The Jones Group Inc., the parent of Nine West, reported revenues for the first quarter of 2011 exceeded expectations and were $961 million, as compared with $887 million for the first quarter of 2010, an increase of 8.3 percent.
The company reported adjusted earnings per share of 38 cents a share for the first quarter of 2011, as compared with adjusted earnings per share of 47 cents a share in the same period last year. The adjusted results exclude charges related to the impact of severance, asset impairments in retail locations to be closed and other costs related to restructuring activities, certain acquisition-related costs and other costs not considered relevant for period-over-period comparisons (see reconciliation of adjusted earnings to reported earnings in the accompanying schedule).
As reported under generally accepted accounting principles (“GAAP”), the company reported net income of 30 cents a share for the first quarter of 2011, as compared with net income of 45 cents a share for the same period last year. The 2011 first quarter results include, among other items, costs and charges of approximately $11 million ($7 million after tax) related to the acquisition of the Stuart Weitzman business and other restructuring and strategic review costs. In the prior year quarter, results include costs and charges of approximately $3 million ($2 million after tax) related to the acquisition of the Robert Rodriguez business and other restructuring and strategic review costs.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: “We are pleased that our revenues for the first quarter exceeded our expectations and registered an 8 percent increase over last year. The acquisition of Stuart Weitzman and growth across all segments contributed to this increase. While our gross margin declined, it was in line with expectations and better than the trend we experienced in the second half of 2010, as we effectively managed cost pressures and tightened our inventory plans for 2011.”
Cash used by operations during the quarter was $137 million, compared with cash used by operations of $86 million in the prior year. The year-over-year change in cash used by operations of $51 million is primarily due to an increase in working capital. As previously announced, the Company issued $300 million of senior notes during the quarter. At quarter end, the Company has no amounts drawn under its $650 million of committed revolving credit facilities.
John T. McClain, The Jones Group Chief Financial Officer, commented: “Our financial position remains strong. We ended the quarter with approximately $307 million of cash and our revolver undrawn. We entered 2011 with a more conservative, tightened inventory buy plan. We will continue operating in the same manner throughout the remainder of 2011, focusing on our management of inventories and expenses to improve margins and maintain a strong balance sheet.”
Card concluded: “We are cautiously optimistic that consumer spending will remain relatively strong. In the current environment of slow improvement in the overall economy, the consumer has been resilient and continues to buy into new and fresh designs. Given the mixed signals in the economic picture, we will continue to plan tightly and exercise discipline in all areas of our operations as we continue to strengthen and nurture our brand portfolio.”
The company's nationally recognized brands and licensing agreements (L) include: Nine West, Jones New York, Anne Klein, Rachel Roy (L), Robert Rodriguez, Robbi & Nikki, Stuart Weitzman, B Brian Atwood (L), Boutique 9, Easy Spirit, Gloria Vanderbilt, l.e.i, Bandolino, Enzo Angiolini, Nine & Co., GLO, Joan & David, Joneswear, Andrew Marc/Marc Moto (L), Kasper, Energie, Evan Picone, Le Suit, Mootsies Tootsies, Grane, Erika, Napier, Jessica Simpson (L), Dockers (L), Sam & Libby, Givenchy (L), Judith Jack, Albert Nipon and Pappagallo.