Direct Sales Are Down at J. Crew
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.