Direct Sales Are Down at J. Crew
J. Crew Group Inc., New York, announced Friday that revenue in the second quarter was $167.1 million, virtually unchanged from last year's Q2 revenue of $167.6 million.Its results reflect "strategic changes in the direct business, including the discontinuance of Clearance and Sale catalogs and reductions in pages circulated," the company said.
Comparable-store sales increased 2 percent in the quarter as net sales in the direct business fell 17 percent. Net income totaled $15.2 million for the quarter compared with a loss of $7.1 million last year.
Revenue for the 26 weeks ended Aug. 2 was $328.6 million, a decrease of 2 percent from last year. Comparable-store sales declined 4 percent in the period while direct sales decreased 9 percent. The net loss for the six-month period was $4.4 million compared with a $19.2 million loss last year.
The operating results for the six-month period reflect a $23 million decrease in gross profit with a decline in gross margin from 38.2 percent in 2002 to 32 percent in 2003.
This decrease was partially offset by a decline in selling, general and administrative expenses (excluding severance charges) of $7 million. Selling expense decreased by $4 million due to reduced circulation.
