The Jones Group Inc., the parent of Nine West, reported revenues for the third quarter of 2010 were $1.0 billion, a 19.4% increase. The company reported adjusted earnings per share of 54 cents a share for the third quarter of 2010, as compared with adjusted earnings per share of 46 cents in the same period last year.

Results for both periods exclude the impact of the charges considered by management not to be part of ongoing operations.

As reported under generally accepted accounting principles (“GAAP”), the company reported net income of $0.34 per share for the third quarter of 2010, as compared with net income of $0.36 per share for the same period last year. The 2010 third quarter results include costs and charges of approximately $11 million ($7 million after tax) related to the acquisitions of Stuart Weitzman and Robert Rodriguez, an intangible asset impairment of approximately $3 million ($2 million after tax) in the Stuart Weitzman business and $15 million ($10 million after tax) of other restructuring, strategic review costs and certain other charges. In the prior year third quarter, results included charges of approximately $14 million ($9 million after tax) related to the planned closure of certain Company-owned retail stores, other cost savings initiatives and certain other charges.

Wesley R. Card, The Jones Group Chief Executive Officer, stated: “I am very pleased to report that we achieved 19 percent sales growth against a strong comparable 2009 quarter. It is a testament to the power of our brand portfolio that sales increased across all of our wholesale divisions. As we advised at the beginning of the period, raw materials costs, freight costs and tight factory capacity were evident this quarter and challenged gross margins. We were well-prepared for these conditions and I'm pleased with our performance in the face of these challenges.”

Cash used by operations during the first nine months of 2010 was $71 million, compared with cash provided by operations of $149 million in the prior year period. The current year results reflect higher earnings offset by an investment in working capital required to fund revenue growth and higher tax payments. The Company had $34 million in cash and $16 million 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 have made an investment in working capital, as our business is growing, and we expect that the fourth quarter will generate a significant amount of cash. Even with this working capital investment, we ended the quarter with $34 million of cash and only $16 million outstanding under our revolving credit facility. Throughout the remainder of 2010, we will maintain our prudent management of inventories and expenses to conserve cash and improve margins.”

The company noted that it closed 46 retail locations in the third quarter to end the quarter with 834 locations (which includes acquired Stuart Weitzman locations). Consistent with its plan, the Company anticipates closing an additional 40 unprofitable locations by the end of 2010.

The following notable events have recently occurred:

  • announced that the Company changed its name to The Jones Group Inc in conjunction with its fortieth anniversary, better reflecting Jones' vision for growth;
  • entered into an exclusive licensing and distribution agreement with Brian Atwood for B Brian Atwood, a new footwear and accessory line that will be the contemporary counterpart to Brian Atwood's high-end, luxury shoe business;
  • enhanced Jones' talent and management structure with the appointments in the Handbags division of Dina Battipaglia as Group President and Rafe Totengco as Creative Director; appointments of Chief Merchandising Officers Rodney Hutton (for Anne Klein Brands) and Daniela Bocresion (for Rachel Roy Brands); and the promotions in the Footwear and Retail divisions of Rick Paterno, Group President of Footwear and Ron Offir, President Jones Direct Group, respectively;
  • launched the Jones New York “Empowering Your Confidence” campaign, which celebrates the brand's 40 years of empowering women's lives and successes through style;
  • opened the Jones New York innovative in-store experience at Macy's Herald Square in New York City; and
  • awarded over $60,000 in grants to nine women as part of the JNY Empowerment Fund, which was created to help women reach their personal, professional and community goals.

Card concluded: “Looking ahead, we are focused on optimizing and expanding our portfolio of brands to deliver value to shareholders. Our core is strong, operations are efficient and we continue to add new talent and new brands, all of which are key to taking the Company to the next level. As part of our planning, we are mindful of current macroeconomic conditions, which are likely to persist in the near-term and impact future quarters.”

The Company's Board of Directors has declared a regular quarterly cash dividend of $0.05 per share to all common stockholders of record as of November 12, 2010 for payment on November 26, 2010.