Nov 23, 2016
Reading time
2 minutes
Download the article
Click here to print
Text size
aA+ aA-

J. Crew sales decline, Madewell growth continues

Nov 23, 2016

J. Crew released on Tuesday its third quarter and nine month financial results. Madewell continues to improve in sales, while the J. Crew namesake brand continues to decrease in sales and revenue.

Madewell - Madewell

Third quarter J. Crew sales fell 7% to $488.0 million, and comparable sales fell 9% compared to a decrease of 12% in the previous third quarter.

Madewell sales increased 12% to $88.0 million and comparable sales increased 4%. Total revenue for the quarter decreased 4% to $593.2 million, and comparable company sales decreased 8% compared to a decrease of 11% in the prior year.

The company reduced its net loss, which was $7.9 million compared to $759.7 million in 2015, and operating income was $20.0 million compared to $808.5 million.
Gross margin was 38.1%, SG&A expenses were $204.5 million, or 34.5% of revenues, and adjusted EBITDA decreased to $53.3 million from $73.6 million.
Millard Drexler, Chairman and Chief Executive Officer, commented, "Our third quarter results reflect ongoing traffic challenges and a highly promotional retail environment. While we expect these trends to persist through the fourth quarter, we continue to remain focused on driving sales productivity and carefully managing inventory and expenses. In addition, we have several key operational initiatives underway that we believe position us to regain momentum and deliver long term growth." 
Nine month total revenues fell 4% to $1,730.5 million and comparable company sales decreased 7% following a decrease of 10% in the prior year’s comparable period. J. Crew sales decreased 6% to $1,445.5 million and Madewell sales increased 15% to $238.7 million. Net loss for the period was $24.6 million compared to $1,235.6 million, and adjusted EBITDA was $137.0 million.
Total debt was $1,513 million and cash and cash equivalents were $38.4 million.
J. Crew gave more attention to its namesake brand in the third quarter, launching partnerships with Net-a-Porter and New Balance. Earlier this year, J. Crew joined Madewell at select Nordstrom stores.
This month, the company reportedly began separating from its Madewell brand in order to reduce its debt. Sources said that a decision to separate the brand has not been made yet. 

Copyright © 2022 FashionNetwork.com All rights reserved.