NEW YORK (May 1, 2008)—Jones Apparel Group, Inc. (JNY) experienced a dip in revenues during the first quarter ended April 5. The company attributes this drop to the approximate $100 million decrease related to a halt placed on producing several moderate sportswear lines completed at the end of last year. Revenues for the first quarter of 2008 equaled $975 million, compared to the previous quarter’s $1 billion.

Hammer by Nine West

“While first quarter results were in line with our expectations, we believe there is enhanced value to be realized in our businesses as we continue to pursue our operational improvements, enhance the overall appeal of our brands and pursue varied distribution channels,” Wesley R. Card, president and CEO, says in a release. “Results for the quarter reflect a continued challenging economic and retail environment, as well as a tough comparable quarter, with comparable store sales in our own stores down 8.7 percent for the quarter compared to 2007. During the quarter, we maintained tighter inventory controls; however, markdown support to our retail partners was higher than during the first quarter of 2007 and our retail operations continued to trend negatively consistent with the overall retail climate.”

Net sales were down to $963.4 million, versus $1 billion during the year-ago time period. Income dropped from $47.8 million to $19.5 million, and gross profit declined $44 million from $365.1 million to $320.7 million.

“Our financial position remains strong,” says CFO John T. McClain. “We ended the quarter with $200 million of cash and $782 million of total debt, which is $303 million less debt than the prior year period. This translates into a debt to total capitalization ratio, net of cash, of 22.5 percent. We will continue to control our inventory levels and carefully review our spending throughout 2008. We have tempered our guidance for 2008, to match our retail customers’ conservative plans for the back half of the year.”

A regular quarterly cash dividend of $0.14 per share will be paid on May 30 to common stockholders on record as of May 16, as determined by the company’s board of directors.
“We have taken, and continue to take, the necessary steps toward operational excellence, including streamlining our supply chain, distribution and technology infrastructure,” Card concludes. “The challenges of the overall environment, however, require us to remain cautious in our outlook for 2008.”

  More Industry News Articles