J. Crew continues to see revenue fall in Q1
J. Crew Group still has a lot of work ahead to combat declining sales and operating costs from the looks of its first quarter results, reported on Monday.
The American retailer reported a 6 percent decrease in total revenue for the three-month period ended April 29, dropping to $532 million. Comparable company sales decreased 9 percent, compared to a decline of 7 percent reported during the same period last year.
Meanwhile, comparable sales for its Madewell brand increased 10 percent, following an increase of 6 percent reported in the first quarter last year. Total sales for Madewell rose by 17% over the same period last year, earning $84.7 million for the company. J. Crew total sales are still a much bigger piece of the pie, $428.5 million for this quarter, but that represents a drop of 12% over last year.
Operating loss was $153.3 million compared with operating income of $7.3 million reported last year.
In order to fix its balance sheet, the company announced on Monday the launch of an exchange offer for its $566.5 million in PIK notes, due in 2019, and to extend the maturity date to 2021.
The offer, if accepted, would help incoming chief executive officer James Brett transform the company’s turnaround.
"While we are disappointed with our first quarter earnings, we are optimistic regarding the work we have underway to improve our business. We have a clear vision and action plan in place to meet our customers' needs - wherever and however they choose to shop,” said Millard Drexler, current Chairman and Chief Executive Officer, in a news statement.
Drexler announced earlier this month that he would step down from the helm of J. Crew after 14 years. James Brett will take over Drexler’s position as CEO as of July 10.
Last month, J.Crew also announced plans to reduce its prices. The company said it would reduce the prices of many of its basics including some 300 pieces, while still maintaining some of its higher-end items.
The company previously provided guidance that Adjusted EBITDA for fiscal 2017 was expected to be in the range of $190 million to $210 million. The New-York based retailer said that investors should not expect the company to provide interim quarterly updates of guidance or outlook in conjunction with quarterly earnings reports and conference calls in the future.
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