The Jones Group cuts down its year guidance

Sales promotionally driven and tightly planned business ahead

for The Jones Group in the coming months, as the company just updated its quarterly and yearly guidance. Adjusted and reported net revenues will be slightly lower than advanced, in the range of $3.786 to $3.789 billion.

"Revenue estimates for the first quarter of 2012 are based on the current economic environment and business trends experienced in the fourth quarter 2011. Retail sales continue to be promotionally driven and we have planned our business tightly," stated Wesley R. Card, The Jones Group Inc.'s Chief Executive Officer.

The Jones Group estimates adjusted and reported net revenues will be in the range of $892 million to $895 million versus previous guidance of $918 million to $961 million.  In the same line, adjusted and reported gross profit margin is estimated to approximate 35.75%.

As well, adjusted selling, general & administrative (SG&A) expenses are estimated to be between $303 million and $306 million, compared to the previous $317 million range. Therefore, reported SG&A is estimated to be in the range of $345 million to $348 million and includes approximately $35 million ($22 million after tax) for the impairment of certain trademarks primarily utilized in the group’s jeanswear business.

With regards to the full 2011 financial year, the retailer estimates adjusted and reported net revenues will be in the range of $3.786 to $3.789 billion versus previous guidance of $3.80 billion to $3.87 billion. Adjusted and reported gross profit margin is estimated to approximate 35.6%. Adjusted SG&A expenses are estimated to be in the range of $1.141 billion to $1.144 billion versus previous guidance of approximately $1.155 billion. Reported SG&A is estimated to be in the range of $1.203 billion to $1.206 billion and includes the impairment of certain trademarks as discussed above.

Additionally, the company anticipates that its year-end cash balance will exceed $220 million, with no amounts drawn under the $650 million revolving credit facility.  This is very much related to the required annual goodwill and trademark impairment analysis for 2011, which points out fourth quarter and full year 2011 reported results to include a pre-tax, non-cash charge of approximately $35 million ($22 million after-tax) for the impairment of certain trademarks primarily utilized in our wholesale jeanswear business.

Finally, The Jones Group is confident its net revenue for 2012 will be in the range of $3.8 billion to $4.0 billion. Additionally, the company estimates that net revenue in the first quarter of 2012 will be in the range of $930 million to $955 million.

"While we continue to operate in challenging economic conditions, we are making substantial progress in reinvigorating our traditional core brands and growing our newer and, primarily upscale, contemporary brands. As we do this, we are focused on streamlining and finding efficiencies while continuing to invest in the right places for growth. With the addition of new talent, implementation of strong brand management and our strong financial position, we are well positioned for growth as economic conditions improve. In the meantime, we are planning very cautiously and tightly controlling inventory purchases and expenses until we see signs of healthy retail sales growth and a less promotional environment, " Mr Card further stated in a statement released on Tuesday.