The Jones Group Inc., the parent of Nine West, reported revenues for the second quarter of 2011 were $888 million, as compared with $860 million for the second quarter of 2010.
The company reported adjusted earnings per share of 33 cents a share for the second quarter of 2011, as compared with adjusted earnings per share of 45 cents in the same period last year. Results for both periods exclude the impact of acquisition-related charges, the impact of severance, restructuring activities and certain other charges.
As reported under generally accepted accounting principles (“GAAP”), the company reported earnings per share of 6 cents a share for the second quarter of 2011, as compared with earnings per share of 30 cents for the same period last year. The 2011 second quarter results include costs and charges of approximately $23 million ($15 million after tax) related to the acquisition of the Stuart Weitzman business and $12 million ($8 million after tax) related to the lease of an unused facility, among other items. In the prior year quarter, results included charges of approximately $12 million ($8 million after tax) related to the acquisitions of the Stuart Weitzman and Robert Rodriguez businesses and $10 million ($6 million after tax) of other restructuring and strategic review costs.
Wesley R. Card, The Jones Group chief executive officer, stated: “We are pleased with our results for the second quarter. Our operating trends in the core businesses continue to improve as a result of our focus on brand management, inventory planning and controlling costs and expenses. Since we completed the acquisition of Stuart Weitzman a year ago, the brand has performed exceptionally well and experienced strong growth, both domestically and internationally. We also continue to optimize our portfolios existing and new brands, and with the acquisition of Kurt Geiger, we are further expanding our reach into the luxury sector and internationally.”
The following notable events have recently occurred:
- acquired Kurt Geiger, Europe’s largest luxury footwear retailer based in the United Kingdom;
- entered into an exclusive international license agreement with Philip Simon Brands Group, Inc. for the creation, production, marketing and global distribution of a fashion sneaker collection under the Nine West brand;
- enhanced its Board of Directors with the addition of three experienced, independent Directors; and
- amended and extended its $650 million senior secured credit facility.
Cash provided by operations during the six months was $66 million, compared with cash provided by operations of $26 million in the prior year. The current year results reflect lower working capital requirements and lower income tax payments, partially offset by lower earnings. The Company continues to have no amounts drawn under its $650 million of committed revolving credit facilities.
John T. McClain, The Jones Group chief financial officer, commented: “We had another solid quarter and our financial position remains strong. We ended the quarter with $146 million of cash after funding the acquisition of Kurt Geiger and our revolver was undrawn. We entered 2011 with a more conservative, tightened inventory buy plan and we will continue operating in the same manner for the remainder of the year. We will continue to focus on inventory management and expense control to improve margins and maintain a strong balance sheet.”
Card concluded: “While consumer confidence and sentiment continues to be impacted by mixed economic signals, we are cautiously optimistic about the retail environment for the second half. We continue to be disciplined in our spending and are prudently positioning our businesses for long-term growth.”
The acquisition of Kurt Geiger has impacted the way the company manages and analyzes its operating results. Effective with the reporting of the second quarter 2011 results, the company modified and expanded its reporting segments to reflect the company’s expanding international operations and to enhance the clarity and transparency of operating results. The modified segments are Domestic Wholesale Sportswear, Domestic Wholesale Jeanswear, Domestic Wholesale Footwear and Accessories, International Wholesale, Domestic Retail and International Retail. The principal changes associated with the updated segment presentation were to segregate the international businesses from the domestic businesses and to adjust the manner in which intercompany transactions are reflected. The changes in reporting segments impact the segment results only and do not impact the consolidated financial results of The Jones Group.