J.Crew swings to Q4 gain, extends Madewell IPO deadline
J.Crew Group has swung to a profit in the fourth quarter of the year and announced an extension to the deadline date of its upcoming IPO of its Madewell brand.
For the three months to 1 February, the group reported net income of 1.5 million dollars compared with a net loss of 74.4 million dollars in the prior-year period.
Total group revenues were up 2 percent to 747.2 million dollars, with comparable company sales up 3 percent. Breaking it down by brand, J.Crew Q4 sales decreased 2 percent to 516.8 million dollars, while its comparable sales increased 1 percent. Madewell Q4 sales were up a more significant 13 percent to 178.1 million dollars, while its comparable sales increased 9 percent.
For the full year, the group managed to narrow its losses significantly to 78.8 million dollars compared to losses of 120.1 million dollars last year.
Total full-year revenues increased 2 percent to 2.5 billion dollars, with comparable company sales up 2 percent. Annual J.Crew sales fell 4 percent to 1.7 billion dollars, with comparable sales down 1 percent, while annual Madewell sales were up 14 percent to 602.4 million dollars, with comparable sales up 10 percent.
Madewell continues to shine, deadline for IPO extended
The group also announced an extension to the deadline of its Madewell IPO which was previously planned to go ahead on or before 2 March, 2020. The outside date to complete the transactions is now 30 April, 2020.
Michael J. Nicholson, president and chief operating officer of J.Crew Group, said in a statement: “Our fourth quarter and full-year results reflect exciting progress at J.Crew, driven by strong gross margin performance and the accelerated benefits from our multi-year cost optimization program, as well as continued growth at Madewell. I am proud of the team's accomplishments this year. As a result of this strong performance, we now have an opportunity to broaden our exploration of strategic alternatives in support of our objectives to maximize value, position the company for long-term growth and deleverage our balance sheet.”
CEO Jan Singer said: “I echo Mike's sentiment on congratulating the team for executing our strategy with discipline in 2019, which led to a significant increase in profitability, and, importantly, a more efficient and stronger operating platform from which to grow. Since joining J.Crew, I have been constantly impressed by the caliber of this talented team and the passion they all possess for this iconic brand. I am enthusiastic about the opportunities that lie ahead for this business, as I bring my perspective for developing product, brand experiences, and teams towards evolving our brand strategy and driving long-term profitable growth with the consumer at the center.”
Photo credit: J.Crew, Facebook