J. Crew more than doubles profit in 3Q

AP News
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Posted: Nov 24, 2009 5:55 PM

J. Crew Group Inc., seller of clothes, shoes and accessories, said Tuesday its profit more than doubled in the third quarter as sales rose by a double-digit percentage.

The results sent its stock surging in after-hours trading after the retailer beat Wall Street consensus estimates for profit and revenue.

J. Crew Group Inc., a favorite of first lady Michelle Obama, boosted its expectations last month for sales and margins _ a coup for any retailer amid the consumer spending clampdown. It said Tuesday that its gross margin grew to 48.4 percent of revenue from 41.6 percent a year ago.

CEO Millard Drexler said the company's success was tied to doing simple things well.

"It's about product, it's about quality, it's about design, it's about creativity," he said in a statement.

The retailer and catalog seller earned $43.9 million, or 67 cents per share, in the quarter that ended Oct. 31. That compares with $19 million, or 30 cents per share, a year earlier. Analysts polled by Thomson Reuters had expected profit of 58 cents per share.

Revenue rose 14 percent to $414.1 million from $363.1 million. Analysts had expected $408 million.

Sales at stores open at least a year rose 8 percent at a time when many competitors are coping with declines. The figure is a key indicator of a retailer's performance because it shows change at existing stores and excludes the activity at stores that opened or closed during the year.

In the fourth quarter, J. Crew expects to earn 37 cents to 42 cents per share, while analysts forecast 41 cents per share.

The earnings report was issued after the close of regular trading on Wall Street Tuesday.

J. Crew's shares rose $2.80, or 6.9 percent, to $43.65 after hours. They closed the regular session up 45 cents at $40.85.