J Crew profit beats, shares rise
J Crew Group Inc
The shares of the upscale apparel retailer rose 6.5 percent in after-hours trading.
The fashion looks good and because inventories are lean, they're getting good full price selling -- some items are actually selling out, said Needham & Co analyst Christine Chen. After promoting like crazy last year, they're retraining the customer to pay full price, which in this environment is pretty hard to do.
J Crew said third-quarter net income more than doubled to $43.9 million, or 67 cents per share, from $19 million, or 30 cents per share, a year earlier.
Analysts, on average, had been expecting earnings of 58 cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 14 percent to $414.1 million while same-store sales -- a key gauge of retail performance that measures sales at stores open at least a year -- jumped 8 percent.
Sales at the company have been robust during the fall season as shoppers with some disposable income update their wardrobes.
The company struggled earlier this year with too-high inventory levels that pressured margins. It attributed its sales strength to what it calls unique, differentiated merchandise.
Operating profit margins rose to 18.2 percent of revenues from 9 percent of revenues a year earlier. Gross profit margins rose to 48.4 percent of revenues from 41.6 percent.
Looking ahead, J Crew said it expects fourth-quarter earnings per share to range between 37 cents to 42 cents. Wall Street had been expecting earnings of 41 cents per share.
Shares rose 6.5 percent to $43.53 after hours after closing at $40.85 on the New York Stock Exchange.
(Reporting by Alexandria Sage; editing by Carol Bishopric and Andre Grenon)
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