- Prachi Singh |
J.Crew Group revenues for the three months ended April 29, 2017 decreased 6 percent to 532 million dollars. Comparable sales decreased 9 percent following a decrease of 7 percent in the first quarter last year. Net loss was 123.3 million dollars compared to 8 million dollars in the first quarter last year.
Commenting on the first quarter trading, Millard Drexler, the company’s Chairman and CEO, commented, "While we are disappointed with our first quarter earnings, we are optimistic regarding the work we have underway to improve our business. I look forward to transitioning my role to chairman and to working with our new CEO, Jim Brett, as he takes the reins in July and continues to position J.Crew for long term success."
J.Crew brand sales declined 11 percent
J.Crew sales decreased 11 percent to 428.5 million dollars, while comparable sales decreased 12 percent following a decrease of 8 percent in the first quarter last year. Madewell sales increased 17 percent to 84.7 million dollars and comparable sales increased 10 percent following an increase of 6 percent in the first quarter last year.
Gross margin was 35.4 percent compared to 36.1 percent in the first quarter last year. Operating loss for the quarter was 153.3 million dollars compared with operating income of 7.3 million dollars in the first quarter last year. The operating loss, J.Crew said, includes pre-tax, non-cash impairment charges of 131.2 million dollars and a charge of 10.7 million dollars for severance and related costs associated with the company's workforce reduction in April 2017. Adjusted EBITDA was 26.6 million dollars compared to 45.4 million dollars in the first quarter last year.
J.Crew expects to achieve FY17 EBITDA target
In light of the announcement today regarding the company's efforts to enhance its capital structure, J.Crew provided an update to its fiscal 2017 adjusted EBITDA guidance.
The company previously provided guidance that adjusted EBITDA for fiscal 2017 was expected to be in the range of 190 million to 210 million dollars, which includes an anticipated 50 million dollars benefit driven primarily by lower product costs and other efficiencies in connection with its strategic sourcing and supply chain initiative. The company continues to believe, despite its first quarter performance, that its prior guidance range is achievable.