In its preliminary results for the fourth quarter and fiscal year, New York-based apparel cataloger/retailer J. Crew Group announced a 47% surge in direct sales for the quarter ended Jan. 29. The company’s consolidated revenue for the fourth quarter increased 26% from the same period last year, to $264 million. Retail sales (including factory stores) for the quarter increased to $183 million from $154 million last year, with comparable store sales up 17%. The direct business (catalog and Internet) reported revenue of $72 million, up from $49 million last year.
Gross margin for the fourth quarter of 2004 was 39%, comparable to last year. J. Crew’s selling, general and administrative expenses during the quarter were $82 million, or 31% of revenue, compared to $80 million, or 38% of revenue in the prior year. Operating income increased to $20 million, up $19 million over the corresponding period in fiscal 2003. J. Crew–which is not publicly traded–reported a net loss for the fourth quarter of $52 million, compared to a loss of $20 million last year. But this year’s results included a $50 million loss from debt refinancing. Adjusted for the loss on debt refinancing, the fourth quarter net loss would have been $2 million, an $18 million decrease in the loss over the fourth quarter last year.
For the fiscal year ended Jan. 29, consolidated revenue increased 17% to $804 million, up from $690 million last year. Retail sales increased to $580 million from $487 million, primarily as a result of a comparable store sales increase of 16%. The direct unit’s revenue was up 14% to $198 million in fiscal 2004. Gross margin for the fiscal year increased to 40% from 36% last year due to improvements resulting from higher full price sell-through. Selling, general and administrative expenses during the year were $287 million, or 36% of revenue, compared to $281 million, or 41% of revenue in the prior year.
Operating income for the year increased by $69 million to $38 million, compared to an operating loss of $31 million last year. Net loss for 2004 was $100 million compared to a loss of $50 million last year. But fiscal 2004 included a loss from the $50 million debt refinancing, while 2003 included a gain on exchange of debt of $41 million. Adjusted for these financing transactions, the net loss in 2004 would have been $50 million, compared to a net loss of $91 million last year.