The Jones Group Inc reported results for the third quarter ended October 1, 2011. Revenues for the third quarter of 2011 were $1,044 million, as compared with $1,022 million for the third quarter of 2010.
The Company reported adjusted earnings per share of $0.48 for the third quarter of 2011, as compared with adjusted earnings per share of $0.54 in the same period last year. The results for the current year quarter include charges related to balances denominated in foreign currencies of approximately $6 million ($4 million after tax), or $0.04 per share, whereas in the prior year period such amounts were not material.
The results for the current year quarter also include the favorable impact of a tax law change in the United Kingdom of approximately $4 million after tax, or $0.05 per share. Results for both periods exclude the impact of acquisition-related charges, severance, planned Company-operated retail store closure costs, restructuring activities and certain other charges.
As reported under generally accepted accounting principles (GAAP), the Company reported earnings per share of $0.49 for the third quarter of 2011, as compared with earnings per share of $0.34 for the same period last year. The 2011 third quarter results include a reduction of the acquisition consideration liabilities associated with the Stuart Weitzman and Robert Rodriguez businesses of $15 million ($10 million after tax), partially offset by other net costs and charges of approximately $12 million ($8 million after tax), consisting of acquisition and business development costs, restructuring and other costs.
Results in the prior year third quarter include costs and charges of approximately $11 million ($7 million after tax) related to the acquisitions of the Stuart Weitzman and Robert Rodriguez businesses, 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.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: "Our performance for the third quarter is a reflection of our focus on controlling costs and inventory. Despite a promotional retail environment, we achieved results that were in line with our expectations."
The following notable events have recently occurred:
repurchased approximately 5.03 million shares of common stock for $50 million;
launched BBrian Atwood in major department stores, such as Saks Fifth Avenue and Neiman Marcus, and boutiques nationwide; and
entered into an exclusive, worldwide license agreement with Marchon Eyewear, Inc. for the creation, production, marketing and global distribution of ophthalmic eyewear frames and prescription-ready sunglasses under the Nine West brand.
Cash provided by operations during the first nine months of 2011 was $6 million, compared with cash used in operations of $71 million in the comparable period last year. The current year results reflect lower working capital utilization partially offset by lower earnings. At October 1, 2011, the Company had $55 million outstanding under its $650 million of committed revolving credit facilities, which it subsequently repaid.
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 $61 million of cash and $55 million outstanding under our revolver, which we have repaid. We entered 2011 with a more conservative, tightened inventory buy plan, and we will continue to approach inventory commitments in the same manner as we look to 2012. With a focus on inventory management and expense control, we believe we will continue to improve margins and to maintain a strong balance sheet."
Mr. Card concluded: "Although we are operating in an uncertain retail landscape, we are confident that we are taking the right steps to position Jones for continued operating improvement. We have successfully aligned our plans with the current consumer environment and will continue to be prudent in our spending, while actively pursuing the Company's strategy."
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 11, 2011 for payment on November 25, 2011.
The Jones Group Inc is a leading global designer, marketer and wholesaler of over 35 brands with best-in-class product expertise across five divisions: apparel, footwear, jeanswear, jewelry and handbags.
