S&P Rating's Services cut JCG’s corporate credit rating to B from BB- due to the company’s highly leveraged capital structure after the buyout by TPG Capital and Leonard Green.
Revenues increased 4% to $429.3 million. Store sales increased 1% to $303.3 million and comparable store sales decreased 1%. Gross margin decreased to 43.5% of revenues compared to 48.4% of revenues in the same quarter from 2009. Operating income decreased to $64.1 million, compared to $75.2 million of the same quarter last year.
Revenues increased 20% to $413.9 million and store sales increased 20% to $290.0 million. Net income was $44.7 million, or $0.68 per diluted share. Net income was $20.4 million, or $0.32 per diluted share, in the first quarter of fiscal 2009.
The company now expects earnings in the range of 54 cents to 59 cents a share, up from a prior forecast between 30 cents and 33 cents.J. Crew also announced that it is seeing some positive signs for the fourth quarter, which includes the all-important holiday season. Management foresees a same-store sales increase in the mid-to-high single digits.
In its most recent financial quarter, J. Crew reported a $16.8 million increase in sales and a $0.5 million increase in net income. Store sales also increased by 6.0%.
J. Crew released its 1st quarter report. Sales rose by 2% and there was lower than expected promotional activity (disconts). In addition, though same-store sales decreased by 5% and online sales by 6%, those were more than offset by the sales from 43 new stores opened in 2008.
J. Crew's stock price has fallen more than 75% this fiscal year. In an increasingly harsh economy, consumers are cutting back on clothes shopping. J. Crew has had to rely on sales and promotions to keep people in its stores; however those same sales have an adverse effect on the company's profit margins.
Shares of JCrew were upgraded by a CIBC World Markets analyst claiming that JCrew delivers clothing in line with current trends that draws customers to its stores.
J. Crew announced its Q2 results, which were below expectations. The profit was 21 cents per share and the revenue increased from $269.2 million last year to $304.7 million this year. However, the analysts were expecting Q2 earnings of 29 cents per share and revenue of $308.5 million.