewell more rapidly, building upon its proven and consistent record of growth."
Earlier this year, Madewell opened shops-in-shops at six J.Crew locations.
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